Lead generation has been in the spotlight recently and important questions are being asked about the role that online marketing firms play within the protection industry. There are key questions about the true privacy of customer data, trademarked insurer brand abuse and what liability buying leads places on insurance firms.
Caught between needing to secure a reliable volume of leads and wanting to ensure good customer outcomes, insurance intermediaries have very little way of being able to distinguish between innovate marketeers and fraudulent data resellers who exacerbate clawback. As the owner of a large intermediary told me last week, “all I really want to be able to do is tell the difference between the good guys and the bad guys”.
It’s not so much that regulation has failed to do its job but rather that the rules have been completely ignored, by everyone. After more than a decade in financial services marketing, I don’t know of a single regulated lead generation business that has ever been audited by the FCA; lead generation firms operate without fear that they’ll ever be pulled up. An easy win would be the FCA to set aside time and resource to audit all of the firms that are actively producing insurance leads.
Online lead generation is already regulated with a number of different bodies and clear rules about what affiliates can and can’t do already exist. With an increased press interest in this area of performance marketing it’s likely that the respective regulators will begin to remember the rules that themselves have made.
This is how I believe lead generators and insurance intermediaries can stay on the right side of already existing rules:
A shared responsibility
‘The ASA has ruled that both the business and the affiliate marketer are responsible under the Code notwithstanding the fact that the ads may have been created solely by the affiliate rather than by the business themselves’ (Online Affiliate Marketing – ASA | CAP)
Many Life insurance firms that buy leads have no idea that in the eyes of the advertising standards regulator, they are jointly liable for adverts that a lead generation partner runs. If a consumer complains about an advert, both the affiliate and the advertiser (the lead buyer) will be named and investigated and there have been a number of these type of rulings recently.
In exactly the same way that intermediaries can only sell life insurance policies with a level of FCA authorisation and scrutiny, lead generation affiliates should be vetted and approved with easily repeatable and standard due diligence processes. We need to make it easier for legitimate insurance firms who want to grow, to be able to know who to trust to buy leads from.
Protect the customer
‘Consent means giving people genuine choice and control over how you use their data. If the individual has no real choice, consent is not freely given and it will be invalid’. (What is valid consent? | ICO)
Competition is a welcome feature of a thriving protection industry; the consumer wins when insurers and their distributors compete to ensure value for money. However no consumer should ever receive a sales call for life insurance without having given their explicit permission.
There are lead generation firms active right now, selling ‘2nd and 3rd use data’ and are doing so in direct and clear contravention of the rules set out in the GDPR and both the lead generation firm and the regulated entity are at risk of a fine if a consumer pursues a complaint.
I believe that individual firms should use technology to ‘certificate’ and authenticate customer marketing enquiries so that the customer journey can be tracked, audited and improved. Crucially such a process would act as a financial promotion register in light of any future questions that might be asked of the lead generation process.
Understand and enforce the rules
‘You should form your own view as to whether the promotion complies with our financial promotion rules’. (Approving financial promotions | FCA.)
In recent years, lead generation firms that trick consumers into giving up their data have been on the rise and these businesses undercut legitimate lead generation firms. Because lead generations firms are able to sell their leads to directly authorised businesses without every revealing their marketing method, landing pages or advertising, fraud goes undetected
It’s time for all intermediary firms and insurers to get onto the front foot rather than just accepting that ‘this is how it’s always been’ and find lead generation partners willing to do things properly. An intermediary or an individual broker that buys leads should not work with a lead generation firm unless they themselves have a robust process for reviewing the exact adverts and landing pages that are going to be used to attract new customers.
If we are serious about good customer outcomes and the integrity of the insurance industry, we all have a responsibility to report fraud wherever we see it.
If you see such an advert online, enter your details into the corresponding form and find out where the lead is going. When you get a call back, ask to speak to the businesses relevant FCA control function and let them know they are buying leads from a disreputable lead generator and that they themselves are at risk.
We will be discussing the topic of lead generation and more within our virtual protection forum tomorrow. If you would like to hear the views of Alain and other advisers, please feel free to sign up below.