U.S. Public Interest Group and Center for Digital Democracy Urge FTC to Protect Consumers from Unfair Lead Generation Practices in Comments filed for Oct. workshop

By: Jeff Chester | Sep 19 2015
Groups call for safeguards on "lead gen" rules exploiting financially vulnerable consumers, inc. for loans & credit. Role of both Google & Facebook raised for forthcoming FTC workshop.

The FTC requested that comments for the upcoming October 30, 2015 workshop on lead generation be submitted by September 20th so that issues could be addressed during the sessions.  USPIRG and CDD submitted initial comments, which are attached below and also summarized.  One of our findings from a recent analysis of the online "lead gen" marketplace was that digital industry leaders--including Google and Facebook--engage and support online lead generation in ways that raise substantive consumer protection concerns.  USPIRG and CDD have been working for the last several years to encourage policymakers to rein-in lead generatio activities, especially those that play a role promoting financial products that can be expensive and harmful to consumers.  We have written background papers on lead generation and payday loans, its use by for-profit colleges, and how Hispanics are targeted, for example.

At its workshop, follow-up report and thru new enforcement activities, the FTC needs to analyze and address how contemporary online lead generation embodies a panoply of applications and tactics to acquire, use, and often share or sell a person’s personal data. Lead generation is no longer the simple process of encouraging a consumer to fill out an online form. Today, online “lead gen,” as it is called, incorporates the use of YouTube, Facebook, Twitter, search engines, mobile phones, apps, geo-location, native advertising, email, sentiment mining, data-driven audience buying (programmatic), user “scoring” methods, attribution analysis for measurement, and a network of data brokers providing instantaneous identity and other sensitive information.

The commission, in its workshop, report, and follow-up activity, should focus on the leaders of the digital data marketing industry—starting with Facebook and Google but including many others—and its use of lead generation. While there are likely many “bad” lead generator actors, as the commission’s enforcement actions have already identified, we believe that the most significant threats to consumers overall arise from the growing and now endemic use of powerful, non-transparent lead-generation techniques, especially for financial products, by the leading companies in the marketplace. Unless it is subjected to some floor of enforceable consumer protection—including but not limited to transparency and real consumer choices to avoid it—lead generation will become—if it has not already—a patently unfair system of consumer manipulation and control.

Few consumers know that when they are encouraged to provide data about themselves—when they seek a home, college or auto loan, for example—that the supposedly informational website promising attractive rates and up-to-date information is really in the business on capturing their personal information to be used or sold as a lead. Online lead-generation techniques are integrated into the digital medium, with many interconnected applications fostering ongoing data collection for lead-related profiling and targeted services (e.g., search, social media, financial digital marketing). The commission should note that the leading business segments for online marketing revenues and expenditures—retail, financial services, and the automotive sectors—significantly use online lead-generation tactics. So do the leaders in the digital media business—including Google, Facebook, and Twitter, for example. The commission, in its workshop, report and follow-up activity, should focus on the leaders of the digital data marketing industry and their use of lead generation

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