The Coaching Scam is Alive and Well. (and costing folks $1,000’s)
This article is from Kyle co-owner of Wealthy Affiliate, this article sums up information on Scams on the Internet.
We exist in a world where the coaching industry is everywhere.
“Learn How Build a $30,000/month in 3 Steps or Less.”
Sounds captivating doesn’t it. It pulls our “get rich quick” mind into the direction of this program, but little do MOST people know that they are about to become part of the scam itself: THEM BECOMING A COACH.
Let’s have a look at what these coaching programs are, and how their typical business models function. Also, let’s have a look at why so many people fall victim to these scams, and have ever since I have been online (for the last 21 years).
First, Why Do People Get Suckered Into Coaching Schemes?
Because they sound great. They promise you lots of money, and the often time are free or a price of $7 to get started. Maybe they even try to sell you a “hard cover book”, you just pay for the shipping.
There are lots of front end strategies that these folks use to capture your initial interest. And it works.
After all, the principle of empowering others through knowledge and guidance seems like a worthy pursuit. And it can be. I won’t argue that.
Genuine coaches (people with 10+ years experience helping people in a particular niche) can make a significant and positive difference to their clients’ lives. But there’s a troubling undercurrent, and one that really starts to become apparent when you unwrap these “coaching” schemes.
The coaching industry has found itself tangled in a complicated and deceptive web of self-perpetuating schemes. And at the heart of this, coaching scams charging $1,000’s (sometimes $10,000’s) are sadly thriving.
These scams span from the fitness realm to the ‘make money’ sectors. You don’t havfe to go further than Facebook or Instagram to realize just how many people are out there pushing these schemes.
You can see in October alone, there have been 2,500 new “coaching income” ads on Meta alone.
They all offer very similar and convincing narratives about the “riches” awaiting those brave enough to invest in their high-ticket coaching. But what’s often omitted from these pitches is the reality that the journey does not often lead to riches but instead financial hardship and disappointment.
Let’s unravel this complex scenario, piece by piece, to understand what we are dealing with and how it’s best to navigate.
Unpacking The Coaching Scam “Model”.
So how does this web of deception, this coaching scam, work? It’s not so straightforward, and that’s why it’s so easy for unsuspecting folks to get entangled.
But at its core, it’s a never-ending cycle of spending, and one that is required in order to recoup your initial coaching “course”. Let me explain step by step how it works.
Step 1: The Offer. You get introduced to this enticing offer – a hint of financial freedom – while scrolling social media or surfing the web. Often, it’s a low-ticket or even free introductory course. A chance to learn how to make tens of thousands per month doing high-ticket affiliate marketing or ‘coaching’. Sounds promising (and perhaps familiar), right?
Step 2: You Join. And so, you dive in headfirst. You sign up, motivated by stories of success and aspirations of reaching similar heights.
Step 3: Your “Spending” Starts. The rose-colored glasses start to fade. You realize this isn’t free, or low cost. You’re asked to shell out hundreds, usually thousands, for coaching. Often times some pre-bundled “course”, and often times you jump on a “call” in order to be sold on this.
Step 4: The Spending Continues. You are not done spending yet. You are being taught how to SELL others in the exact same way that you have been. You need to invest in pricey funnel software (up to $300/month), high-ticket tools, domains, autoresponder software. This can equate to $500/month. Tools that you’re assured are indispensable to your journey to the top.
Step 5: The Realization. Now, it’s dawning on you. To offset the money you’ve poured into this venture, you need to become a “‘coach” yourself to sell these overhyped courses for thousands of dollars. You’re not offering genuine knowledge or insight. You’re selling a make-believe dream that you too are trying to grasp.
Step 5: Desperation. At this point, desperation often kicks in. You’re knee-deep in this and trying to find a way out. This often means spending hundreds and thousands on traffic on Facebook, Instagram, Youtube or in Google to get your offer in front of potential victims – potential ‘students’.
So who falls for this? People just like you. People who were promised fortune and success. People who, in the end, come to the same bitter realization: they’re not a coach. They’re a cog in a relentless scheme, duped into propagating the scam.
Here an excerpt from the Federal Trade Commission warning people of such scams, in their article “When a Business Offer or Coaching Program Is a Scam“.
In this type of scheme, the promoters typically claim you can make big money with little or no experience. They say their “experts” will teach you a “proven method” for building a successful business on the Internet. Many say or suggest that they’re affiliated with well-known online sellers when that’s not true, or say things like:
“You can make 5-6 figures if you follow our system.” But that doesn’t happen.
“Learn from the experts how to generate income.” But that is a false promise.
“You can be making money now. Guaranteed!” But no one can guarantee that you’ll make money in business.
“Our students make between 50% to 100% return on their investment in the first year.” But these are nothing but made-up numbers.
The scammers make it sound like it’s easy to set up an online business and make money, and say that, for a fee, they can show you how to do it. While enticing, it’s not true. Hundreds of thousands have learned this the hard way after losing thousands of dollars to scammers for bogus business coaching services that left them with nothing but debt and broken dreams.”
As you can see, these sorts of programs are on their radar, and likely on their hit list. From our experience in the past, programs that reach a certain amount of revenue and are running such unscrupulous schemes become more prone to getting taken out by the FTC when they research a certain revenue threshold.
The Human Cost And Implications Of Coaching Scams.
Unfortunately, the very structure of these coaching scams relies on the exploitation of human vulnerability.
People are lured in with the promise of life-changing financial advantage and personal development. What often transpires, however, is a relentless siphoning off of hard-earned funds, with little to no return on investment (ROI).
Then comes the realization that you’re in the red, but have to endure. Continue funneling money into resources and platforms, just to keep the very scheme alive (with you starting your own)…simply for the hope of potential profit looming ahead.
The costly irony is that the profit point never materializes. Almost never.
The money often ends up in the hands of the few “coaching gurus” as the top of the schemes, the ad agencies that are being paid for traffic, and over priced funnel software companies that are also pushing this dream.
There are real, tangible human costs…which makes it so sad.
There’s the financial cost, which is often significant, considering the high-ticket coaching price points and exorbitant tool costs. Then, there’s the psychological cost. This stems from the guilt one has trying to recruit others into the scam…followed by the crushing disappointment of personal failure.
Coaching scams are thereby not merely unethical business models This harm is more than economic. It’s the loss of trust combined the erosion of self-belief. Not a good mix.
But if coaching is NOT the way, what is? A way to contribute positively, authentically, ethically and meaningfully to this online world, without exploiting others.
The great news is, there is. And many people are thriving online by HELPING others.
True Authenticity: Being of Real Help To Others.
In stark contrast to the misleading coaching schemes, a viable business model exists — building a legitimate business centered on truly helping people. Yes, it’s work. It takes effort, original thought, and little bit of passion. It’s not a shiny promise of easy thousands, but there is no cap to the potential that you can achieve. It’s honest, sustainable, and valuable.
In this model, you’re not playing a zero-sum game, getting ahead at the expense of others. Instead, you’re crafting a mutually beneficial outcome, helping others within a particular niche, and as a result of this value, granted the opportunity to succeed.
That is called building an “actual” online business. One that relies on you taking a passion, and building a framework around that. One that doesn’t require you to sell. You help, you recommend top brands from around the world, you add value to the internet, and you make the internet a better place.
That is what we teach.
Run forward with a foundation built on ethics, and you can create a skyscraper of a business that will pay dividends for a lifetime (and lead to your legacy).