On February 8th, 2018 the U.S. Federal Trade Commission (FTC) obtained a victory in court that sent shockwaves through the coaching industry.
At the request of the FTC a Federal Court issued an injunction temporarily putting a stop to a tiered coaching scheme that took over $14 million from people looking to start their own online businesses (see here for the FTC press release). As the case proceeds the FTC will surely be asking for the full weight of the law to come down on the defendants.
The response in the online coaching community has been two-fold.
While many praise the ruling, believing it portends a massive crackdown on the so-called “frauds” that are rampant in the coaching industry, others fear this could signal increased regulation on the coaching industry more broadly.
In such an environment it’s as important as ever for coaches to protect themselves legally.
This starts with your advertising, which is often your first interaction with the public and your potential customers. It is imminently important that your advertising materials and messaging is truthful and not mis-leading.
Specifically there are three requirements that all of your advertisements must meet based on FTC regulations:
- Advertising must be truthful and non-deceptive;
- Advertisers must have evidence to back up their claims; and
- Advertisements cannot be unfair.
According to the FTC, an ad is deceptive if it contains a statement, or omits information, that is likely to mislead consumers acting reasonably under the circumstances, and is “material”, that is, important to a consumer’s decision to buy or use the product.
According to the FTC, an ad or business practice is unfair if it causes or is likely to cause substantial consumer injury which a consumer could not reasonably avoid, and if it is not outweighed by the benefit to consumers.
The FTC will look at your ads from the point of view of the “reasonable consumer”, the typical person looking at the ad, and the FTC will not only look at what you say, but also what your ad implies.
This is why as a life coach it is very important you are careful about the promises and claims you make. The defendants in the major FTC case cited above were making get-rich-quick claims that promised results if the consumer kept purchasing increasingly expensive coaching programs. That’s a big no-no.
In addition to making sure your advertisements are compliant with FTC regulations, it is also important you have a prominent disclaimer on your website and linked to from your various lead magnets. Your disclaimer is yet another opportunity to make clear to your customers and potential customers what exactly it is that you are promising, and more importantly, not promising. Failing to have an adequate disclaimer can lead to confusion, which usually leads to trouble. And you don’t want that.
So take this moment of uncertainty as an opportunity to review your disclaimer and your advertisements and website copy to make sure you are not making any problematic claims or promises that you cannot deliver on.
And of course, if you have any questions feel free to email me at firstname.lastname@example.org or book in for a FREE consultation at https://diythelaw.youcanbook.me.