The FCC Impact on Lead Buyers and Sellers
FollowPart 1, What happened?
As most of you know, the Federal Communication Commission published the final rule changing the definition of consent in January 2024. The final version changed the deadline from 6 months to comply to 12 months. While an extra six months sounds pretty good, buyers and selllers alike are facing new challenges to comply.
So what happened? The rule includes two key elements which drastically change how lead generation has functioned.
- 1-1 consent requirement
- Topically/logically related requirement
https://public-inspection.federalregister.gov/2023-28832.pdf
(9) The term prior express written consent means an agreement, in writing, that bears the signature of the person called or texted that clearly and conspicuously authorizes no more than one identified seller to deliver or cause to be delivered to the person called or texted advertisements or telemarketing messages using an automatic telephone dialing system or an artificial or prerecorded voice.Calls and texts must be logically and topically associated with the interaction that prompted the consent and the agreement must identify the telephone number to which the signatory authorizes such advertisements or telemarketing messages to be delivered.
(i) The written agreement shall include a clear and conspicuous disclosure informing the person signing that:
(A) By executing the agreement, such person authorizes the seller to deliver or cause to be delivered to the signatory telemarketing calls or texts using an automatic telephone dialing system or an artificial or prerecorded voice; …
For anyone reading this for the first time, the FCC uses the term seller which our industry would normally refer to as the buyer. It is the seller of the product or service.
1-1 Consent
This is the biggest operational challenge. Everything from revising contract terms to completing overhauling lead delivery is needed to comply with this portion of the rule. This is where time is not on some buyers’ side. If a business has a longer lead conversion period, they really need leads to be compliant with this rule now so they can keep working them after the deadline. I will publish another blog to talk more about how sellers are building systems for 1-1 consent.
In my discussions with the FCC, the staffers were open to discussing how this would negatively impact small businesses but were already convinced it was the only solution to protect consumers. Getting any concessions was going to be near impossible. Thankfully, there were a few staffers who I believe were open enough to weigh the unintended consequences and were key in getting the additional comment period for small businesses to comment.
Most notably, staffers were under the impression small businesses would not have to follow the rule because they would simply manually dial. The problem is those small businesses may never get the lead to dial. Lead sellers needing to protect themselves in the funnel would want to gain consent regardless of who is buying. Small businesses may not be able to compete to be the one gaining the consent; driving up costs and decreasing revenue.
If you do fall under the rule in your communication, another key element is the need to physically own the consent prior to calling or texting. In the past, most lead buyers expected the lead sellers to gain the consent and hold on to it in case they needed it to prove consent. The rule now specifies the buyer of the lead must physically have the consent at the time of the call/text.
Topically/Logically Related
The topically/logically related requirement is going to have the most positive impact on consumers and buyers. Some industries have been pushing this direction for years. As a content monitor, we see a lot of bait and switch tactics in leadgen. While this will inevitably reduce the reselling of leads, at least without risks, it should result in a better consumer experience.
The effective date for the rule is January 27, 2025. Important to note, since the publication of the rule, the FCC has officially deemed AI as pre-recorded voice which falls under the rule.
Takeaways
- Know your vendors/buyers.
- Identify your dialing and texting technology risks.
- Be clear and conspicuous with your disclosures.
We will provide additional information on this topic as the year unfolds.
Now Read Part 2: How is the industry responding?
The information on this page, and related links, is provided for general education purposes only and is not legal advice.
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