How will the new FCC rule to ‘close the lead generator loophole’ impact home improvement companies?

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Janet Mobley

On December 13, 2023 the Federal Communications Commission adopted new rules that it says are aimed at protecting American consumers from unwanted robocalls and robotexts. 

Lead aggregators – like Modernize, Angi, Porch, HomeAdvisor, QuinStreet and dozens of others –  now have 12 months to comply. 

Here at FatCat Strategies all we do is generate home improvement leads, so we’re following this story closely.  

To be clear, we’re not lead aggregators. Instead, our clients hire us to generate exclusive leads through their websites, SEO and PPC campaigns. But, many of our clients also buy leads from companies like Angi, Modernize, and Quinstreet. 

Put simply, when something impacts our clients, it impacts us. With that in mind, we wrote this article in an effort to help home improvement companies navigate the changing lead generation landscape in 2024. 

Here’s what we know so far: 

The goal of the new FCC rule is meant to ‘close the lead generator robocall loophole’

Currently, comparison shopping websites or “lead generators” – like, Modernize, Angi, and dozens of others – collect contact information from homeowners and then sell that information to multiple contractors. The goal is to connect homeowners who have problems, repairs or project ideas with local contractors who fix stuff and build things.

Currently these websites connect one homeowner to many contractors. The new FCC rules are meant to change that game so it’s a “one to one” relationship.  

The stated goal of this effort is protect Americans from abusive and unwanted texts and calls. 

What do the new “lead generation” rules require? 

  • One-to-One Consent. Comparison shopping websites must obtain a consumer’s prior express written consent separately for each home improvement contractor, or “marketing partner”; a single consent to enable multiple marketing partners to send robocalls or robotexts is no longer valid.
  • Clear and Conspicuous Disclosure. The one-to-one consent must be in response to a clear and conspicuous disclosure that the consumer will receive robotexts and/or robocalls from the named marketing partner. To qualify as “clear and conspicuous”, the disclosure must be “apparent to a reasonable consumer.” The disclosure cannot be buried, barely visible, appear in fine print or only accessible through a hyperlink.
  • Logically and Topically Related. The content of the ensuing robotexts and robocalls must be “logically and topically associated with the interaction that prompted the consent.” The FCC advises the scope of permitted content can be reasonably inferred from the purpose of the website or location at which the consumer gave consent. However, the FCC declined to adopt a specific definition, and advised that, when in doubt, the seller should err on the side of limiting content to what a consumer would clearly expect.
  • Burden of Proof for Valid Consent. Under the existing rules, the burden of proof for evidencing consent is on the texter or caller (e.g., the party who received the lead). By clarifying the rules to require consent from the consumer directly to one individual caller or texter at a time, the caller or texter will be able to better demonstrate this burden of proof when the consent is obtained via a third party.

Who does this impact? 

This ruling impacts lots of industries beyond home improvement – like mortgage brokers, real estate agents, car dealers, financial advisors, and many more. That means lots of companies who rely on leads, and buy them from lead aggregators, are watching this closely and publishing opinions and prognostications about how this will all play out.

When will you start to see changes? 

This new rule becomes effective six months after publication in the Federal Register.  It was published on Dec. 13, 2023, so we’re assuming it will officially take effect in late June, 2024. 

What should you do immediately? 

  • Review how you use auto-dialers and automated SMS messages.  If your systems are set up to autodial or autotext the leads you buy, you’ll need to review your use of these systems to make sure they comply with the new rules 
  • Learn more about the burden of proof for valid consent.  Don’t assume that the lead generators will fix this for you. As we understand it, the new rule states that the burden of proof for “evidencing consent” is on you – the texter or caller. In fact, the rule explicitly warns that if you send marketing texts and make outbound calls, you shouldn’t rely on the company who sold you the lead to retain proof of consent for the calls/texts you make or send. 

What should you do over the next six months?

  • Diversify your lead sources. If you currently buy most of your leads – instead of generating your own exclusive leads –  you now have about six months to minimize your exposure to coming changes  
  • Bring more of your marketing in-house.  Double down on your efforts to generate your own, exclusive leads. On the digital side, that means investing in your website, SEO efforts, and PPC campaigns.  On the non-digital side, that could mean TV, radio, home shows, direct mail, canvassing, etc. 

If you currently buy most of your leads from third parties, and you’d like to start building your own in-house marketing machine, call us, we can help.

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