Stripe froze $76K of this coach’s revenue. Are you at risk?
After processing over 4,800 transactions and generating more than $76,000 in sales, a business coach’s Stripe account was suddenly frozen without warning. No fraud occurred. No chargebacks were initiated against her. No disputes were pending with clients. She just received a vague email from Stripe about “risk.”
It’s also important to note that while this coach is successful, she’s not a large corporation. Stripe flags, suspends, and freezes the accounts of small businesses every day.
The last thing I want to do is give you one more thing to worry about. I’d just tell you to turn on the news for that. But this isn’t an isolated incident. I know of multiple instances of this happening and want you to be prepared.
Why Stripe freezes legitimate businesses
Stripe prohibits businesses from using its platform for a wide range of activity it considers high-risk or legally questionable. These restrictions exist because Stripe itself can be held liable. Back in 2020, Stripe was found liable and fined for violating consumer protection law. They now have one of the strictest compliance monitoring systems of any major payment processor.
Unfortunately, this means legitimate business owners can get caught in the crossfire if their website or business setup raises a flag with Stripe.
The biggest risk flag that can trigger a Stripe suspension:
Your Privacy Policy is missing, non-compliant, or incomplete.
Even if you don’t have a website, you’re still required to have a compliant Privacy Policy and clear terms. If you’re collecting names, emails, or payments-whether through a website or standalone sales or checkout page-you’re handling personal data. This collection of personal data puts you under the purview of global data privacy laws which trigger a whole host of legal obligations. Stripe expects to see those policies linked in your footer and easily accessible.
Without a compliant Privacy Policy explaining what you’re collecting and how you’re using it, platforms like Stripe assume you’re not meeting legal requirements and may suspend or penalize your account.
And it’s not just Stripe. A missing or non-compliant Privacy Policy (ahem, free Privacy Policies) can lead to:
- Ad account shutdowns (Meta or Google)
- Email marketing platform restrictions
- Affiliate platform rejection
- Client pushback from savvy/privacy-conscious customers who are concerned about collection of their personal info
Why free Privacy Policies don’t work
They’re usually outdated, incomplete, and/or missing critical disclosures for email marketing, third-party tools, and international laws. I’ve audited a bunch that weren’t GDPR-compliant. Under laws like the GDPR and CCPA, fines for privacy violations can run into thousands or even tens of thousands of dollars.
In the case of the business coach, her Privacy Policy was incomplete-and that was enough to trigger a Stripe suspension.
Other Stripe suspension risk flags
- You don’t have clear Terms and Conditions with refund policies on your site
- You use subscription models (common in memberships). The recurring billing, in the absence of detailed delivery expectations, can raise red flags. Not dissuading anyone from having these; just make sure you have a contract attached to mitigate any risk.
- You have high chargeback rates.
- Your offer includes a free trial, but lacks disclosures around when automatic charging takes place, how someone can opt out, etc.
- You use results-based language in your marketing without a proper disclaimer, such as “guaranteed results” or “10x your income.” (Note: a lawyer-drafted Disclaimer Policy will protect you here. Please read on, you can knock out all of these bullet points with the right website policies bundle)
- Your industry is on Stripe’s risk radar (e.g. Stripe really doesn’t like spiritual businesses, unfortunately)
- You sell digital content or coaching programs without clearly explaining what’s included, how and when access is delivered, and whether support is part of the purchase (having contracts eliminates the risk here).
What Stripe looks for in product and services delivery terms
One major trigger is vague or missing details around how your product or service is delivered. Stripe wants to see that your customer knows exactly what they’re paying for, and how they’re going to receive it.
That means clearly stating:
- When access begins (immediately, after a coaching call, on a specific date)
- How access is granted (via email login, course platform, downloads)
- What is included (live calls, templates, modules, feedback, etc.)
- Whether support is included or not (this must be clear)
All of the above are covered in lawyer-drafted contracts, so make sure you have these for your offers. If Stripe doesn’t see contracts on your site or in your checkout flow (e.g. “I agree to the Terms of Use” with the Terms of Use for your offer hyperlinked), it may assume you’re not disclosing everything properly as required by law, and that can increase your risk profile.
What happens if you’re flagged by Stripe
If Stripe determines your business is high-risk, it may:
- Monitor your transactions more closely
- Withhold part of your funds in a reserve account
- Limit or suspend your account for 90 days or more
- Impose higher processing fees
There’s no advance warning here, and once your account is locked, you can’t access your revenue or collect future payments until Stripe decides to lift the freeze.
What to do now to eliminate or mitigate risk
- Lawyer-drafted website policies. At an absolute minimum, a lawyer-drafted, globally compliant Privacy Policy for the footer of your webpage/sales page.
- For optimal protection and risk aversion, also include a Terms and Conditions Policy and a Disclaimer Policy. The Terms and Conditions Policy ensures your refund terms are clear in addition to protecting all of your website’s I.P. A Disclaimer Policy protects you and your website from liability. It shields you if someone misuses your advice or misunderstands what you offer (especially important for coaches and wellness professionals). It’s also a legal requirement if you have testimonials, affiliate links, sponsored posts, etc. on your website or sales page. (GET ALL 3 POLICIES HERE)
- Any services or courses sold from your website must have a contract disclosing:
- When access begins (immediately or at a future date)
- How access is granted (course login, downloadable content, scheduled calls)
- What is included (modules, live support, templates, etc.)
- Whether support or feedback is included or not
- (**A lawyer-drafted contract, which you should have anyway, will cover all of this 👆! Head to Contracts to grab our templates, or reach out if you need help deciding what you need!)
- Keep detailed transaction records
- Keep all Stripe business info and docs accurate and current
If you want to avoid unnecessary account freezes, revenue holds, and compliance headaches, the most important step is getting your website policies and contracts in order!
Anything unclear? Please let us know if you have any questions!