The law that governs coaching program marketing claims doesn’t change depending on how big your business is. It only cares about what you promised. Most coaches assume this is somebody else’s problem. The eight-figure launch crowd. The people posting income screenshots. Not a practice that’s just you, a laptop, and a dozen clients.
But a federal class action in California against a high-ticket coaching program has reached a proposed settlement, and the court has granted preliminary approval. The defendants deny the allegations, and the settlement carries no admission of wrongdoing. That part isn’t the story. The story is the law the case hinged on, because it reaches further into ordinary coaching businesses than most coaches realize.
What the case actually involves
The suit was filed in the Central District of California against the coaching program Clients on Demand and its founder. The proposed class covers U.S. purchasers of the program’s eight-week offering who bought on or after December 16, 2019. The claims involve allegedly misleading marketing representations and non-compliance with California’s Seller Assisted Marketing Plan Act. The court-authorized settlement site lists an objection and opt-out deadline of November 20, 2026, a final approval hearing set for December 4, 2026, and a claims deadline of January 3, 2027.
That bears repeating. Because a settlement is a decision to stop litigating. It isn’t a finding that anyone did anything wrong. But the reason to pay attention isn’t about the defendant at all. It’s the statute named in the complaint, which was written broadly enough to impact coaches who’ve never thought of themselves as selling a business opportunity.
California’s law is broader than its name suggests
California’s Seller Assisted Marketing Plan Act covers arrangements where someone pays for a plan or program to start a business and the seller makes representations about earnings potential, market or customer availability, or buying back what the purchaser produces. The state Attorney General’s office puts the coverage band at an initial payment over $500, with total initial payments under $50,000.
Read that again with a coaching offer in mind. A $4,000 program that teaches people to build a coaching or consulting practice, sold on the promise that they’ll land clients would fit that description. So does most of what gets sold as a high-ticket coaching offer to aspiring coaches.
Sellers who are covered have real obligations. They must register with the Attorney General before advertising or selling in the state, deliver a required disclosure document at least 48 hours before any contract or payment, and avoid earnings statements unless those statements come with average-earnings data. Advance payment is capped at 20 percent of total cost before delivery.
California isn’t alone. Roughly two dozen states have business-opportunity or seller-assisted-marketing-plan statutes of their own, Texas, Florida, and Illinois among them. Thresholds and filing requirements differ from state to state. The trigger is common to most of them, and it’s a payment paired with a promise about what the buyer will get.
The federal rule that might come for coaching next
The FTC’s Business Opportunity Rule is 16 CFR Part 437, and it covers a seller only when three things are true. The seller solicits someone into a new business. That person makes a required payment. And the seller represents, outright or by implication, that it will provide locations, outlets, accounts, or customers, or buy back what the purchaser produces.
That third one is why most coaching programs have stayed outside the federal rule. A sales page promising you’ll learn to get your own clients isn’t the same as a seller promising to hand you accounts. Sellers who are covered owe buyers a disclosure document at least seven days before signing or payment, and any earnings claim triggers a separate Earnings Claim Statement backed by written substantiation.
The FTC proposed closing that gap. On January 13, 2025 it issued proposals to expand the rule into a Business and Money-Making Opportunity Rule naming business coaching explicitly, alongside a separate proposed Earnings Claim Rule. The proposal floats a definition of a coaching opportunity broad enough to cover any program represented to train someone to generate or increase earnings.
Those proposals haven’t been adopted. A regulatory freeze paused pending rulemaking days after they were issued, the comment period was closed under new agency leadership, and their status remains unresolved. Nobody should be planning around them in either direction.
The FTC authority doesn’t need a new rule
The stalled proposal matters less than the coverage of it suggests, because the FTC already has what it needs. In October 2021 the agency sent notices of penalty offenses to more than 1,100 businesses, naming investment and business coaching sellers specifically. Deceptive earnings claims, “no experience needed” pitches, false urgency, and “risk-free” language can carry civil penalties of up to $43,792 per violation.
That authority is already being used. In September 2023 the FTC brought an action against Lurn, an online business coaching operation, over claims about the money buyers were likely to make. The case resolved with an order barring unsubstantiated earnings claims, and in June 2024 the agency sent more than $2.4 million to affected consumers. The agency’s Operation AI Comply sweep, launched in September 2024, went after operators selling money-making programs on inflated promises. In a separate action, the owners of one e-commerce money-making scheme accepted a permanent ban on offering business opportunities or coaching.
What counts as an earnings claim:
This is where coaches get surprised. An earnings claim isn’t only a number in a headline. It can be express or implied, and that pulls in a lot of ordinary marketing furniture:
- A screenshot of a revenue dashboard, yours or a client’s.
- A testimonial that states or strongly implies a typical result.
- Before-and-after income framing inside a case study.
- Lifestyle imagery tied to income language.
Nothing about that list depends on where the words appear, which is worth remembering on a discovery call as much as on a page. Once you’ve made a claim, the standard is substantiation. You need a reasonable basis for it at the time you make it, and written backup you could produce on request. The FTC restated that expectation as recently as June 2026.
Fine print doesn’t rescue a misleading overall impression. A disclaimer at the bottom of a page doesn’t cure a claim the page has already made clearly by implication. That’s judgment territory rather than a bright line, which is exactly what makes it uncomfortable.
The testimonial rule that changed in 2023
Revised Endorsement Guides took effect July 26, 2023. The change that matters most to coaches is straightforward. When an ad features a testimonial describing results that aren’t typical, the advertiser has to clearly and conspicuously disclose what people generally get. Dropping a “results not typical” line in small grey type isn’t automatically enough anymore.
The Guides also require endorsements to reflect the endorser’s honest experience, and they don’t let a seller convey through an endorser a claim that would be deceptive coming from the seller directly. If your testimonials are doing sales work your own copy couldn’t legally do, that’s precisely the gap the Guides were revised to close. It’s a good argument for being deliberate about how you gather and present testimonials from the beginning.
Questions worth asking about your own sales page:
None of this is legal advice, and an attorney who reads your actual offer is worth more than any article. These are the questions a careful reading of the rules raises, and you can answer them in an afternoon.
- Does your page state or imply what a buyer will earn? Screenshots and testimonials count toward this.
- Could you produce written substantiation today? Not eventually. Today, if someone asked.
- Do your testimonial results reflect what clients generally get, and does the page say so plainly?
- Does your program teach people to start or grow a business of their own, at a price above $500?
- Do you sell into California, or into other states with business-opportunity statutes of their own?
A yes to the last two doesn’t automatically mean you’re in violation of anything. It means the question deserves a real answer instead of an assumption, the same way the structural side of your business deserves one.
Why this impacts coaching now
Most coaches reading this will find their copy is fine, because most coaches sell a change in someone’s working life rather than a number on a bank statement. The exposure concentrates in one specific kind of offer, the one that sells coaching as the route to a coaching income. That corner of the market has grown quickly, and so has everything around it.
The 2025 ICF Global Coaching Study counted almost 123,000 coach practitioners worldwide, up 15 percent from 2023. A good number of those people were sold on becoming a coach by someone whose marketing made the outcome sound settled. Writing copy that’s honest about what a client will actually get is the harder craft. It’s also the one that keeps you out of this conversation entirely.
