Unpacking the Real-World Effects of The FCC's Recent TCPA Ruling on Express Consent and Lead Generation

We aim to highlight the importance of due diligence in lead campaigns and to keep our customers and industry associates up-to-date with the compliance news reported for our industry.

The following article repost from TCPA World is reprinted here for our readers, courtesy of our legal partners Troutman Amin LLP.  The rulings will be addressed at the FCC's Dec 13 Open Meeting. Convoso will be sharing ways in which our industry is adapting to any new rulings. As always, we recommend consent-based marketing and lead generation as a best practice.

by Eric Troutman

So TCPAWorld.com broke the news last week that the FCC was moving forward with an order that will drastically alter the lead generation industry.

For many this came as a complete shock. For those that follow TCPAWorld, however, this was a highly anticipated–although undesirable outcome.

Smart businesses, of course, already heeded the warning that “Winter is Coming” and were ready for this.

But everyone needs for information right now–I have dozens of emails with questions already–and the Czar only has time to meet with clients on this right now (sorry non-client friends!) so here is my effort to answer everyone’s questions at once.

Three things:

1. It extends DNC protections to text messages (no big deal).

2. It re-defines prior express written consent to mean an agreement that “authorizes no more than one identified seller” to contact a consumer. Importantly the word “seller” means the company providing goods or services to a consumer–not a lead seller.

3. It requires that calls must be “logically and topically associated with the interaction that prompted the consent…”

The term “seller” in this provision means “the person or entity on whose behalf a telephone call or message is initiated for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person.”

Courts looking at this provision have consistently interpreted it to refer to the ultimate lead buyer–i.e. the brand that is providing the good or service to the customer. It does NOT mean the lead seller.

So, for instance, consent could not be obtained to allow Lead Generator X to call the consumer where Lead Generator X would then ask the consumer if they are interested in hearing from Brand A, B, or C and then transfer.

Instead consent for Brand A, B, and C would need to be individually selected by the consumer.

No one knows for sure. This is new language.

The FCC’s original proposal looked at consent being logically and topically related to the “website” where consent was generated but this language is a little more specific and tied to the “interaction.”

We can expect a lot of litigation around this provision so TREAD carefully. Lots of room for interpretation here. Happy to answer questions on this for the firm’s CLIENTs. Can’t field questions for the whole industry on this one–but will provide tips and pointers at the Summit and LGW!

How will this ruling Impact Ping Post?

Ping post is dead. As are almost all brokers. Sorry. I tried.

How will this ruling Impact Multi-Vertical Leads?

Multi-vertical leads are dead. Warned you.

How will this ruling Impact Co-Reg Leads?

Co-reg is dead. Warned you.

How will this impact aged leads?

Aged leads are dead. Good.

How will this impact sweepstakes sites?

Dead. And good riddance.

How will this impact Aggregators/Networks?

At first I thought aggregators were totally dead, but that’s not necessarily so.

Publishers will need to obtain single consents for brands. They may not have relationships with those brands, however. So there is still a tiny bit of room for aggregators and networks who do have those relationships to facilitate transfers.

I suspect this means networks now need to supply the names of all lead buyers to publishers and for the publishers to determine which brand their audience would be most likely to connect with. But this will take a lot of fine tuning.

While there will be incentives to sell the same consent to the same brand multiple times I expect the lead buyers to be onto this pretty quick.

How will this impact publishers/affiliates?

Ummm, massively.

The good old days are officially over–or they will be very soon.

Publishers can no longer use massive partner pages and then sell a lead into a network and expect to get paid.

Now publishers MUST gain a consumer’s consent for a single company at a time. I would expect they will look to networks for guidance in terms of who, specifically, they have relationships with. Will have to wait and see how this plays out.

How will this impact lead buyers?

Lots of ways.

First, the little guy can expect there to be no leads at all. Since webforms now must SPECIFICALLY obtain consent for your company very few will include YOUR name on the website. You’re just too small to matter in this ecosystem. So you’re invisible to consumers. Sorry small businesses, you are out of business–or at least out of leads. Blame the NCLC.

Middle tier buyers might still have a market for leads but you can expect to pay MUCH MUCH more. At least in the beginning. Over time efficiency will likely return to the digital lead market–and this is a very innovative bunch so it may happen quickly–but no doubt a spike in cost and drop in supply will be the first wave to hit.

Large brands may not see much drop off here–especially those brands that supplement with national advertising campaigns. Consumers may be eager to hear from brands they know in unfamiliar verticals. So–as usual–the big boys seem set to win here. That being said brands will now need to work with multiple networks to obtain enough leads. And that means there will now be tremendous pressure to sell to these brands and we can expect FRAUDULENT leads and MULTIPLE SALES of the same lead to the brand through multiple lead sources. So… more bad news.

Tough to say but I expect it to go through the roof.

Obtaining real consent on a one to one basis for small companies will now be virtually impossible. The market for lead purchase is going to shrink. And desperation is going to set in.

Many companies will just go out of business–like tens of thousands–but some will try to stay in business and simply commit fraud (i.e. invent consumer interactions on webforms.)

Lead buyers need to be extremely cautious here. Hopefully all will adopt the R.E.A.C.H. standards–which will need to be modified shortly–and require FRAUD DETECTION on all purchased leads.

How Will this Impact Third-Party Witness Technology?

Just as important as always.

When I was at LeadsCon last year I predicted more than half the companies present would soon be out of business.

Turns out it will be more like 80%.

We will all need to wait and see what happens here but I see a massive shift on the horizon. With all data brokers and aged lead sellers out of the market, co-reg and multiple vertical leads wiped out, and lead buyers concerned about fraud and non-compliance exiting the market there will be devastating impact here.

But there is one BIG piece of good news that may save a good portion of the industry–and is very good news for companies like Safe Select.

Not talking about that just yet.

How Could this Happen?

It happened because very few companies engaged when the FCC asked for comment on these issues. I tried. But folks just didn’t listen.

R.E.A.C.H. was the only association actively advocating for industry here, and there were just too many forces acting against it for it to win all by itself.

In the end, industry sat quietly and it will pay the price.

But I Was Told This Ruling Would Be No Big Deal?

You were misinformed.

If your lawyer told you this, you should consider new counsel. If your trade organization told you this, you should consider joining R.E.A.C.H.

It will be finalized December 13, 2023. Then it will need to undergo a paperwork reduction act review–should be interesting–and then be published in the federal registrar. This will likely happen sometime in January or February, 2024. TCPAWorld.com will advise as soon as it does.

The ruling will then be effective six months later–so as early as July and as late as October, 2024. Again, we will keep everyone in the know.

Is there Any Good News Here?

Yes. Two pieces of good news.

First, it could have been worse. The FCC considered banning lead generation altogether. While this order comes close, it does still leave a little bit of life for some. (I know that is cold comfort for companies who will need to shut down as a result of this ruling.)

Second, there is a BIG BIG BIG BIG BIG loophole here. But I am not discussing it publicly until after the ruling is finalized and accepted.

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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.