REVIEW
PROTECTION
When is a mortgage calculator not a mortgage calculator Kevin Carr MD, Carr Consulting & Communications
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ast month, the Advertising Standards Authority (ASA) launched its annual report in which it made it clear that it intends to rebalance its regulation “to be more proactive” and aims to use technology and AI to better regulate advertising at scale. One of the areas this will affect significantly is lead generation. When done right, lead generation is undeniably beneficial for sellers, buyers, and the end customer alike. But, sadly, far too many firms are still not using customer data properly. While the more obvious misuses of customer data are often easy to identify – false claims within advertising, reselling of customer data, etc – one technique that is becoming more and more common (and is an area in which the ASA is becoming particularly interested) is where firms appear to be offering a useful service – i.e., an online comparison, or calculator – but are in fact providing an introduction. While the customer in this situation is almost certainly unaware that they have become a lead, the buyer of the lead also often claims innocence, saying they had no idea how that lead had been generated. In its Consumer Duty paper, the FCA is cracking down on these “Oh I didn’t know what my lead gens were doing” or “They told us they were doing things compliantly” excuses and putting the onus on the lead buyer to do its due diligence and keep documented proof of how they work www.mortgageintroducer.com
with third-party lead-gen companies. This – combined with the fact the ASA is going to be relying less on consumers reporting they’ve been tricked, and more on stopping those practices in the first place – has created a significant shift in liability. “We have long been pushing for more transparency in the customer journey, and the ASA’s renewed focus on proactive regulation at scale combined with the FCA’s Consumer Duty paper is certainly welcome news for us and others working hard to clean up lead gen,” said Alain Desmier, founder of Contact State, a firm that certifies leads for buyers. “The FCA is basically saying lead buyers are responsible for the advertising that generated the lead, even if they are paying a third party. And that if they buy leads where the consumer has been tricked, via a tool online, both they and the lead seller are in breach of the spirit and detail of the consumer principle behind the consumer duty.” Ultimately, for the financial services industry to clean up lead gen – and meet ASA and FCA requirements – they need to keep to one simple mantra: consent is king. When it comes to mortgage leadgen, buyers need to be sure they understand the customer journey before that customer is contacted. With these new rules, a lead generator using tools like calculators to generate leads will have to specifically declare they are a lead generator via a very clear disclaimer, because ultimately, every consumer has the right to know what they are consenting to, who they have shared their data with, and what is going to happen next. Desmier warns, “Lead generators need to rethink any tools and calculators they are providing, as
they will now come under renewed scrutiny, while lead buyers need to be aware that they, too, can be held accountable for their lead generators’ practices.” There is clearly no easy fix in stamping out bad lead-gen practices, and those who abuse the system will continue to find new loopholes, but as the ASA, FCA, and other regulatory bodies crack down on fraudulent practices, it should encourage more firms to invest in creating a better standard of financial services lead generation, and put a stop to consumers ending up in a financial conversation they weren’t expecting. NEWS ROUND-UP
• British Friendly has launched levelguaranteed premiums on its short- and long-term income protection product Protect as a new, second premium option in addition to its existing agecosted guaranteed premiums. • CIExpert has appointed Paul Roberts as its new propositions and distribution director. • Lloyds Banking Group has agreed a deal to buy protection distributor Cavendish Online for £12 million. • A former investment banker has been sentenced following a fraudulent cancer claim on a life insurance critical illness policy and an investment scam totalling nearly £2 million. • LV= paid out £5.4 million on individual income protection claims during the first four months of the year, the provider has detailed. • Insurance technology provider iPipeline has released the latest update to its product features report service, allowing advisers to review quotes and product quality more efficiently regardless of product combination or complexity. M I JULY 2022 MORTGAGE INTRODUCER
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