How to Prepare for Potential Rulings on Third-Party Leads: Experts Talk FCC Changes and Ways to Pivot 

When the FCC announced a series of potential changes to rules governing third-party lead generation in February of this year, it was called “world-changing,” “can’t miss news,” “daunting,” and many other things.

Fast forward to today, though, and the sales and marketing industry is still waiting with bated breath to hear how the FCC might ultimately rule on these changes.

With a range of possible scenarios looming on the horizon, we wanted to help businesses understand just what the FCC is considering, when and how it might affect lead generation practices and, most importantly, what businesses can do to adapt and excel in spite of any changes.

So, during a recent webinar, Convoso CMO Lisa Leight sat down with Eric J. Troutman, Czar of TCPAWorld and Founding Partner of Troutman Amin LLP, and Travis Prouty, CEO of The Call Gurus, to get their thoughts on both the latest developments and how businesses can best respond.

Watch the full recording of the webinar here, or read up on the highlights from this insightful conversation below.

Under the current law, most organizations tend to assume they can buy a lead from a third party that has their name on the disclosure and then make an outbound call to that lead. Similarly, the prevailing position is that they can also purchase a warm transfer from a third party who has called a lead and qualified them with their company’s name on the disclosure.

“That might be changing,” says Troutman. For starters, the FTC has already ruled that you cannot purchase a third-party lead if you’re going to use a pre-recorded call to contact. This, according to the FTC’s ruling, would be a violation of the Telephone Sales Rule (TSR).

It’s not just prerecorded calls to third-party leads that are at risk of going away. Over the course of this year, regulators have taken aim at a so-called “Lead Gen Loophole,” which they say allows companies to acquire third-party leads who aren’t aware they have consented to receive calls from long lists of businesses.

The FCC, which enforces not just the TSR but also the Telephone Consumer Protection Act (TCPA), is leading these efforts. As part of a Notice of Proposed Rulemaking (NPRM), the FCC is considering a change to rules that would prohibit the use of any automated system—be it an autodialer, IVR, or a prerecorded call—to call third-party leads.

The FCC is also considering outlawing calls made to numbers on the National Do Not Call (DNC) list if that call is made on the basis of a purchased lead. And that includes manual calls, not only those that use automation.

In effect, these changes would, for many businesses, put an end to the practice of purchasing and calling third-party leads.

This doomsday scenario for dialing third-party leads is just one possibility, however. Troutman says that one possibility is that third-party leads can be purchased on a 1:1 basis. In this case, a lead buyer would need to be the only name on the lead form.

Another possibility is that the FCC places a less stringent limit on the number of parties that can be included on a lead form—say, five or ten.

At a minimum, Troutman thinks, the FCC will likely move to end the practice of multi-vertical lead buying:

“We believe that multi-vertical leads are dead, and the Commission is going to require that the website the consumer is actually visiting is tied directly to the good or service that the consumer is going to receive information from, so that the lead and the website have to align.”

- Eric Troutman

This would effectively put an end to things like sweepstakes and co-reg sites, as well as outbound sales practices that Prouty says amount to harassment:

“Calling a lead that is not expecting you to call, [the FCC is] probably going to end that…People are throwing [leads sold many times over] into cheap systems to make cheap calls, to harass people, until that 1 percent or half of a percent say ‘yes.’ That’s dead. If that’s your business model, we don’t want you in the space. You’re making it harder for everybody else.”

- Eric Troutman

Companies that are buying leads right now need to be thinking about finding alternative sources. And, according to both panelists, this likely means investing heavily in campaigns that generate significant traffic and first-party leads.

“I really believe that the future is in drive-to-site [campaigns], with major brands having to essentially harvest, develop, and nurture their own leads on their own websites,” says Troutman.

The issue, as the panel discussed, is that quickly switching to this approach might leave some organizations struggling to manage the increase in demand themselves.

“If you’re a smaller company, though, you need to be thinking about the fact that third-party lead buying may dry up. And it may dry up very, very quickly…Everything has to be in your own name, so you have to think about either scaling your call center or working with BPOs.”

- Eric Troutman

If you’re a brand that invests in pushing traffic to your site, it can be hard to scale the labor at the level required to manage and make the most of all that traffic.

Imagine; If you suddenly got thousands or millions more form fills next week, would you have the bandwidth to manage them?

This is where BPOs come in.

According to Prouty, his organization, The Call Gurus, which won “Call Center of the Year” at last month’s Affy Awards, can scale up an outbound dialing operation for enterprises in just 2 to 4 weeks.

But it’s not only outbound calls that BPOs like theirs can handle. As brands look to pivot away from third-party leads, inbound calls may become more central to many sales operations. Again, however, the issue becomes a matter of managing an increase in traffic on such short notice.

This is another area where BPOs can play an important role, helping brands navigate the transition to a new, compliant approach in a post–third-party lead landscape. Prouty says that acting as a white-label team, experts like those at The Call Gurus can help triage inbound call traffic, qualifying leads and transferring high-intent prospects to in-house teams—or working to close the sales themselves.

Working with industry group REACH, or Responsible Enterprises Against Consumer Harassment, Troutman believes they’ve really struck paydirt with getting the FCC to understand in recent months just how big the impact these potential changes would have on the established lead generation industry.

As a result, there’s a possibility that the FCC ultimately decides to delay any ruling further and instead take more time to consider the issues at stake. Adding to this possibility is the FCC’s growing focus and concern with the topic of net neutrality, which is set to occupy a significant amount of the Commission’s resources.

Troutman estimates that there’s a 60 to 70 percent chance that a ruling will be made before the end of this year, but does not rule out a scenario where the FCC pushes a decision on third-party leads until as late as the end of next year.

In any event, organizations should begin to prepare today for a new environment—one potentially without plentiful third-party leads. By getting out ahead of any pending changes and turning to the right strategies (and partners), teams will be positioned to thrive no matter what’s coming down the pike.

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DISCLAIMER: The information on this page and related links is provided for general education purposes only and is not legal advice. Convoso does not guarantee the accuracy or appropriateness of this information to your situation. You are solely responsible for using Convoso’s services in a legally compliant way and should consult your legal counsel for compliance advice. Any quotes are solely the views of the quoted person and do not necessarily reflect the views or opinions of Convoso.