Lead Generation

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If you’ve been focused on only the high-level statements from the CFPB, you might already expect Rohit Chopra to fashion himself and the agency as “pro-consumer.” Consistent with that approach, the agency just signaled its distaste for, and desire to severely restrict, the common and useful advertising practices of comparison-shopping platforms and lead generation.

Using its bully pulpit (and not notice and comment regulation or waiting for explicit legal authority), the CFPB released a Consumer Financial Protection Circular, stating that operators of digital comparison-shopping tools (“Operators”) and lead generators can violate the Consumer Financial Protection Act’s (CFPA) prohibition on abusive acts or practices if they steer consumers to certain products or services—or certain providers—based on compensation received by the lead generator or Operator. This might feel like standard consumer protection-speak, except that equating compensation models to abusive conduct means that the CFPB has performance advertising in its crosshairs.

In its press release announcing the circular, the CFPB explains, “[T]he guidance discusses how regulators and law enforcement agencies can evaluate operators of comparison-shopping tools that accept payments from financial firms to manipulate results or suppress options that may better fit the consumer’s stated preferences.” In the same release, the CFPB also announced that it would be “developing a consumer-facing tool that, once finished, will bring more transparency to credit card comparison-shopping.”Continue Reading Why the CFPB’s Preferencing and Steering Practices Circular Should Scare Lead Generators and Consumer Financial Services Providers

Join us as we spotlight select chapters of Venable’s popular Advertising Law Tool Kit, which helps marketing teams navigate their organization’s legal risk. Click here to download the entire Tool Kit, and tune in to the Ad Law Tool Kit Show podcast, to hear the authors of this chapter dive deeper into the issue of lead generation in this week’s episode.

In the evolving world of lead generation and performance-based customer acquisition, the quest for profits can lead to big legal risks, some of them too large for advertisers that buy leads through third parties. Advertisers that harness the power of lead generation should consider the best practices listed below to mitigate legal risk.

Lead generation best practices:

Understand basic advertising law. Advertising must be truthful and not misleading. Marketers and lead generators should understand what can make an advertising claim “deceptive,” as well as the appropriate use of disclaimers.Continue Reading Lead Generation: An Excerpt from the Advertising Law Tool Kit

Episode 4 of the Ad Law Tool Kit Show, “Lead Generation,” is now available. Listen here, or search for it in your favorite podcast player.

In the realm of lead generation and performance-based customer acquisition, pursuing profits carries significant legal risks. In this episode, I talk to Venable partners Jonathan Pompan and Ari Rothman to talk about how advertisers should heed crucial best practices to mitigate these risks.

Venable’s Ad Law Tool Kit Show will help you and your organization identify and avoid potentially problematic advertising practices. Over the course of 12 episodes, we examine the increasingly complex regulatory landscape that governs the promotion of goods and services—from negative option marketing to copyright protection and influencer endorsements.Continue Reading Listen to Episode 4 of Venable’s Ad Law Tool Kit Show – “Lead Generation”

This week, the Federal Trade Commission (FTC) announced a Proposed Stipulated Order with lead generator Response Tree LLC and its president, resolving allegations that the company violated the Telemarketing Sales Rule (TSR) and Section 5 of the FTC Act. The complaint alleged that the company operated “consent farm” websites that misled consumers into providing their telephone numbers, falsified lead data, and obtained leads without requisite consent, resulting in unlawful prerecorded calls and calls made to telephone numbers on the Do Not Call Registry.

First, the complaint alleges that defendant’s websites duped consumers into providing their telephone numbers by misrepresenting that they were consenting to receive calls about home mortgage financing quotes. According to the complaint, the defendant sold the lead to partners who marketed products or services completely unrelated to home mortgages or lending.Continue Reading FTC Bans Lead Generator from Participating in Robocalls in $7 Million Settlement

Last week, the Federal Communications Commission (FCC) issued a Notice of Proposed Rulemaking proposing to “ban the practice of obtaining a single consumer consent as grounds for delivering calls and text messages from multiple marketers on subjects beyond the scope of the original consent.”

According to the FCC, the proposed rule’s intent is to prevent lead generators from obtaining consent to receive calls and texts from multiple “partner companies” identified through a hyperlink rather than on the same page where consent is obtained. Implementing this rule could drastically change the way lead generators obtain consent for marketing calls and texts under the Telephone Consumer Protection Act (TCPA).Continue Reading FCC Proposes Rule to “Close the Lead Generator Loophole,” with Business-Changing Ramifications

Venable hosted another jam-packed session on the regulatory and litigation risks facing the lead generation industry today, and strategies for mitigating them. In the webinar, Daniel Blynn, Alexandra Megaris, and Jonathan Pompan covered federal and state law enforcement priorities; TCPA, legislative, licensing, and regulatory developments; and more.

Key takeaways:

  • Dive into federal and

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Venable attorney Jonathan Pompan joined LeadsCon’s Warren Pickett on the LeadsCon Industry Insider podcast episode, “Lead Generation Compliance and Regulation in Today’s World. Who’s Minding the Store?” to discuss current lead generation advertising compliance issues. With government, the private sector, and the daily news cycle engulfed by all things related to COVID-19, speakers discussed amongst…

no phone scamsCriminal charges against six individuals allegedly involved in a telemarketing scheme targeting elderly people were brought today by the US Attorney’s Office for the Southern District of New York. According to the Complaint, the defendants contacted elderly consumers with business opportunities requiring nothing more than a simple cash investment. The consumers were promised that they would see large returns on that investment without them needing to do anything other than the initial investment. After making the investment, the consumers would then receive additional telemarketing calls offering other services such as coaching, business development, and tax preparation services. The Complaint alleges that none of the consumers received what they were promised.
Continue Reading Criminal Charges Brought Against Telemarketers

When the Federal Trade Commission (FTC) investigates a case, it looks at it from the first contact the consumer has with a product or service through the end of the consumer experience. For many consumers, the first contact with a product comes through lead generation, where a “lead generator” tries to find consumers interested in a particular type of good or service and then sell those leads to marketers. The FTC released its staff perspective paper on lead generation in September. Demonstrating that the FTC’s interest in lead generation is not just academic, the FTC recently asked the Department of Justice to file a complaint on the FTC’s behalf against a collection of entities known as the Consumer Education Group, charging them with violating the Telemarketing Sales Rule. The complaint alleged that the Defendants made illegal outbound telemarketing calls — some using robocalls delivering prerecorded messages — to consumers on the national Do Not Call (DNC) Registry without consumers’ express written consent or a preexisting business relationship.
Continue Reading FTC Complaint Confirms Interest in Lead Generation