How to Fight Lead Fraud and Handle TCPA Regulations

During a recent conversation, compliance and legal expert Eric Troutman spoke bluntly about the TCPA. Not only is this biggest piece of regulation that call centers need to know about. It’s also “the biggest litigation cash cow in the history of our country.” Under the TCPA, Troutman says, more class-action suits—and more millionaire litigators—have been made than under any other statute in our nation’s history.

In this litigation-happy environment, how are contact centers to protect themselves? 

That was the question recently on the minds of Troutman; Rich Kahn, CEO & Co-Founder, Anura Solutions; and Nima Hakimi, CEO & Co-Founder of Convoso. The three experts sat down together during a June webinar. During their wide-ranging discussion, they zeroed in on one particular hot-button topic in the world of TCPA compliance: the issue of lead fraud.

Don’t have time to watch the full webinar? We’ve broken down the key takeaways on lead generation fraud and what call centers can do to fight it in the recap below.

TCPA Updates: What’s Going On with Lead Fraud?

With all the TCPA-related litigation that goes on, one of the best ways to understand emerging risks to outbound call centers is to take a look at what’s driving that legal activity. Troutman says that, as evidenced by the Berman v. Freedom Financial Network case, disclosure and web form formatting are one of these risks to keep an eye on.

However, in the current moment, there’s a bigger TCPA compliance issue that call centers everywhere need to take action on: lead fraud. In Troutman’s recent experience, claims of lead fraud are far and away the largest single driver of class-action litigation. And these cases can be quite the problem, he says: “Whatever form lead fraud can take, where you’ve got a consumer who says, ‘I didn’t provide my consent—I wasn’t the one that went on that website,’ that is a huge, huge issue [for lead buyers].”

The Ultimate Checklist

TCPA compliance checklist for your call center

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The Risks of Lead Generation Fraud

Why is lead generation such an issue? As Troutman explains, virtually all of the risk winds up in the hands of lead buyers, rather than those who generated or provided the fraudulent lead to begin with. “The bad guys get money and get away with it, and that’s why this phenomenon keeps going on. Meanwhile, the good guys buying the leads have to pay for it—and then they have to pay for it again because they’re holding the risk. It’s a terrible situation.”

In this terrible situation, there’s really only one acceptable approach for businesses buying leads: You must adopt a zero-tolerance policy for fraudulent leads. Otherwise, at $500 per TCPA violation, you run the risk of “getting crushed,” in Troutman’s words. “Even if just 1% of your calls are fraud, and the plaintiff can find those, then you’re in a ton of trouble.”

For lead buyers, the risks associated with fraudulent leads aren’t just related to the threat of litigation though. As Rich Kahn explained, there are at least three additional risks that come with buying bad leads:

• ROI: When you buy a fraudulent lead, you’re buying a lead that’s never going to convert.
• Brand reputation: If you contacted enough leads who did not want to be reached in the first place, you risk harming your brand’s standing with its audience.
• Wasted additional time: When trying to contact someone who did not opt in themselves, it will take longer to reach them. According to Kahn, this added time can sometimes itself be a sign of fraudulent activity.

What Can You Do About Lead Fraud?

Illustrating just how rampant the issue of lead fraud is, Kahn discussed his company’s recent findings: On average, Anura Solutions is discovering that 25% of lead vendors’ form submissions are detected as fraudulent. Today, no channel of traffic is safe from fraud. According to Kahn, even organic traffic and leads can be driven by fraudulent sources.

In this atmosphere, you simply can’t leave protection to chance. “I don’t trust anyone else when it comes to knowing whether it’s fraud or not. You have to do it yourself. You have to have some technology stack in front to know what you’re getting,” says Kahn.

Building this technology stack starts with a solution like Anura—one that not only detects fraudulent leads but also avoids false positives.

However, fighting lead gen fraud doesn’t end with technology. It also requires the right mindset and the right approach. Take action with the following steps:

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Understand how STIR/SHAKEN affects your contact rates

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Understand where your vendor’s traffic is coming from. 

Typically, it’s not lead buyers’ direct contacts that are committing fraud; it’s the sources behind them, and that’s where people get into trouble. Kahn recommends questioning your lead vendors on their traffic sources and understanding what they are doing to fight fraud.

Be ready for STIR/SHAKEN

Signed into law on December 30, 2019, the TRACED Act set in motion a series of regulatory actions that culminated in the STIR/SHAKEN framework. Within this framework, dialers and software providers must be able to attest to the quality and validity of their users’ traffic. Consult with your dialer software provider to ensure that they are able to provide you with an A-level attestation (the highest level). 

Use responsible outreach strategies

Upstream solutions and measures to help eliminate fraudulent leads and support TCPA compliance are just a start, of course. To help support compliance and improve performance, outbound sales and lead gen tems also need to implement smarter outreach strategies. These include:

• Workflow dialing: Dialing a lead over and over until you reach them is no longer a viable strategy. Workflow automation software that strategically contacts leads at preset intervals is crucial to boost contact rates and avoid frustrating customers.
• Smart redial and recycle logic: Implementing anti-fraud solutions and only working with high-quality leads will help boost the quality of your outreach. However, you still need software that extends the lifetime of leads with smart recycle logic.
• Omnichannel outreach: Supplement calls with outbound SMS and email messages to reach leads with fewer calls. Incorporating omnichannel contact center solutions will help lower your call volume and protect your caller ID reputation.

Partner with Companies that Keep Their Eyes on Compliance

As the expert panel illustrated, there’s no single solution to fighting lead fraud or maintaining TCPA compliance. While every single business’s combination of solutions may look different, there’s one thing all aspects of their approach to protection and performance should share: close attention to evolving risks posed by the TCPA.

As Nima Hakimi put it, in today’s day and age, everyone in your ecosystem must have their eyes fixed on compliance updates. The risks are simply too high: “There are a lot of companies out there that look the other way when it comes to compliance. And in 2022, you can no longer do that. It doesn’t work. It is going to come back and haunt you.”

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DISCLAIMER: The information on this page and related links is provided for general education purposes only and is not legal advice. Convoso does not guarantee the accuracy or appropriateness of this information to your situation. You are solely responsible for using Convoso’s services in a legally compliant way and should consult your legal counsel for compliance advice. Any quotes are solely the views of the quoted person and do not necessarily reflect the views or opinions of Convoso.