Regulation of Lead Generation Industry Faces Uncertain Future

By aiwpadminJanuary 25, 2017

By John Egan.  

As President Trump settles into the White House, the regulatory future of the lead generation industry is up in the air.

Two federal watchdogs that under the Obama administration had put the lead generation industry under the microscope — the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) — are poised for significant changes under the Trump administration.


For starters, Trump faces the task of filling three of the five seats on the FTC and naming a new chairperson from among the five commissioners, meaning he essentially could reshape the FTC’s regulatory approach to his liking — including how the independent, bipartisan agency scrutinizes the lead generation industry.


The Hill, a publication covering the federal government, says: “It’s unclear what direction the FTC will head under Trump, as the [he] has surrounded himself with both free-market conservatives and economic populists.”


Adding to the cloudiness hanging over regulation of the lead generation industry are questions and concerns about the direction of the CFPB.


Two Republican U.S. senators — Mike Lee of Utah and Ben Sasse of Nebraska — recently called for the ouster of Richard Cordray, director of the CFPB. In a letter outlining their opposition to Cordray, Lee and Sasse say the CFPB director “has pursued costly regulatory policies that are radically opposed to the Trump Administration’s pro-growth agenda.”


Media reports cite former U.S. Rep. Randy Neugebauer, a Texas Republican, as Corday’s possible Trump-picked successor. When he was in Congress, Neugebauer filed legislation aimed at overhauling the CFPB and diluting its power, according to The Huffington Post.


Senate Democrats — including Charles Schumer of New York and Elizabeth Warren of Massachusetts — have warned they’ll fight any attempt to get rid of Cordray, an appointee of President Obama. “Under Richard Cordray, the CFPB is doing its job on behalf of the American people. The CFPB is working, and Cordray has been a successful leader of the agency,” Warren, who led the effort to set up the CFPB in 2010, said Jan. 17.


Given the potential firing of Cordray and the prospect of legislation designed to weaken the agency, American Banker, a publication covering the banking industry, says the outlook for the CFPB is “uncertain and precarious.”


Whatever happens to the FTC and the CFPB, the lead generation industry has said it stands ready to cooperate with consumer watchdogs.


In a July 2016 blog post, LeadsCouncil, an association for online lead generators, says it’s “committed to shouldering a greater burden of responsibility for ensuring that lead generators hold compliance and consumer protection standards equally at the top their business models through education, industry standards and self-regulation.”


LeadsCouncil has promised to help establish lead generation standards that are “well constructed and practical,” and to identify and address practices that don’t meet agreed-upon standards.


“Our hope is that, unlike prior cases where other industries came under targeted government scrutiny based more on misinformation and innuendo than a preponderance of evidence and fact, the FTC and other bodies will draw from the invaluable resources that only LeadsCouncil and other industry leaders can provide,” the July 2016 blog post says, “and take care to consider only substantiated data and information from reputable sources as the next steps are developed.”


In a report published in September 2016, when President Obama was still in office, FTC staffers signaled that the agency wanted to promote public knowledge about the lead generation industry, continue its dialogue with industry experts and stakeholders, and keep protecting consumers from “unlawful conduct” related to lead generation.

“Although online lead generation is very common in the modern marketplace, many companies and consumers lack an understanding of how it operates, and the types of benefits and concerns it presents,” the FTC report says.

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