Mortgage advertising on the front line

In the highly regulated financial services market, ‘quick and dirty’ lead generation will no longer suffice, and the issue now lies with deceptive lead generation firms that use fraudulent tactics – including misleading advertising, the reselling of consumer data and impersonation of respected brands.

The number of fraudulent advertisement tactics is a growing issue for many industries – research from The Media Trust shows a 38% growth in fraudulent ads since January 2021. The need for vigilance and direct action against false advertising is clearer than ever.

Regulations are there to be followed…

Regulatory bodies have been clear about the major role financial promotions and advertisements play in the buying cycle of regulated products such as mortgages and lending. For companies that operate in the financial services sector, promotions and adverts are likely to be where their consumers have the most regular interactions. No matter the platform, these ads can have a serious effect on consumer buying decisions and product knowledge – so all promotions should be fair and clear, with no misleading information.

Today, a radically different approach to data exchange and lead certification is required – one that can help mortgage and lending firms purchase leads with confidence and avoid scrutiny from regulatory bodies such as the ICO and ASA.

…and it’s not the time to start shifting the blame

It’s no defence for mortgage brokers and lending firms purchasing leads to try and shift culpability for financial promotions to the lead generator – even though some write this clause into contracts. The responsibility is clear, and the lead buyer should take great caution in attempting to pass this on. Advice from the ASA states the affiliate and the buyer of the lead are jointly responsible for the content of advertisements.

It’s all about certified data exchange

Financial services companies need to generate leads, but they also need to protect themselves against regulatory sanctions – which is where data certification can be a powerful force in the bid to change the status quo. It can also help demonstrate full compliance with industry regulations and data protection requirements – especially if such certification is completed in a standardised format by a trusted third party.

In its simplest form, a data certificate is a record of data provenance and contains verified metadata of a customer interaction, allowing lead buyers to check that consumer data was captured in a compliant manner. This data exchange should have a rich dataset of information to support it – for instance, it might contain a screenshot of what the website looked like at that moment in time.

To be a real success, these certificates should live with the data item forever without adding friction to the marketplace with expensive costs. Additionally, they must abide by three guiding principles:

  • An independent third party – To mitigate any risks surrounding a conflict of interest, certificates should be supplied by an independent third party that is not involved in the generation of leads. Secure mechanisms should comprise the underlying technology and processes – any mechanisms that are easy to evade or defraud will cause consumer distrust and harm confidence in the certification solution itself.
  • Put consumer privacy at the forefront – The privacy of consumer data is paramount and any personal or identifying data should be anonymised, with a focus purely on the context and environment the data was collected in. Putting data protection at the heart of lead gen strategies will instil customer trust and drive digital growth.
  • Compatibility with existing technology – Data certificates should integrate seamlessly with existing technologies and be built upon open standards, allowing anyone to participate in the marketplace. The benefits to this are two-fold, and according to McKinsey open data can be a key facilitator for improved product delivery and customer service – all while building stronger fraud protection.

But the solution does not solely rely on direct authorisation of all lead generation firms by industry regulators, as this would undermine the powers of the regulatory body and create greater uncertainty over whose responsibility it is to police advertisements.

A ‘gold standard’ for lead gen won’t come overnight – it’s time to club together

Tackling fraudulent lead generators in the financial services sector has been a major challenge – and the lack of compliance mechanisms and industry coordination has left a gap for dishonest lead generators to exploit.

The solution lies in a collective, industry-wide effort, with a focus on a universal system of certifying lead generation capable of singling out fraudulent activity.

Thomas Brett, head of mortgage and lending at Contact State