FCC Shuts Down the “Lead Generator Loophole” with New Ruling Requiring Express Consent

Yesterday, on December 13, the FCC enacted a groundbreaking ruling, reshaping the lead generation landscape for home services businesses. This ruling mandates direct consumer consent for each seller in lead generation activities, significantly impacting how companies approach customer outreach. This change aims to enhance consumer protection and privacy, demanding a strategic pivot from home services brands to comply with the new standards. This development represents a critical step towards more responsible and consumer-focused marketing practices in the industry.

Why This Matters for Home Services Brands

The closing of the lead generation loophole marks a pivotal moment for home services brands, who now face the challenge of adapting to a rapidly changing landscape. This shift, driven by new regulations, targets the once-common practice of sharing consumer leads among multiple sellers without specific consent. Home services companies must now rethink their strategies, focusing on direct and compliant consumer engagement. This change not only aligns with evolving consumer privacy expectations but also ushers in an era of more transparent and customer-centric marketing practices in the industry.

Details on the FCC Ruling

• The new ruling expands Do Not Call (DNC) protections to include text messages.
• It redefines “prior express written consent” as an agreement allowing only one specified seller to contact a consumer.
• The ruling stipulates that calls should be directly related to the context of the consent given.
• Lead buyers (brands) are now responsible for keeping their own consent records and cannot rely on records maintained by sellers.

The FCC’s proposed rule significantly changes lead generation practices. It mandates obtaining individual consumer consent for each seller, ending the use of shared consent among multiple sellers. This specifically targets comparison shopping websites, requiring them to secure distinct consent for each seller.

Additionally, the rule requires that communications be relevant to the consent given and includes a clear disclosure about the use of automatic dialing systems or prerecorded voices. The rule aims to reduce unwanted robocalls and robotexts, significantly impacting lead generators, networks, and data brokers. For full details, read more here.

What Does this Mean for Home Services Lead-gen?

The FCC’s new rule, which will go into effect in September of 2024, is significant for home services contractors using lead-gen platforms like Angi, Home Advisor, Networx, Porch.com and Thumbtack, because it requires individual consumer consent for each seller. This means that lead generation through these platforms must be more targeted and consent-specific, potentially reducing the volume of leads that can be shared among different contractors. Contractors will need to adapt their marketing strategies to comply with these stricter consent requirements, focusing on direct and personalized engagement with potential clients.

Another significant aspect of this ruling for Home Services contractors is the emphasis on compliance and the potential for legal and financial repercussions. The rule’s focus on individual consent and relevant communication means contractors must ensure that their marketing practices are thoroughly compliant to avoid penalties. This shift may require additional resources for compliance monitoring and possibly restructuring marketing strategies, impacting how contractors interact with lead generation platforms and manage their customer outreach.

How Contractors Should Respond

In response to the FCC’s new ruling, home services companies should consider investing more in their brand, re-evaluating their digital marketing mix, and potentially increasing focus on higher-quality channels such as Meta, Google, and Yelp. These steps will help in adapting to the new regulations while maintaining effective customer engagement and lead generation practices.

Here are a few actionable tips to pivot your marketing:

• Invest in a balanced digital marketing mix for your home services business.
• Do an assessment of your operations and determine how to better align your operations with your marketing — and specifically your internal lead handling practices — to make the most of your leads.
• Market to your database in an effort to create more repeat customers and growth both share-of-wallet and increase your average customer lifetime value (CLV).
• Focus on building up a great reputation for your company through creating a great customer experience and managing your online reviews.
• Invest in building up brand equity, i.e. recognition and customer loyalty.

How Mediagistic Can Help

If your business needs assistance in navigating this new landscape, Mediagistic can help. As a full-service agency, our team is well-versed in multi-channel marketing and advertising campaigns that can achieve the right mix between generating leads and building up your brand. Talk to an expert today and get a complementary marketing assessment for your business.

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Justin Littlejohn is the Senior Director of Digital Marketing for Mediagistic. His past endeavors include web development and IT, e-Commerce management, entrepreneurial ventures, and search engine optimization.Connect with him on Linkedin.