Lead Generation Industry to be Turned Upside Down: Proposed FCC Rule Requires Consent Must be Secured From a Single Seller at a Time

One of the key issues relating to the NPRM pertains to consent being sent directly to/obtained by one seller at a time.

The FCC has now circulated its proposed rule.  It has not been adopted yet but it looks like it will be in December when voted upon.  It looks like the rule will become effective in or around August or September of 2024.

In pertinent part, the FCC ruling would require terminating mobile wireless providers to block all texts from a particular number when notified by the FCC of illegal texts from that number; codify that the National Do-Not-Call Registry’s protections extend to text messages; and close the lead generator loophole by making unequivocally clear that comparison shopping websites must get consumer consent one seller at a time.

Additionally, as amended “prior express written consent” shall be revised to read, as follows:  “The term prior express written consent means an agreement, in writing, that bears the signature of the person called that clearly and conspicuously authorizes no more than one identified seller to deliver or cause to be delivered to the person called advertisements or telemarketing messages using an automatic telephone dialing system or an artificial or prerecorded voice.”  The “seller” is not the a lead generator.  It is the provider of the products or services

Moreover, “calls 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.”  “[R]obotexts and robocalls that result from consumer consent obtained on comparison shopping websites must be logically and topically related to that website.  Thus, for example, a consumer giving consent on a mortgage loan comparison website would not be deemed to have provided consent to receive  robotexts or robocalls about auto insurance.

The written agreement must also include a clear; and conspicuous disclosure informing the person signing that:  By executing the agreement, such person authorizes the seller to deliver or cause to be delivered to the signatory telemarketing calls using an automatic telephone dialing system or an artificial or prerecorded voice; and the person is not required to sign the agreement (directly or indirectly), or agree to enter into such an agreement as a condition of purchasing any property, goods, or services. The term “signature” shall include an electronic or digital form of signature, to the extent that such form of signature is recognized as a valid signature under applicable federal law or state contract law.

• “We now make it unequivocally clear that texters and callers must obtain a consumer’s prior express written consent from a single seller at a time on the comparison shopping websites that often are the source of lead generation, thus closing the lead generator loophole.  Requiring one-to-one consent will end the current practice of consumers receiving robocalls and robotexts from tens, or hundreds, of sellers – numbers that most reasonable consumers would not expect to receive.”
• “Websites, including comparison shopping websites, can use a variety of means for collecting one-to-one consent for multiple sellers to comply with our rule. For instance, the website may offer a consumer a check box list that allows the consumer to specifically choose each individual seller that they wish to hear from.  Alternatively, the comparison shopping website may offer the consumer a clickthrough link to a specific business so that the business itself may gather express written consent from the consumer directly.”
• “In adopting our requirement, we reject … proposal to permit consent to a hyperlinked list of sellers, effective for only a limited number of sellers to whom the consumer is matched.  We find that this proposal would unnecessarily require consumers to consent to a potentially lengthy list of entities that may not be relevant to the product or service the consumer is seeking.  Instead, we require consent to one seller at a time.  Sellers and lead generators may provide additional information about sellers or a list of sellers that a consumer can affirmatively select in order to be contacted.”
• Note that the FCC may be leaving a bit of wiggle for lead gens to permit consumers to provide multiple seller consents in one page, but there are limitations.  “We require consent to one seller at a time, but this requirement does not specify how many sellers can be listed on the web page; if the web page seeks to obtain prior express written consent from multiple sellers, the webpage must obtain express consent separately for each seller. In addition, other sellers can be included on the web page for reasons other than obtaining consent, e.g., for contact that does not require TCPA prior express written consent, or with information allowing the consumer to contact the seller directly.”

It looks like there will be a six month period for businesses to ensure compliance.  “[W]e   nonetheless give texters and callers, and any third party websites they obtain consent through, a six-month implementation period to make the necessary changes to ensure consent complies with our new requirement.  This implementation period should provide both lead generators and the callers that rely on the leads they generate ample time to implement our new requirements.”

While many comparison shopping websites that involve lead generation (i.e., websites that generate a consumer “lead” for a seller) benefit consumers by enabling them to quickly compare goods and services and discover new sellers, the FCC believes that new protections are necessary to stop abuse of consent requirements.

Takeaway:  The FCC appears poised to close the lead generator loophole by making unequivocally clear that comparison shopping websites must get consumer consent one seller at a time, and thus prohibit abuse of consumer consent.  According to the FCC, requiring one-to-one consent will “end the current practice of consumers receiving robocalls and robotexts from tens, or hundreds, of sellers – numbers that most reasonable consumers would not expect to receive.”  Aged leads will be toast and data brokers/networks severely impacted.  Contact the author to discuss what may be a shift toward “direct post” and the concept of “dynamic consent disclosures.”

Richard B. Newman is a digital marketing practices attorney at Hinch Newman LLP.  Follow FTC defense attorney on X.

Informational purposes only. Not legal advice. May be considered attorney advertising.