Evolving FCC Regulations. Is Lead Generation Dead?

Unless you’ve been living under a rock for the past year, you know that the Federal Communications Commission (FCC) is cracking down on the lead generation industry. The December ruling created extraordinary issues of concern for lead generators and the businesses that depend on purchasing leads. The two most critical changes in regulations created a new one-to-one consent requirement, and any calls from a lead generation list must be “logically associated” with the source of the lead.

The first is straightforward. When the law goes into effect early next year, consumers will choose which companies they want to hear from rather than having their contact information sold to multiple providers, many of whom they have no intention of buying from.

The second is less clear. For example, the gist is that if a consumer provides contact information for a quote about homeowner’s insurance, their phone number and email address should not be sold to companies selling windows or solar panels. This step seems to be added assurance as one-to-one consent would likely resolve this issue.

Do these new regulations mean a death sentence for the lead generation industry? We think not. In fact, these changes can help the industry emerge better and stronger than ever. Hear us out.

Bad Apples Have Spoiled the Lead Generation Barrel

Let’s be honest: the lead generation industry has put itself into the position it’s in today. There have been too many bad apples in the barrel for too long. Some lead generators focused solely on selling leads to as many buyers as possible for as long as possible. This meant that potential consumers were getting too many calls from too many companies, and often for months after they no longer needed or were interested in the product or services.

It also meant that lead buyers were paying for leads that would never convert because the leads were stale, the product or service they were selling was not what the consumer was looking for, or the leads weren’t legitimate. The unscrupulous lead generators could get away with these practices as long as the buyers didn’t complain or consumers didn’t start filing complaints with the FCC.

The lead generators who have always had good intentions and tried to do things the right way should welcome these new rules. They will continue to review and update their processes and partners to stay in compliance and do all they can to protect their lead buyers and consumers. They’ll prove they’re in the business for the long haul and for the right reason: finding real, interested prospects for their clients.

How Will the New Rules Address Lead Generation Fraud?

These new rules will go a long way to protect consumers as well as reputable lead generators and their buyers. There’s just one thing that isn’t being addressed: lead generation fraud.

Lead generation fraud will not magically vanish when the new rules go into effect. In fact, it is likely to become an even bigger concern. With consumers selecting and providing contact to only those companies they will seriously consider buying from, it’s a solid bet that the number of leads will decrease. That means it will be more important than ever to ensure the contact information is correct: that an actual human with genuine interest has provided accurate contact information and consent.

Unfortunately, duplicitous lead generation companies won’t go away, nor will they be committed to protecting their clients. Why? Because some lead buyers will still see these sources as an economical way to grow their business. Other naive buyers may also assume that these lead generators are playing by the new rules and doing what they should to generate valuable, legitimate leads.

Buyers may not ask on the front end what the sellers are doing to prevent fraud. Even if the sellers are doing something about it, they may not have the best ad fraud solution in place. When the leads turn out to be fraudulent, leading to more consumer complaints than sales, buyers may start to question the source. That’s when they learn that there is no ad fraud solution or the solution has the ability to be manipulated to pump fraudulent traffic to buyers that don’t know any better.

This action, or lack thereof, makes these unscrupulous lead generators as culpable as the ad networks that drain advertisers’ budgets with fake clicks or conversions—which makes them no better than the fraudsters themselves! They all know what’s going on and continue to perpetrate the fraud, using solutions that can’t properly prevent it, and/or shifting fake leads to buyers who don’t notice or complain about lead quality.

How Can Lead Generators and Buyers Survive and Thrive Under The New Rules?

Most reputable lead generators are already doing things the right way. They should take advantage of  the time they have before the new rules go into effect to review and update their tech stacks and vet current and prospective partners.

They should ensure they have an ad fraud solution to protect all parties, including themselves, by detecting and blocking the sophisticated invalid traffic (SIVT) that significantly contributes to fraud. They will likely go one step further and make sure that the ad fraud solution they are using is committed to following the rigorous guidelines established by the Trustworthy Accountability Group (TAG) or the Media Rating Council (MRC). They know that the more certified partners there are in the chain, the more protection they can offer their buyers, so they prefer ad networks and channels that are also certified or accredited.

Buyers should ask their lead sources what they’re doing to protect them from fraud and the potential TCPA fines and lawsuits that could result. Don’t be afraid to push back if you don’t like or trust the answers. Stay vigilant about the leads you buy, and contact lead generators as soon as you detect any issues.

The legitimate lead generators will want to identify the source of the problem and correct the course as soon as possible. The bad ones? Well, they may take token actions to improve things in the short term, but do yourself a favor and seek better sources.

At Anura, we’re not just trying to stop the fraud; we’re doing it. We work with a lot of solid lead generators and other partners who leverage the latest technologies and do all the right things. A great example of this is when What If Media Group approached us looking for ways to maintain high-quality web traffic for their clients. “Anura was a game-changer for us,” said Andrew Klayman, Chief Sales Officer at What If Media Group. “The clarity it’s given us to assess and act on traffic quality metrics has been priceless. It makes our team more confident, it makes our company more efficient, and it keeps our clients happy.” Click here to read the rest of the story on how Anura was able to improve the quality of their traffic leading to efficiencies and the ability to scale.

Anura is one of the few fraud solutions that is TAG Certified Against Fraud. Our CEO is on the board of directors of Responsible Enterprises Against Consumer Harassment (R.E.A.C.H.). This mutual benefit corporation has established member standards that protect consumers and its members in the lead generation industry. R.E.A.C.H. also provides updates to help members navigate the changing regulatory environment.

Next month, we’re joining other pros who believe that the lead generation industry is far from dead. LeadsCon, the industry’s largest event, will be held April 8-10 at the Paris Hotel and Casino in Las Vegas. Stop by and visit us in Booth #815 for invaluable insights and to learn more about our cutting-edge solutions to combat lead generation fraud. You can also catch our CEO, Rich Kahn, as he joins an expert panel to discuss how the industry can leverage AI to maximize opportunities while minimizing risks. 

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