The Federal Communications Commission has voted to close a loophole that allowed companies to sell leads to multiple buyers, instead requiring companies obtain consent from consumers to share leads with one buyer at a time. Known as the lead generator loophole, it allowed consumers to be contacted by virtually anyone.
How it Will Work: Consumers will have to provide their prior express written consent under the Telephone Consumer Protection Act to receive calls and text messages from one seller that is topically and logically connected to the company selling the lead. The consent must be provided in a clear and conspicuous disclosure.
- This could present problems for comparison websites and other tools that provide consumers who are looking for products and services with multiple offers.
- A seller is defined as an entity that provides a good or service to a consumer.
- Under the rule, consent is not transferrable and the burden is on the entity placing the calls or text messages to prove it has consent to communicate under the TCPA.
- The rule only applies to calls and texts that are subject to the TCPA.
How it Voted: The FCC’s five commissioners voted 4-to-1 to approve the measure. Commissioner Nathan Simington was the lone dissenting vote, saying that while he hates receiving robocalls and robotexts, the way the rule is written, the FCC “clumsily rushed” into the rulemaking, which could be considered “capricious” because of the impact it may have on small businesses.
- In announcing her support for the measure, FCC Chair Jessica Rosenworcel noted that consumer groups, members of Congress, and state Attorneys General supported the rulemaking.
What Happens Next: The rule will go into effect six months after it is published in the Federal Register. That means companies will have until late June or early July, most likely, to prepare for the rule’s enactment.