Credit: Jeff Cohen
“We need an opinion letter for our peptide business payment processor.”
For peptide businesses, maintaining operations often comes with its fair share of obstacles, and one of the trickiest hurdles to clear involves credit card processors. A common issue these businesses face? The perceived need for legal opinion letters to address compliance concerns and meet processor requirements. But here’s the truth—not all opinion letters are created equal, and unless approached strategically, they might cause more issues than they resolve. It’s a familiar situation for many in the industry. However, opinion letters aren’t always the silver bullet they’re assumed to be.
Credit card processors often ask for legal opinion letters as a way to mitigate risk, ensure compliance, or provide assurance. But here’s the catch: processors rarely communicate clear, universal criteria. One processor’s “compliance issue” might involve website policies, while another could request detailed analyses of business practices and internal controls. Without understanding their exact expectations, an opinion letter risks missing the mark entirely.
An improperly drafted letter lacking phrasing specificity or vital compliance details can delay approvals, damage your processor relationship, or even lead to account suspension. Simply writing a letter stamped with a law firm logo on top isn’t enough. Cookie-cutter solutions don’t work when it comes to complex compliance requirements.
When dealing with processor compliance challenges, a successful outcome starts with collaboration.
Before drafting any opinion letter, it’s crucial for your healthcare lawyer to collaborate with you and your credit card processor. Each processor’s needs may differ significantly—not every compliance issue has the same solution. For instance:
· Internal Policy Assurance: Your processor may need documentation showcasing robust internal policies addressing risks or compliance concerns.
· Website Scrub: Sometimes, compliance issues can stem from your public-facing website. Identifying and mitigating potential red flags on your site can ease processor concerns.
· Strategic Communication: The processor may require a formal compliance plan or specific wording within an opinion letter for comfort and risk reduction.
By investigating and fully understanding the processor’s specific requirements, you save time and avoid one-size-fits-none approaches. This step ensures that any letter drafted directly addresses the problem, eliminating guesswork.
Not every situation demands an opinion letter. Here are some strategies and solutions to consider when faced with demanding processors:
1. Start with Dialogue
Your first step should always be a conversation between:
· Your business
· Your healthcare legal counsel
· The credit card processor (or their compliance department)
Understanding what the processor truly needs is critical. Are they looking for assurances about your adherence to regulations? Or are they seeking a detailed compliance plan? Without clarity, you risk shooting in the dark.
2. Explore Non-Letter Solutions
An opinion letter might not always be the ideal solution. Depending on the situation, other strategies might address concerns more effectively:
· Developing comprehensive regulatory compliance policies and procedures tailored to your operations
· Conducting a peptide website or marketing materials audit to identify potential red flags
· Providing letters of assurance to the client instead of direct communication with the processor
By aligning your solution to the processor’s needs, you not only reduce compliance issues but also strengthen your business practices.
3. Draft and Fine-Tune
If an opinion letter becomes necessary, ensure that it’s collaborative from start to finish. Healthcare legal counsel should draft it in consultation with your processor while tailoring it to your specific needs. A well-crafted letter is:
· Precise and specific in its language
· Aligned with the processor’s requirements
· Focused on providing the assurance or security they desire
Sharing drafts with you and refining the content before final delivery ensures it remains impactful and effective.
Opinions from legal counsel carry weight—but they also come with inherent legal implications. Here’s what you should know:
1. Attorney-Client Privilege is Key
When a lawyer communicates with their client, the information shared is protected by attorney-client privilege. This ensures confidentiality and reduces your business’s exposure to legal risks. However, this protection is forfeited when communications are shared directly with third parties, such as payment processors. It’s often preferable for the attorney to provide the opinion directly to you rather than to the processor to retain this protection.
2. Liability Risks with Opinion Letters
Asking a lawyer for an opinion letter comes with inherent liability. A poorly handled letter that fails to target specific requirements risks creating legal or business complications without solving the real issue. That’s why the process of drafting should always start with identifying the root cause of the processor’s concerns.
3. Customized Solutions Reduce Risk
A legal opinion letter should not be treated as a formality. Instead, it’s a strategy that, when handled properly, alleviates processor concerns while protecting your business interests.
Dealing with credit card processors can feel daunting— but the key to resolving processor compliance challenges lies in crafting tailored, practical solutions through collaborative communication. Skipping the guesswork and focusing on targeted actions ensures your business remains compliant, builds stronger processor relationships, and avoids unnecessary disruptions.
If you’re facing compliance challenges with your peptide payment processor and need expert guidance, reach out to a healthcare legal professional with experience in the peptide industry. By adopting a collaborative approach, you’ll not only meet your processor’s needs but also create a business foundation for long-term success.
