Richard Kahn
Will November bring with it the day of the dead for lead gen? The Federal Trade Commission has had its eye on the lead generation industry since at least 2015, when the commission hosted a public workshop on the industry’s practices and related consumer protection issues. In February of this year, the Federal Communications Commission (FCC) issued a Notice of Proposed Rulemaking (NPRM) that would, among other things, “close the lead generation loophole.”
Most of the concern about the proposal is the recommendation to ban “single consumer consent as grounds for delivering calls and text messages from multiple marketers … beyond the scope of the original consent.” In other words, consumers will consent, directly or via lead transfer, to be contacted by one, and only one, marketer. No more completing one form, checking a consent box, and an aggregator sharing (selling) contact information with multiple businesses, whether they’re related to the initial interest or not. This hurts businesses and consumers at the same time since interested consumers can no longer fill out one form and have multiple companies compete for their business. You can see why this industry has been on pins and needles for months as they await the final rule that is expected in November.
We got a hint of where things may be heading back in July when the FTC, more than 100 law enforcement agencies, and the attorneys general from every state and the District of Columbia announced a crackdown on illegal telemarketing calls to consumers. Lead generators were included, eliminating any doubt that robocalls made using third-party leads are a clear violation of the Telemarketing Sales Rule (TSR). Recently, a federal judge ruled against telemarketers who made calls to consumers who had provided their information to websites that promoted assistance with job searches and public benefits.
When an entire industry is at stake, there’s plenty of blame and frustration to go around. How did we get here, what can industry players do, and what does the future of lead generation look like?
How Did the Lead Generation Industry Get Here?
They say one bad apple spoils the whole barrel. When it comes to lead generation, there are plenty of bad apples that have given the industry a bad name. Let’s dig into unscrupulous third-party lead generators.
The purpose of third-party lead generators is to connect consumers with a need to businesses that offer a product or service that meets that need. Once completing a contact form, a consumer should expect to hear from a handful of companies, enabling them to easily compare features and pricing and select the company that best meets their need and budget.
The problem is that unscrupulous third-party generators buy and sell contact information multiple times. This is problematic for lead buyers because they aren’t getting quality leads, wasting their time and money. For consumers, this activity leads to billions of phone calls a year. Many of these calls come long after they have purchased new windows or refinanced their home.
It’s bad enough when legitimate lead information is sold over and over again. Oftentimes, the contact information is not provided by real humans with a real need or interest in a business’s products and services.
As many as 30 percent of leads being sold are fraudulent. Most of these fake leads are generated by bots or human fraud farms. In the latter case, real humans do complete a contact form, often entering real contact information—likely from stolen data or scraped from people search sites—but with false intentions.
The information is sold to buyers who expect to call legitimate prospects. Instead, one of two things happens. In a best-case scenario, the contact called never answers because they don’t recognize the number and aren’t expecting the call; the cost of the lead is wasted, as well as the time the sales rep or contact center spent trying to track. In a worst-case scenario, regardless of whether the contact answers or not, a TCPA violation has been committed. Even though the contact information was real, it was not submitted by the actual contact, who also did not give permission to be contacted. Now on top of wasted lead cost and time, a business may face fines of up to $500 per unintentional violation.
Whether consumers had a legitimate need but did not consent to a barrage of calls, or their information was fraudulently submitted, they are receiving billions of unwanted calls each year. And they’re complaining to the FTC about these calls, thus putting the lead generation industry under the commission’s scrutiny.
What Can Industry Players Do?
One of the best ways an industry can avoid excessive regulation is to regulate itself and make things difficult for those who aren’t doing business the right way. Established by Eric Troutman, a prominent class action defense attorney with strong ties to the lead generation industry, Responsible Enterprises Against Consumer Harassment R.E.A.C.H. is a mutual benefit corporation on a mission to save the lead generation industry with self-regulation that will protect businesses and consumers by stopping billions of unwanted calls.
R.E.A.C.H.’s mission is to: stop unwanted calls, change the public perception of the lead generation industry, obtain positive rulings from the FCC and favorable treatment from carriers, and publicly disclose bad actors in the industry.
To carry out the mission, R.E.A.C.H. has established lead generation industry standards that will hold its members accountable while ensuring transparency for consumers. Recommendations include disclosure form standards that would advise consumers as to providers with whom their information will be shared, as well as how, and how many times, they may be contacted. R.E.A.C.H. members are required to have fraud detection in place to protect lead buyers.
Read R.E.A.C.H.’s complete comment and ex parte presentation to the FCC on behalf of its members, including Anura.
Stacking Technology to Protect Lead Generators and Consumers
The lead generation industry is strongly interdependent. Brands depend on publishers and aggregators to provide quality leads. This will hold true regardless of whether consent is one-to-one or one-to-disclosed-many.
If you’re a publisher or lead aggregator, you need trusted partners to provide legitimate quality leads to your buyers. This will be even more essential as the way consumer contact information is shared; as the demand for quality leads surpasses the available supply, the cost per lead will likely increase.
Your consent process should be ironclad, meeting TCPA compliance standards, as well as including any state-specific consumer protection language. If you’re using a consent partner, the service should include proof of consent as well as retention records.
But before you get consent, you need to know that the contact form is completed by a human, not a bot. And you must be sure that that human has a real interest in being contacted, and is entering their own contact information, not completing multiple forms with stolen or scraped data. Without that assurance, the business that buys your lead may inadvertently commit a TCPA violation and face steep fines.
This is why R.E.A.C.H. members are required to have a fraud detection solution: to protect everyone involved in the lead generation process. Publishers and lead generators providing quality leads will earn a solid reputation and maintain strong client relationships by delivering results. Brands won’t waste time and money on leads that will never convert. And consumers are contacted only by providers who have the products and services they need.
We know that Anura is not the only ad and lead fraud detection solution on the market. In fact, there are hundreds, but very few are certified by TAG, as Anura is, or accredited by the Media Ratings Council (MRC). Anura uses machine learning, multiple data points, and human experience and expertise to detect and block the fraudulent traffic that submits fake leads, while preventing false positives that can turn away good leads. We maintain our own strict guidelines for optimal protection, and we’re committed to meeting and exceeding all established industry standards.
As a proud member of R.E.A.C.H., Anura is dedicated to seeing self-regulation take hold so that the lead generation industry can survive and thrive for years to come. We’ve got our technology, and the popcorn, ready for whatever comes next.
