What is the lead-generation loophole and why is it important? We dive into the strategic implications of this little-known piece of federal legislation.

Key Takeaways

Here are a few key messages or insights that we gleaned from this session.

• The Telephone Consumer Protection Act (TCPA) of 1991 cracked down on telemarketing to landlines (pre-caller ID). It’s been amended over time including the do-not-call list.
• Now something similar is bubbling up to crack down on spam to smartphones, such as robocalls and SMS spam. The FCC passed big changes to the TCPA laws on the books.
• One impactful part is closing the lead-generation loophole.
• Background: Lead aggregators sell leads from lead forms filled out by consumers on specific websites (e.g., mortgage rate comparisons). But then these lead gen aggregators got greedy and started reselling the same customer several times to various marketers (realtors, insurance companies, auto dealerships, home improvement stores).
• This has resulted in a barrage of calls to consumers, and related frustrations, hence the most recent round of legislative scrutiny. The difference now is that the aggregators, before reselling the lead, have to get an opt-in from consumers for all the marketers that will/could contact them.
• In the 4-1 vote, the one dissenter was worried about the impact not on big marketers or lead aggregators but SMBs that survive on marketing leads.
• The good news is that the opt-in requirements will result in fewer, but higher-quality, leads.
• This will require some rethinking and optimization for multi-location brands and SMBs in terms of vetting lead sources, implementing their own lead-gen sources.
• These measures not only work towards better economics (cutting out lead-gen aggregators) but compliance, control, and audit channels to ensure that businesses are in compliance with TCPA.

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How Will Closing the Lead Gen Loophole Impact You?

Late 2023 the FCC 4-1 to close the “Lead Generation Loophole.” The ruling raised the privacy bar on marketing texts by applying many of the same protections as in the Do Not Call registry to mobile numbers. Platforms must now guide brands on how to not just survive, but thrive in this new environment. What happens next?

Matthew Marx, Evocalize