On October 30, 2015, the FTC hosted a lead generation workshop called “Follow the Lead” designed to clarify some of the complexities surrounding lead generation. Recently the FTC has issued a paper highlighting some of the workshop’s areas of interest and discussions. The FTC’s paper, referred to as “Staff Perspective,” includes highlights from the workshop, associated public comments and other information gathered through experts and law enforcement, focusing primarily on online lead generation and the benefits and concerns facing consumers and competition.
In the Staff Perspective, the process of online lead generation is outlined, identifying its various stages: lead collection by publisher or affiliate; lead transmittal to aggregator; lead sales to merchants; and lead verification by merchants. The online lead generation component of the paper also addresses payday lending lead generation and the “ping tree.” Due to the quick turnaround involved in payday lending, the workshop’s experts explained that lead generators are often tasked with collecting “detailed personal and financial information associated with each loan application, including the consumer’s employers, Social Security number, and financial account numbers.” The aggregators in the payday lending lead field use ping trees, described as “an automated, instantaneous, auction-style process,” to sell the leads to lenders. The ping tree is able to transmit consumer data to potential lenders in real time, until the lead is matched with a lender.
The second half of the Staff Perspective focused on the potential benefits and concerns facing consumers and competition due to lead generation. While the paper pointed out that lead generation is often able to quickly connect consumers with multiple merchants, it identified far more possible concerns. The Staff Perspective highlighted potential lead generation concerns, including: lack of transparency in the process; aggressive or deceptive marketing strategies; and potential misuse of sensitive information in the context of payday lending lead generation.
The FTC Staff Perspective is available at: https://www.ftc.gov/system/files/documents/reports/staff-perspective-follow-lead/staff_perspective_follow_the_lead_workshop.pdf.