“Follow the Lead” Recap: FTC Summarizes Takeaways from Workshop on Lead Generation

more+
less-

The FTC released last week a paper summarizing and reflecting on its October 30, 2015 public workshop, “Follow the Lead,” which we previously discussed here and focused on lead generation practices and related privacy and consumer protection issues.  The paper expands upon many of the same principles addressed at the workshop, including how lead generation works and what benefits and risks arise from lead generation.  Notable takeaways include the following:

  • What is lead generation?  The paper defines lead generation broadly as “the process of identifying and cultivating individual consumers who are potentially interested in purchasing a product or service.”  A lead may consist of only the consumer’s name and contact information, or may involve more detailed and potentially sensitive information such as Social Security or consumer account numbers.
  • How does lead generation work?  The common thread of lead generation involves the collection of consumer information, typically on a website operated by a publisher or an affiliate.  From there, any number of things can happen.  The publisher or affiliate may sell the lead to another publisher or affiliate, to an aggregator, or to a merchant.  The FTC provided the adjacent figure to show some possible flows of leads.
  • What are the potential benefits of lead generation?  The FTC acknowledged that lead generation, when practiced ethically and consistent with consumer protection principles, can efficiently connect consumers with merchants they are interested in and promote competition.  Staff also noted that the sale of consumer leads could have positive effects on price and competition, as found in a research study discussed at the workshop in the mortgage lending context.
  • What are the potential concerns of lead generation?  The report noted that the lead generation and lead selling process is often hidden from consumers, which can lead to consumers providing information without knowing how and by whom their information will be used.  The FTC recommended that companies collecting information clearly and conspicuously disclose how the personal information will be used to facilitate informed consumer choice about when and how to share personal information.  In other cases, even where information is appropriately collected, it may be subsequently sold for nefarious purposes or purposes not authorized by the initial collection.  Staff recommended that companies involved in the lead generation process take steps to ensure that consumer information is used for legal and authorized purposes throughout the life of the lead.

Staff also highlighted recent enforcement actions against lead generators for using leads for unauthorized and illegal purposes and signaled that it could take action against entities even if they aren’t directly responsible for the problematic practice.  As noted in the report, “[i]gnoring warning signs that third parties are violating the law and pleading ignorance will not shield companies from FTC actions.”  Entities involved with lead generation should take note and ensure that they have considered the full life cycle of a lead before using or selling it.

[View source.]


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Kelley Drye & Warren LLP | Attorney Advertising

Written by:

more+
less-

Kelley Drye & Warren LLP on:

JD Supra Readers' Choice 2016 Awards
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
×
Loading...
×
×