FTC Cracks Down on Lead Generation

The Federal Trade Commission (FTC) continues to crack down on consumer protection violations, now focusing specifically on companies generating or purchasing consumer data gathered without consent. The FTC has entered into a Stipulated Order with several for-profit education companies, with the Order providing a road map for compliance for both the lead generators and sellers.

Regulating Lead Generation

The FTC stated that the “proposed settlement has a lot to say to businesses in the lead generation ecosystem. The FTC has brought numerous actions challenging the conduct of companies that extract personal information from consumers under false pretenses and then sell that data as leads. [This] settlement focuses on businesses that use those leads. The case illustrates the importance of monitoring what others – including lead generators – are doing on your behalf and the need to respond forcefully in the face of misleading claims or conduct. Advertisers should take the lead in ensuring the leads they use weren’t the product of deception.”

The Order is the latest enforcement effort targeting robocalls to consumers. The FTC maintains that lead generation forms must make it clear to consumers what they are consenting to, and with whom that consent is being shared with. Specifically, “a required disclosure is difficult to miss (i.e., easily noticeable) and easily understandable by ordinary consumers,” and it should be unavoidable, easily readable, in a font and font size (at least 10 pt.) that is easily readable and equal to or larger than surrounding text, placed above a “submit” button, and optimized for both web and mobile viewing.

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