Reasons Counselors and Therapists Lose Licenses

By David Joel Miller, MS, Licensed Therapist & Licensed Counselor.


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Why do Counselors lose their license?

There are three main reasons counselors lose their licenses and a few minor ones. Frankly, most Counselors who “lose” their licenses don’t actually lose it. Everything here about counselors also applies to psychotherapists, therapists, psychologists, and related professions in most places.

Remember that as serious as these reasons are, most, almost all, counselors do this kind of work because they want to help people. The FEW that get their licenses revoked is just that – a very small number.

If a counselor or therapist is accused of committing a serious offense the licensing board investigates. Should the accusation turn out to be true the license board “revokes” the license. That revocation can then be “stayed” meaning the license is not gone yet but the counselor has to do certain things to get the license cleared.

One thing they have to do is pay back the licensing board for the cost of the investigation and any fines or fees. Second, they have to go through classes or additional education. They will also need to work for a period of time under the supervision of another licensed counselor just like when they were an intern or trainee. The hardest part of all is the requirement that they tell each and every client they are being supervised and by whom.

Sometimes the counselor will decide to give up or surrender the license rather than go through all this.

The three biggest reasons for revocation of a license are:

Sex with a client.

This is never OK. Forget all those stories about falling in love with the therapist or teacher. Most of the time this happens because both people are having problems and the relationship is never one of two equals. For someone who has a position of authority to become sexual, betrays the client’s trust.

Frequently the counselor loses their license over this and then the relationship breaks up, creating two ruined lives. This has happened a lot with substance abuse clients and then the client relapses leaving the counselor out of work and in a relationship with a using addict.

In California we are required to have a copy of the book “Professional Therapy Never Includes Sex” with us whenever we counsel and give a copy to any client who says they had sex with a previous provider. This book is available free at the California Board of Behavioral Sciences website.

Most other states and countries have similar regulations. Check the website for the agency that licenses counselors in your jurisdiction.

Being impaired.

This mostly means being arrested and often involves the use of drugs and alcohol. Since most counselors believe in recovery we like to see impaired professionals go for treatment. What is not good is for them to continue to see clients while using and drinking.

Counselors also get licenses revoked for committing crimes that result in jail or prison time.

Dual relationships involving money.

The big dual relationship is number one – Sex with clients. But lots of counselors fall for number three also. Your therapist should not borrow money, get into a business deal or otherwise be involved in your finances other than to help you decide what to do. If they stand to make a buck on you for any reason other than the rate they charge per hour this is looking bad.

Insurance fraud.

Mostly this involves a counselor billing public insurance for work they didn’t do or for way more time than they actually spent with the client. It is really suspicious if one counselor bills the state for a thousand dollars a month worth of work and another counselor bills – say twelve million. For a big lie like that, you get to lose your license, go to jail, and get the stupid person of the year award.

Remember the vast majority of counselors and therapists do NOT get their licenses revoked. The few professionals who do harm clients by doing the things that cost them their licenses make things bad for everyone, especially for their clients.

Hope that answered the question “Why counselors lose licenses” and helps people to find honest ethical help in their local area.

For more on this subject see:

5 Rules for Picking the Right Therapist

What to do if Therapy is not helping

How to Spot a Bad Therapist

Staying connected with David Joel Miller

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20 thoughts on “Reasons Counselors and Therapists Lose Licenses

    • I think the exact timeframe would depend on the situation and your jurisdiction. As I understand the process here in California, the board of behavioral science would investigate the allegations and then, having made their determination tell the therapist what they would need to do to get that stage of revocation. Usually, that involves taking additional classes, working under supervision from another licensed professional, and paying back the cost of the investigation. Once they tell you what you have to do to settle the case, you won’t have long to decide. Typically the therapist will have to do all these things for several years until they next renew their license. And the incident will remain on their record, which is visible to the public permanently. Remember, this process is only for serious violations. Minor things like not doing enough CE’s might be handled with a simple fine. The big things are 1. Engaging in sex with the client. 2. Substance abuse generally with the client or resulting in an arrest. 3. Inappropriate financial relationships with the client, either lending or borrowing money or employing the client while they’re still your client. If you have specific concerns, you should ask for clarification from the licensing Bureau in your jurisdiction or consult an attorney specializing in professional licensure cases.


  1. Is it worth reporting a LCSW-R in New York ethics board, for being married and committing adultery. Not only is she being unfaithful to her husband, but she is committing adultery with another woman’s husband. She is on her fourth marriage. She is a Marriage and Family Social Worker.


    • Probably not. While most people don’t approve of people committing adultery, it’s no longer illegal and therefore not a crime. In California, we have no-fault divorce (actually called dissolution of marriage not divorce) so here proving adultery wouldn’t even get the injured spouse extra money. Licensing boards are primarily interested in whether someone is competent to practice that profession. To take an action on their license the offense would have to be related to their professional life. If the therapist was having an affair with a client, that could cost them their license. Having an affair with someone they met elsewhere is probably nobody’s business but the parties involved. When people get to divorce court about 110% of the time one or more of the parties have committed adultery. About 65% of all men and 45% of all women have had an affair. I doubt that the person involved is both a marriage and family therapist and a licensed social worker. Those are 2 very different licenses, though social workers do sometimes work with couples, it’s usually not around marriage counseling. Professionals are people to. Some doctors smoke cigarettes and drink too much alcohol, but they may still be a good person to see if you have a heart attack. For any affair to occur, it requires 2 people. Often the injured spouse, especially if that spouse is a woman, prefers to blame the other woman rather than look at her own relationship. You also have to be very careful with the definition of affair. Most men would only consider it an affair if they actually engaged in intercourse. Most women, however, would consider it an affair if their husband or partner was sexting or engaged in cybersex. The place this sort of thing should be discussed is between these men and their partners or in marriage counseling. The licensing board would not be interested. If these men’s spouses decide to file for divorce they should ask their lawyers if this even matters in their state. Hope that explains the principles involved.


  2. Is it worth reporting a LMHC in NY to the ethics board if she abandoned her clients and quick a clinical position with no notice. She had a case of kids and teens


    • Thanks for the question. Let me try to give you the best answer possible. Whenever a counselor stops seeing clients, regardless of the reason, it can be really hard on the clients. It takes clients time to feel comfortable with their therapist and it can make them feel abandoned when a counselor leaves whether it suddenly or they been given 6 months advance notice. While I don’t know the specific laws or regulations in New York, let me suggest some general principles that apply here.
      1. The clients are clients of the agency, not the particular counselor. When a counselor leaves it’s the agency’s job to provide another counselor to see the client. Generally when a counselor leaves they can’t take the client with them. (Since you said they quit suddenly I’m assuming here it’s not a private practice setting.)
      2. Ethically if a counselor is impaired for any reason they shouldn’t be seeing clients. If the counselor had a family member die, or they were diagnosed with cancer or had some other physical or emotional problem that would interfere with seeing clients, then ethically they should stop seeing them and arrange for someone else to see their clients. Not knowing all the facts I can’t tell if the counselor quitting was a good thing or a bad thing.
      3. It’s the client who needs to make the report. While it may upset other people in the field or with knowledge of it it’s always the client who has to make the report. With children, this might be the parent or guardian. While it may upset people work in the field that the counselor didn’t give some notice in this situation it doesn’t sound like client abandonment.
      4. The report would have to be made to the agency in that state that regulates counselors. There is no specific ethics board to report them to.
      So no, there’s probably no reason to report this to anyone, other than a supervisor at the agency in order to make sure that the child gets reassigned to another counselor and continues to receive services. If this counselor does this more than once, word will probably get around and they will have trouble getting future jobs. Hope those thoughts are helpful.


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  4. Although I’m sure there are wonderful counselors who work hard to help the lives of others, the total lack of oversight and enabling poor performance by the Board of behavioral sciences has more or less allowed god complexes and malpractice for financial gain to be the norm. They reasons people lose their licenses is never because they are just bad.


    • Sounds like you’ve had some bad experiences. Someone having a license in any profession means they met the minimum requirements for that profession. Absolutely, some counselors are better than others. And the counselor who is right for you may not be good for someone else. I doubt that malpractice is the norm in any profession. And of course, almost all people who work do it for money. What is good counseling and what is poor counseling is open to interpretation. I hope that you are able to find someone who can be helpful to you.


  5. Can you tell me whether or not a Psychologist convicted of a felany in California (for kidnapping) would automatically lose his license? I am writing a novel. The time period is the late 1990’s.


    • Interesting question. It’s a little more complicated that a yes or no. Counselors and therapists are licensed by the board of behavioral sciences (BBS.) Psychologists are licensed by the Board of Psychology. Slightly different rules. If he was convicted but did not do prison time it would be different than if he did prison time. Absolutely, either way, the license would be revoked. It is possible if he did not go to prison to get the revocation stayed and then to do some remedial trainings, and be supervised by another psychologist to get the license reinstated. Possible but very unlikely. If he goes to prison, not likely they can get the revocation stayed and even less likely that he could get a new license when released from prison. Remember psychologists have Ph.D.’s. Even without a license he would still have this degree and could call himself Dr. so-and-so. He could write books, teach college classes, have a TV show, maybe even do some life coaching.
      What he couldn’t do is treat patients for mental illness. On the other hand, I doubt if any employer would hire him to work around other people. Likely he would come out of prison on parole and have to do some kind of low-paying working with his hand’s job.Hope that helps. Let me know if I can be of any more assistance. I’d be interested in hearing about your book when it’s completed.


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