GK Guest Blog – Capturing Marketing Consent: The Next Compliance Battleground in Financial Services

In our latest Guest Blog from Alain Desmier of Contact State, experts in validating specialist third parties, he explains: “Whether you generate the leads on your own website or you work with a third-party lead generation firm, now is the time to seriously consider how you document marketing consumer consent.”

Financial promotions regulation is changing and the FCA, shaken by the criticism of its failure to prevent the LCF mini-bond scandal is increasingly emboldened and active. A timid, hands-off approach to financial marketing regulation has been replaced with a new consumer duty and the FCA is explicitly targeting misleading lead generation.

Regulatory sea change on Financial Promotions is coming

The clearest example of this regulatory sea change is in the funeral planning sector and expressed here in Clause 5.56 of the consultation paper :

“Firms will only be able to contact customers (or potential customers) for the purposes of interactive marketing (e.g. by phone or in person) where they already have an established client relationship with them. Examples of existing relationships include where the consumer already has a product with the firm. Our proposed cold calling rules would not apply to the scenario in which a potential customer had initiated the relevant dialogue and made an express request to be contacted.”

The new rules being brought into the funeral planning industry essentially ban the calling of a customer unless it can be proved that the consumer has made an ‘express request’: the focus is on ‘consent’. The respected BBC Money Box journalist, Paul Lewis has suggested that the reforms in funeral planning could be extended to the wider financial services market.

ICO already stepping up enforcement activity

This all happens at time where the Information Commissioners Office (ICO), who is responsible for enforcement of the UK’s data laws, has also stepped up its attack on unscrupulous financial services business that target and call consumers without their consent. In w/c 20 March 2022, the ICO fined four different businesses who “purchased data from other companies without reviewing evidence of consent or any due diligence”.

This is very significant because even some of the biggest financial brands in the UK would fall foul of this ruling right now, they buy data without evidence of consumer consent.

Cold calling: the battleground for protecting vulnerable customer

Cold calling will be the battle ground that both the FCA and the ICO use to prevent vulnerable customers from being mis-sold and harassed by financial services firms. The rulings, fines and public censures are just going to increase, in volume and scale of fines. Unambiguously the ICO will demand to see proof of consent for any outbound customer call that a firm makes and the FCA will want to understand what due diligence a ‘lead buyer’ has done on the suppliers of data and leads.

I’ve written a number of pieces over the last 12 months documenting this regulatory shift and showing how the ICO, the FCA and the Advertising Standards Authority (ASA) are all making misleading and fraudulent lead generation a target.

Whether you generate the leads on your own website or you work with a third-party lead generation firm, now is the time to seriously consider how you document marketing consumer consent.

 What does Contact State do?

Contact State is a lead generation certification platform, we help lead sellers and buyers work together by certifying the customer marketing journey, customer, customer consent and marketing methods of each bought lead and enquiry.

What are the sort of businesses your work with?

Contact State helps networks, financial intermediaries and product providers take control of their lead generation campaigns, compliance audit process and real time data feedback

Should I buy leads?

Lead generation is a very powerful marketing tool, it helps businesses scale with precise return on investment metrics. However, misleading and fraudulent lead generation exists and we help firms navigate this market.

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