For many, the flow of protection leads will provide a steady source of potential new clients and when done well, a good income with lasting relationships. As with most things, there are good and bad lead generation firms and whilst transparent and GDPR compliant generation firms will have a positive impact, those that mislead customers in their marketing will have the complete opposite effect.
Detailed due diligence of the processes potential lead generation partners follow and the reporting of those carrying out fraudulent activities will certainly help, but should the regulator be doing more to step in?
In our June forum we had a fantastic discussion about exactly these points. Alain Desmier from Contact State shared his vast experience on the do’s and don’ts with regard to lead generation and the regulations already in place. Ian Sawyer, Harvey Kambo, Emma Astley and Alan Knowles also shared their experiences and the impacts that rogue firms are having on the industry.
Below are some of the best insights and observations from experts in the protections industry about lead generation and the responsibilites that come with it.
Key Industry Influencers Views on Lead Generation
The ASA, FCA, and ICO are the main tenants of lead generation regulation. While the ASA is becoming more aggressive in holding the buyer of leads accountable for how those leads were obtained, the FCA has regulations but is not auditing firms to enforce it. The ICO is enforcing the GDPR, and soon the trend in America of consumers bringing legal challenges against firms who contacted them without consent will begin to grow in the UK as well.
And you will be able to see them if you type ‘life insurance’ into Google or go onto the Daily Mail and read any of the adverts that you see there. There are three main tenants of lead generation regulation that exist right now. The Advertising Standards Agency have been quite specific about how they view the use of lead generation. Their view is that the buyer of the lead, the advertiser, is as responsible for the advert being put out as the lead generator themselves. The ASA have become a lot more aggressive lately in pointing the finger at buyers of leads, and two or three specific rulings recently really show that.
And so I think from an awareness point of view for life insurance firms, there’s a real need to have a view on what your lead generator is doing, because if they’re doing something fraudulent or misleading, or someone within your firm is doing something fraudulent or misleading, the actual overall company is as liable for that advert as the external lead generator.
The second tenant is the FCA themselves. The FCA are very clear that if you are including marketing for a regulated product, that advert needs to have been approved and reviewed by someone.
I ran the first ever directly authorized FCA lead generation agency, and every month we would work with a compliance firm to fulfill an advertising register. And every six months, we would submit this register to buy the reamer process. And after doing it for a few years, we realized that we were quite literally the only mugs that were doing it.
And so what I would say to all of you who have an interaction with the FCA, either through paying fees or through any direct conversations, is that the industry itself needs to put pressure on the FCA to go and audit lead generation firms who are directly authorized or who are ARs. To my knowledge, there’s not been a single audit of a lead generation firm who also is directly authorized. And I think that’s crazy. The regulation is there. We should be using it.
The third regulatory body is probably the most explosive in terms of what this might mean for the protection industry. It’s the ICO who are enforcing the GDPR. And I think there are some clear moves being made by the ICO about how consumers consent to being contacted. America’s regulation of TCPA already has 3000 live legal challenges from consumers saying, “I did not consent to be contacted. Why are you contacting me?” I think that’s a trend we’ll see in this country very, very shortly.
For those of you that have worked leads or have or simply buy leads, you’ll know that the conversation you quite often have with consumers is, “I don’t know how you’ve got my details. I didn’t, I didn’t agree to be contacted.” I think in the past, life insurance firms have simply brushed those aside as simply one of those things that happens with direct marketing. It’s my view that increasingly firms will have to prove that they have the proper consent to contact consumers. And I think that’s something that we’re going to see increasingly.
There is a lot of rogue unregulated lead generation activity, and its massively driving up costs. This isn’t happening the same way in other markets because their premiums and commissions models are different.
I think there’s two aspects to this. There’s lots of rogue activity out there in terms of, I’ve just literally had an email from one of my teams saying, “one of our clients just had a call about their AIG policy and it wasn’t us and it wasn’t an AIG”. So there’s that type of activity. Unregulated lead gen for me is a cancerous blight on our industry. And it’s driving up costs massively. They’re not contributing to FCA fees or contributing into FSCS. They’re not getting taken to dealing with ombedsman. And yet it is perfectly acceptable for any firm to just go and buy a lead from any source or get data from anywhere that they like.
GDPR is a joke in this regard. So, again, to put some weight behind what Alain is saying in terms of: what do we need to create a class of business? Where are there are leads? Which are justified bonafide and certified? And then there’s the rest. And we have to change the pricing mechanism for both of those. Of course, the unsaid thing in this topic is the fact of, what is the root cause of this? And sadly, the root cause of this is, this doesn’t happen in GI markets. It doesn’t happen in car insurance and home insurance. They have average higher premiums than a life insurance or health insurance does. And they don’t have those issues. That’s because they don’t have front that they did indemnity commissions and it only exists in life insurance because we got this ridiculous commission model.
Pop-up ads for insurance on websites sow a lot of mistrust in consumers about the viability of the product and the value of protection.
I think that when we sort of put our consumer hats on, and when we sort of look at it from the consumer angle rather than from the adviser seat, I think very often we can kind of see where the mistrust comes from. If I can see ads popping up for life insurance in my Instagram timeline, or popups on the screen when I’m doing other kinds of shopping, is that a product I really think is a viable product? Is it something that, people want to purchase? You know, because when people want to purchase something, it generally is not sold in that way. So I think there’s definitely a lot to be done to stop the popups, to stop the things that undermine the value of protection to consumers on the front line.
Some Appointed Representatives/ Companies are not carrying out any due diligence or checks. They’re just being told that “we can get you some leads started today”.
Yeah, of course. This subject is something that’s frustrated me for many years before I started Cover My Bubble. I used to be an AR manager and manager for 17 companies up and down the country. And one thing that I fought against to protect the DA from was rogue lead gen companies. Some AR’s/Companies aren’t doing any due diligence nor checks. They’re just being told that we can get you some leads started today. We’ll get them coming in. And that’s the issue: they’re not doing due diligence and checks on these companies. And they’re not even regulated most from overseas as well. But this, this topic I could talk about all day, just because it is so scary on how it can affect the providers, but mostly the clients that are being affected and sold on and sold on and told wrong information, misled, offering PPI, vouchers, and it just keeps spiralling down. It’s just not acceptable and something needs to be done about it. The is now a whole new meaning for vulnerable clients. Anyone is vulnerable now when they are being mislead by these bad companies.
Firms have been reported yet remain live, so is reporting firms actually helping to solve the problem?
Just an interesting one on the FCA side of things, because I think that reporting these firms– absolutely. But actually is this a focus of the FCA, is anything actually going to happen with these? And I use an example where a lot of different intermediaries and some insurers reported a firm, which is live at the moment, non-regulated offering, a life insurance policy, unregulated, bizarrely. They were too new to be FCA authorized. They’re offering to get all your money back after you’ve paid into it for ten years, which is a disaster waiting to happen. It’s still live two or three months later. So I guess the worry from my point is yes, we can all report and we can all do this, which we absolutely should, but is that actually going to solve the problem?
We need to separate lead generation firms who are bad from the many who are doing good work and helping consumers get the protection they need.
I want to leave on a slightly more positive note in that there are plenty of legitimate lead generation firms who understand insurance, understand the nuances of what what’s being sold and have invested time and effort into the customer journeys. I think if I could leave you all with a message it’s that one thing that we really, really need to do is be able to differentiate between the good players and the players who are short term, overseas, reselling data. And I thin, there’s a danger here where we simply, throw everything out and cut off all of the marketing that we’ve got for our industry, which results in consumers not being protected. I think that what I’d urge you all to think about, and what we’re trying to achieve here, is let’s separate the good from the bad and set the proper regulations so that those firms can flourish and work with good legitimate life insurance firms.
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