Editor’s note: this version was updated at 6:00 pm pacific to include a couple of paragraphs that were omitted from the original post. Also–HI to all the thousands of regular people coming to visit today. I get it–we ALL hate unwanted calls and texts. But destroying the infrastructure of connecting consumers with businesses is NOT smart. We are ALL impacted by that. There’s a better way…
Going to be a bunch of long faces at LeadsCon this year. And a bunch of the Czar–who will be speaking with the FCC on stage there–telling everybody I told you so.
But that’s how it has to be.
But its also not too late to save the industry.
Stay with me.
Today the FCC issued a notice of proposed rulemaking that will absolutely upend the lead generation industry–and will cause a million other interesting (unforeseeable) consequences. You can read the entire thing here: FCC’s Latest World-Change Thing
Two pieces to this.
First, the FCC issued a Report and Order requiring carriers to block text messages that appear to be fraudulent and establishing a single point of contact. We’ll have a further breakdown of this issue shortly.
The big news, however, is a new Notice of Proposed Rulemaking. And it is an absolute killer for the lead generation industry.
Let’s go through it.
First, carriers will be required to “investigate and potentially block texts from a sender after they are on notice from the Commission that the sender is transmitting suspected illegal texts…” HUGE ramifications here. Will impact a ton of carriers and makes it really tough to run a business. Really big deal.
Second, since the FCC proposes to extend DNC protections to text messages. That is interesting since Plaintiff’s lawyers have been suing for text messages under the DNC provisions for years. “Although the Commission has stated that “text messages” are “calls” for TCPA purposes, it has never stated that text messages are subject to
DNC protections.” !!!!! So maybe these cases should all be dismissed?
In any event the Commission now proposes to formally extend the protections of the DNC to text messages. And the impact of this proposal on current text message DNC cases is fascinating.
Third, the real show stopper:
“We propose to ban the practice of obtaining a single consumer consent as grounds for delivering calls and text messages from multiple marketers on subjects beyond the scope of the original consent.”
*Insert dramatic chord here*
And let me put a finer point on it:
We also seek comment on Public Knowledge’s request that prior express consent to receive calls or texts must be made directly to one entity at a time.
Oh My God.
Actually I’m just feigning shock. Told you this was coming. Over and over again I told you this was coming.
And here it is.
But first, let me catch up those of you who have no idea why this matters.
In the lead gen world a consumer visits a website–say Lending Tree–and provides their contact information, inviting lenders to call and “compete” with various offers. These consumers are supposed to provide their express written consent on these forms. Then their information (a “lead”) is provided to a seller of the good or service the consumer wants, resulting in phone calls.
There are a number of problems with lead generation–sometimes consumers aren’t transparently told what is going to happen when they fill out the form and sometimes lead generators are just liars who make up interactions on the forms–which is why R.E.A.C.H., MBC was formed to set CRITICAL standards for lead sellers and keep lead buyers–often good companies hoping to connect with interested consumers–safe from fraud.
There’s another problem too– professional plaintiffs (and their lawyers) exploit the abuses in the industry and fill out forms by the barrelful to set up TCPA lawsuits. These days it is REALLY hard to tell the difference between lead fraud and litigator fraud until you are deep into a case.
Caught in the middle are the innocent companies trying to sell their legitimate products to interested consumers. They want no part of fraudulent leads or fraudulent lawsuits. They’re just trying to help someone buy a home or get car insurance.
I’ve been trying to clear up this industry for a couple of years now, recognizing that there is REAL value to consumers when things are done right. But there is REAL detriment when things are done wrong. And this is an industry that has COMPLETELY failed to effectively self-regulate in my opinion–which is why I created a trade organization to REALLY DO THE JOB.
Only the FCC is trying to beat me to it, and in a typically-clumsy governmental sort of way (no disrespect to the Commission–I love them and I know what they’re trying to do but industry CAN and MUST do better.)
Late last year I told EVERYBODY to pay attention to the Public Knowledge comment on the Assurance IQ petition. As I explained, PK was asking the FCC to shut down the lead generation industry by limiting the sale of consents obtained online. Really really big deal. Here’s the blog:
I went and talked to Mike Ferree about it. Here’s the webinar:
And I scrambled to create a trade organization to get industry participants in line BEFORE the regulators acted. Here’s proof:
And folks–I have a full time job, my own law practice, and over a hundred clients I am trying to protect at the same time.
But still the Czar is working overtime to protect this industry because I KNOW THESE PEOPLE. And I care about them. And I want to keep them safe and their businesses alive. At least the good players– the bad players can all go bankrupt or to jail.
So getting past my lengthy “I told you so” and to the point:
The FCC proposes to require that consent be considered granted only to callers logically and topically associated with the website that solicits consent and whose names are clearly disclosed on the same web page.
The FCC seeks comment on Public Knowledge’s request that prior express consent to receive calls or texts must be made directly to one entity at a time.
- Multi-vertical leads are dead (good riddance);
- Hyperlink marketing partner pages are in danger (really bad); and
- Lead generation may be killed completely by this order. (really really really bad.)
Notably, the R.E.A.C.H. standards already do away with most multi-vertical leads–we’re on top of it folks–and limit the number of partners listed on a partner page. But completely killing hyperlink disclosures is a bad idea (the Courts enforce them, and they are good for consumers in some instances that I can–and will–explain in R.E.A.C.H.’s FCC comment.)
And completely killing the lead generation business by finding that online forms cannot be transferred will mean the death of–literally–thousands of businesses. Hundreds of thousands of jobs lost. An entire industry destroyed. Plus CONSUMERS will undoubtedly suffer.
Consumers GAIN when they can google “mortgage” or “insurance” online and get TONS of information from helpful companies that can explain nuances, provide detailed information and otherwise keep the market for goods and services HYPER competitive. Plus our incredibly potent e-commerce platforms–the envy of the world–rely on the lead generation industry.
All of that being said, unwanted calls MUST STOP. And I respect the FCC’s further efforts to stop abusive marketing practices. Only, PLEASE let industry take the first swing at this–an aggressive swing for the fences swing–that will assure a little room to breathe for good actors that deliver real VALUE to consumers and the broader market.
I’m calling my shot here–REACH will stop 500MM unwanted calls a month, minimum, while still assuring a health lead generation ecosystem. This is the right answer–not shutting down the entire industry.
Mercifully the Commission leaves the door open to other alternatives and that’s where R.E.A.C.H. might just save the day:
- Are there alternatives to our proposal that would better protect consumers from the harms we have identified? More broadly, we seek comment on the extent of the problem, our proposed rule, and whether the proposed rule will clarify consent and help to eliminate unwanted and illegal text messages and calls. Are there different or additional limitations on multi-party consent we should consider?
I told you when I created R.E.A.C.H. I was doing it to help save the industry. Many of you answered my call and, as far as I cam concerned you are all heroes. When you see that “Founding Member” badge on a R.E.A.C.H. member’s website I hope you salute it because they are fighting for YOUR freedom to stay in business folks.
Obviously R.E.A.C.H. will be commenting here and providing a copy of its standards directly to the Commission in hopes that the FCC will confirm that companies abiding by its incredibly transparent and consumer-friendly rules may continue to operate.
Everybody else may be dust.
We’ll have more analysis on this critical NPRM soon. And for those of you who are ready to do the right thing and get to the SAFETY (relative) of R.E.A.C.H.–its not too late. Contact me or the Countess. thanks.
Editor’s Note: David Frankel personally sent this NPRM to me today. And it hurt.