What are Fake Leads? What Do They Cost Me? How Do I Stop Them?


It’s no secret that the lead generation industry will face new challenges this year. Whether your business is generating leads or you’re generating leads for your own business, one thing doesn’t change: the fight against fake leads.

The FCC’s recent ruling will require one-to-one consent, meaning that lead contact information can only be sold to the buyers that consumers provided express consent to contact them by phone or text. One-to-one consent likely means that there may be fewer leads to go around, making it more important than ever to ensure your leads are genuine.

While any mandatory changes are months away, we know they’re coming. Now is the time for all marketers, publishers, and lead generators to get their new lead generation strategy, tactics, and partners in order.

In this post, we’re answering the questions you are, or should be, thinking about: What are fake leads? What are the risks to your business? How can you identify fake leads? And most importantly, how can you stop them?

What Are Fake Leads?

Fake leads are created when contact information is fraudulently entered into a contact form. Whether entered by bots or human fraud farms, whether the information is fake or real, the important thing to know about fake leads is that the contact information did not come from a real person who has a genuine interest in your company’s products or services.

A fake lead is different from an unqualified lead; an unqualified lead usually comes from someone with a legitimate need or interest in your products or services but may not have the budget or be ready to buy.

What do fraudsters have to gain by deploying bots or hiring human fraud farms to enter real or fake contact information in forms? Advertisers or ad networks pay them for doing so, thinking they are getting legitimate leads. Because the information provided often appears legitimate, it’s only when they begin their contact efforts that they realize the leads are fraudulent, and by then it’s too late.

Fake leads can result in lead generation fraud. Learn about the costs of lead generation fraud here.

How Do Fake Leads Put Your Business at Risk?

Fraudsters are singularly focused on making money. In doing so by creating fake leads, they are putting your business at risk in several ways, including:  

1. Busting Your Ad Budget

You pay the same for fake leads as you do for real ones, so the most obvious impact is draining your marketing budget without generating revenue. Marketing dollars are precious, and once they’re spent on fake leads (whether purchased or generated through your own digital advertising efforts), there’s nothing left to create new campaigns that could generate legitimate leads.

2. Skewing Your Data

Fake leads mean fake results. At first glance, a digital marketing campaign that generates numerous leads looks successful. However, if most or all of those leads are fake and don’t result in conversions, the data from the campaign is useless. You don’t know if your ads reached the target audience or who your best prospects are for future targeting.

3. Wasting Time, Killing Morale

Contacting leads is costly and time-consuming, especially when your contact center and sales reps are wasting time reaching out to fake leads or trying to call someone who doesn’t even exist. Their repeated calls go unanswered—or perhaps worse, they are answered by someone who isn’t expecting and probably doesn’t want to hear from your company. Fake leads that only lead to frustration can cause your team to lose confidence in the information they’re receiving and negatively affect how they reach out to legitimate leads. What’s more, repeatedly dealing with fake leads can cause a high turnover rate.

4. Ruining Your Reputation

A company’s reputation era should last forever, but it can quickly come to an end if you’re making lots of unwanted calls that stem from fake leads. Brands may have the most to lose, but fake leads can affect the reputation of lead generators and publishers if they do nothing to stop the fraudsters. Lead buyers and digital advertisers will lose confidence in the leads they’re getting and may never do business with these untrustworthy vendors again.

In many industries, reputation is everything. People want to know they are working with reputable businesses that they can trust. They do not want to be contacted by a company they don’t currently do business with or haven’t provided contact consent. If your company gains a reputation for doing this, you risk dealing with the ramifications of potential complaints and negative hits to your reputation. Long term, almost no company can survive with a bad reputation, and contacting multiple fake leads is a surefire way to cause irreparable damage.

5. Finding Yourself in Court

Real contact information can be easily obtained by scraping personal information sites or be stolen in a data breach. Then, bots or human fraud farms can enter it into your contact form or landing page. Since the person didn’t enter the information themselves, they also didn’t provide consent to be contacted by your company. In that instance, the best case scenario is they never answer the call from your contact center or sales representative. However, if they do answer the call, you have unwittingly committed a TCPA violation.

This is how companies end up paying for fake leads in so many ways. You’ve already wasted ad dollars and time. Now, you could face fines of $500 to $1,500 a pop every time you’ve unwittingly committed a TCPA violation. It doesn’t take too many unwanted calls to rack up significant costs in fines, let alone the court costs, attorney fees, and an even bigger hit to your reputation.

It may seem unfair that a company that has been a victim of fraud can face further financial loss. Still, in its ruling last month, the FCC took the “opportunity” to not only remind texters and callers that they must obtain express consent but that “fake leads,” including those with real contact information but also with fake consent, “do not satisfy the TCPA” or FCC rules.

How Can You Identify and Stop Fake Leads?

No response or angry responses from consumers often indicate you’re dealing with fake leads. But wouldn’t it be nice to not have to deal with them in the first place?

It is possible, and frankly imperative, to take a proactive approach to fighting fake leads so they never get to you and put your business in a precarious situation. The first step for brands, publishers, and lead generators is to identify, in real time, where your traffic is coming from and whether it is legitimate.

If that sounds overwhelming, know that you don’t have to do this alone. The right ad fraud solution will integrate seamlessly into your marketing tech deck to identify fake leads as well as their source. This means fake leads get stopped before they break through; it also means that you can redirect your marketing campaigns to those channels that only generate genuine qualified leads with the most potential to convert.

Based on our experience, we have found that approximately 25 percent of site traffic is fake. Anura is proud to be TAG Certified Against Fraud, which means we follow strict guidelines established by the Trustworthy Accountability Group (TAG) to fight fraudulent, invalid traffic before it turns into fake leads.

If you’re concerned about fake leads—and when you rely on lead generation, you definitely should be—contact us for a free 15-day trial. We can show you how much of your traffic is fake and where it comes from. Partnering with Anura today can set you up for lead generation success and help secure your TCPA compliance.

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