It’s good to be home from an important recent FTC workshop on online lead generation, which I attended with my Chief Compliance Officer and panelists Greg Gragg and Michael Ferree, two fellow board members of our exciting new LeadsCouncil – that you are invited to join. As a compliance-focused member of the Digital Performance Marketing industry for the past two decades, I very much looked forward to this event. After first breaking down all of the lead generation players and detailing exactly what is important to whom, I turned my eye to some often-misleading quotes from the Consumer Advocacy side of things.
Who doesn’t find some frank feedback useful?
Some classic quotes (and my opinions on what they said) from the Consumer Advocates, many of whom paint the industry with the broad brush of misunderstanding or zealotry:
“If a prospective student submits a lead, they’ll get calls from 100s of schools”. – Not true…well most of the time.
David Halperin – Consumer Advocate Attorney
“In the for-profit school business, they use strippers as recruiters” & “If I were you, I would never enter my phone number anywhere on the Internet.” – I am sure a stripper got a job as an admission rep somewhere, but it is not the norm. Mr. Halperin appeared more interested in making a name for himself with his outrageous statements than finding workable solutions. (more…)
As both a Board member of the exciting new LeadsCouncil (www.leadscouncil.com) and a compliance-minded member of the Digital Performance Marketing industry for the past 20 years, I flew to Washington D.C. this week with my Chief Compliance Officer to attend an FTC workshop on lead generation. We had received notice that the FTC was going to hold a panel discussion on lead generation in the lending and education verticals, and we wanted to attend. LeadsCouncil Board members Greg Gragg and Michael Ferree were both panelists at the event, and the council was also indirectly represented by VP & Head of Compliance, John Henson from Tree.
These types of panels and acceptance of written comment are usually a precursor to enhanced enforcement efforts or proposing additional regulation. Discussions around these events focused on tools and processes that consumers and businesses could use to determine where and how their information was being used as well as the current disclosures, and whether they are enough to protect the consumer. The following is a summary of the topics and issues discussed and topics to think about to improve your business practices:
What is important to the consumer?
- Receiving reliable, accurate information on the products and services they requested.
- Competitively-priced options to ensure consumers get the best price for the best service.
- Expectation that their data and information will be protected.
- To control the flow of communication during the decision-making process.
- Personalized search options to only receive options that meet their criteria.
Once upon a time, before the National Do-Not-Call regulations and the Telephone Consumer Protection Act, 47 USC 227 and 47 CFR 64.1200, business were free to “cold call” consumers to introduce them to new products and services. Those days are long past, and more importantly, cold calling landline or mobile numbers on even your old leads can create tremendous liability for you and your company. Despite these regulations, I still find myself frequently the recipient of such cold calls regarding a mortgage, and when queried, the callers often have never even heard of TCPA. It’s mind boggling! Understanding these regulations are critical for anyone in business given the rash of Federal Class action lawsuits against corporations from professional litigants looking to extort your company.
Background on the TCPA
The TCPA and its implementing rules impose limitations on calls placed to both residential and wireless telephone numbers. The TCPA prohibits telemarketing calls made using an artificial or pre-recorded voice to residential phones, without prior express consent. The TCPA also prohibits making non-emergency calls using an automated telephone dialing system or artificial or pre-recorded voice to a wireless telephone number without prior express consent. If the call to the wireless number includes an advertisement or is considered telemarketing, the express consent must be in writing. Failure to comply with these rules results in automatic penalties ranging from $500 up to $1,500 per unsolicited call placed if you disregard TCPA compliance. Unlike DNC penalties, this is not a fine for the calls you made to the specific complainant, but rather EVERY call you made to anyone’s mobile number since TCPA was updated in Oct of 2013, if the Class is certified in litigation. Even if compliant, the costs of defense are enormous and litigants often file these as a way to extort $50,000 or more from companies, as judgments can be in the hundreds of millions of dollars and take years in court. Calling under the pretext of a “survey” to generate a sales opportunity is also prohibited. TCPA includes uninvited text messages.
On July 17, 2015, the FCC issued new rules regarding TCPA in an attempt to clarify this area of law. While the new rule results in a number of changes to the TCPA, none is more significant than the broadening of the definition of an “automated telephone dialing system” (ATDS). In simplest terms, the FCC now defines an ATDS as any equipment that is actually or potentially able to dial random or sequential numbers – even if not actually used that way, and even if it must be altered in order to be capable of doing so. In essence, your iPhone can be considered an automated dialer in certain circumstances. Given the fact the US economy relies on consumer spending for 70% of total GDP, these laws are not only stifling our economy in my view, but placing undue burdens on legitimate businesses. Bottom feeding lawyers and professional litigants are clogging up the courts with these cases due to the extremely high value of potential judgments.