Contact State managing director Alain Desmier says he launched the firm, in 2019, in a bid to stop fraudulent data practices and set a new standard in consumer data exchange. Below he sets out the questions firms that buy leads need to ask.

Lead generation, misleading financial advertising and the increasing scrutiny of online financial promotions are hot topics right now. Online ‘lead gen’ (the digital process of introducing a consumer sales prospect to a product provider or intermediary) is used throughout financial services to help firms of all sizes grow and thrive and its importance to the equity release industry is increasing. If your firm buys or generates equity release leads, taking the time to understand the rules now could save you time and money in the future.

Regulatory status of lead gen partners

Online lead generation firms that advertise regulated products (particularly those firms that use headline rates, product discount information and technical lending language) should be directly authorised or have their adverts approved by an authorised person. The FCA intends to make this opaque, grey area of advertising much clearer with the introduction of a ‘regulatory gateway’ and is consulting on this issue right now.

Question 1: If you buy equity release leads, are your lead partners directly authorised or do you approve each advert they run? If neither, why not?

Working with legitimate lead generation firms

There exists in the lead generation sector good firms, bad firms and fraudulent firms. Without any standard framework, industry standard or rating system to tell these businesses apart, marketeers that set out to cheat the consumer and by association equity release firms, are hard to identify.

As equity release online advertising becomes more prominent and lucrative, fraudulent lead generation businesses will increase their level of activity and use practices like double selling and brand impersonation to generate leads.

Question 2: What level of due diligence does your business carry out on lead generation firms? For example, do you routinely and comprehensively review their advertising? Do you review their financial accounts? Do you check to see whether they’ve ever been fined or censured by a regulatory body? Can you independently certify each lead you buy?  If not, why not?

An audit trail of data consent

The March 2020 ICO Direct Marketing code of practice, specifically mentions lead generation as an increasing area of interest for the ICO. Notably, the data regulator has fined four firms in the last three months with data breaches relating to lead generation activity. If you buy or generate customer data, the onus, legal and financial responsibility is on you (as the data buyer) to prove that you have the consumers specific permission to contact them.

Question 3: Many firms simply take it as given that their lead generation partners have followed data regulations and have no way to check. If you were audited tomorrow, could you prove to the data regulator that you store the explicit consumer permission for the leads you buy? If not, why not?

The equity release industry is rapidly professionalising and the sector has the chance to establish very clear rules for lead generation adverts to help protect members and consumers alike. Doing so now will help avoid some of the regulatory fines and negative headlines that financial sectors like funeral planning and life insurance have had to deal with in relation to fraudulent lead generation practices.

A simple solution and answer to all of the questions above is to only work with firms who independently certify their marketing activity, their customer processes and their regulatory approach. Firms that do this stand out as businesses with nothing to hide.

If you buy leads, setting a higher standard for your lead generation partners now,  will help your firm prepare for the increased regulatory burden that’s coming but also help you identify who the legitimate businesses are.

To learn more about Contact State visit www.contactstate.com

The views and opinions of contributors are not necessarily those of the Council.