Recently, Andrew Smith, director of the Federal Trade Commission’s Bureau of Consumer Protection, stated in the American Bar Association’s Antitrust magazine that one of its priorities would be to “combat bad practices in the lead generation market.” Smith suggested the FTC was concerned about the entire ecosystem’s bad practices and went further to indicate that the FTC would address the entire lead generation market—not just the lead generators; but also, the purchasers and end users of the leads. Additionally, the Consumer Financial Protection Bureau settled a lawsuit with a lead generator for bad and illegal practices. In that suit, CFPB v. D&D Marketing, the defendants were required to pay a stiff penalty and faced corporate and personal industry bans.

The digital age is transforming not only how consumers purchase financial goods and services, but the methods companies use to market their services and products. These include payday lending, credit cards, automobile loans, student loans, debt relief and mortgage lending. The dramatic shift from traditional media to the internet has several upsides for companies seeking to identify potential customers and convert interest into sales leads. It decreases expenses but also accelerates the speed to almost real time in identifying, targeting and converting potential customers to paid sales. This market speed causes significant competition for leads and, often, competition can mean cutting corners on compliance. For market players, it is important to understand the issues and their impact.

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