Online marketing, lead generation and cold-calling have been scrutinised in a new report from Consumer Action Law Centre.
The report, entitled Dirty Leads: consumer protection in online lead generation, finds that marketers that use ‘lead generation’ can give rise to consumer manipulation and harm.
Lead generation involves businesses who use techniques like online surveys or tricky consent practices to collate and then sell lists of customer ‘leads’ to third-party businesses. These third-party businesses then contact the customer and, in many cases, use high-pressure tactics to make a sale.
The report finds that online lead generation has been associated with a range of industries which employ improper sales practices, including those involved in the VET FEE-HELP scandal as well as the payday lending sector. More recently, lead generation has been associated with an up-tick in complaints and regulator action in the solar power industry.
The report also examines lead generation in the United Kingdom and the United States, where regulators have acted more quickly compared to Australia.
“A key problem in lead generation is very poor practices with obtaining consent. For example, marketing consent can be hidden behind unrelated online activities, bundled with mandatory terms and conditions, or simply not be sought”, said Gerard Brody, CEO of Consumer Action Law Centre.
“This can mean that your name and contact details can be sold to businesses that you have not even heard of”.
The report discusses how marketing online or over the phone can lead to high-pressure in-home selling.
“There are gaps in our laws relating to unsolicited selling and cold-calling. Australian businesses who purchase contact details harvested from breaches of the Do Not Call register, but then visit those people at home, will not necessarily be breaking the law.
“There is an urgent need to enhance laws relating to cold-calling and visiting people at home”.
The report calls for:
- The Australian Communications & Marketing Authority to publish more detailed information about unsolicited marketing complaints, to aid policy-making and regulator activities;
- An overhaul of the way businesses obtain consent—there needs to be a new and consistent ‘no surprises’ approach to give people full control over how their personal information is used;
- The Australian Securities & Investments Commission to examine payday lending lead generation, which involves websites harvesting loan applicant details and sending them to other lenders for a fee; and
- Strengthening laws relating to unsolicited selling, including the Australian Consumer Law and the Do Not Call Register.