CONC 8.9 Lead generators: including firm responsibility in dealing with lead generators
The Principles (in particular Principle 6 and Principle 7) apply to actions of a firm dealing with a customer who has been referred to it through a lead generator. For example, where a firm acts on a sales lead and knows or ought to know that the lead generator is using misleading information, advice or actions to obtain a customer's personal data is likely to amount to a breach by the firm of Principle 6 and Principle 7.
A firm must take reasonable steps before entering into an agreement to accept sales leads from a lead generator for debt counselling or debt adjusting or providing credit information services to ensure:
- (1)
that any of the lead generator's advice, any content of its website and advertising and any of its commercial practices comply with applicable legal requirements, including the Consumer Protection from Unfair Trading Regulations 2008;
- (2)
that the lead generator is registered with the Information Commissioner’s1 Office under data protection legislation1; and
- (3)
that the lead generator has processes in place to ensure it complies with that Act and with the Privacy and Electronic Communications (EC Directive) Regulations 2003.
[Note: paragraph 3.9 of DMG]
The steps required to satisfy the requirement in CONC 8.9.2 R should depend upon the regularity with which the firm intends to accept sales leads from the lead generator. If sales leads provided by a lead generator are likely to be on a single or occasional basis, less rigorous checks should be required than for a specialist sales lead generator.
[Note: paragraph 3.9 (box) of DMG]
A firm must take reasonable steps, where it has agreed to accept sales leads from a lead generator for debt counselling or debt adjusting or providing credit information services, to ensure that the lead generator:
- (1)
where it does not have a Part 4A permission for debt counselling and is not an appointed representative of a firm with such permission, does not carry on debt counselling in obtaining or passing on sales leads to the firm;
- (2)
where it carries on debt counselling, has and continues to have a Part 4A permission for debt counselling or is an appointed representative of a firm with such permission;
- (3)
where it does not have a Part 4A permission covering the relevant activity, does not claim to or imply that it provides debt counselling or debt adjusting or that it is providing credit information services;
[Note: paragraph 3.12 of DMG]
- (4)
complies with applicable legal requirements, including the Consumer Protection from Unfair Trading Regulations 2008 in relation to any of its advice, any content of its website, any of its advertising and any of its commercial practices;
[Note: paragraph 3.9a DMG]
- (5)
makes the true nature of its services clear to customers, through any means of communication or promotion it uses;
[Note: paragraph 3.12 of DMG]
- (6)
where it seeks a customer's personal data to pass on to a firm for a fee, it makes clear to the customer that the customer's personal data will be passed on to the firm;
[Note: paragraph 3.12c of DMG]
- (7)
makes clear to a customer any financial interest it has in passing on a sales lead to the firm;
[Note: paragraph 3.12d of DMG]
- (8)
makes clear, if asked by a customer, the nature of its relationship with the firm;
[Note: paragraph 3.12e of DMG]
- (9)
does not falsely claim or imply in any way that it is or represents a charitable or not-for-profit body or government or local government organisation;
[Note: paragraph 3.12f of DMG]
- (10)
communicates with customers consistent with, and promotes, services the firm is able to provide;
[Note: paragraph 3.12h of DMG]
- (11)
complies with the Privacy and Electronic Communications (EC Directive) Regulations 2003 and data protection legislation1;
[Note: paragraph 3.11 of DMG]
- (12)
does not send, or cause to be sent, an electronic communication to a customer (C) unless C has previously notified the lead generator that C consents for the time being to such communications being sent or caused to be sent by the lead generator;
[Note: paragraph 3.12j of DMG]
- (13)
does not make or cause to be made by means of an automated calling system (which is capable of automatically initiating a sequence of calls to more than one destination in accordance with instructions stored in that system, and transmitting sounds which are not live speech for reception by persons at some or all of the destinations so called) a call to a customer (C), unless C has previously notified the caller that for the time being C consents to such communications being made by or caused to be made by the caller on the line in question; and
[Note: paragraph 3.12j of DMG]
- (14)
enables customers to cancel using a clear and easy method their consent to be called or sent any communication.
[Note: paragraph 3.12m of DMG]
[Note: paragraphs 3.7 and 3.8 of DMG]
Guidance for firms
The FCA would expect firms that agree with lead generators to accept sales leads in relation to debt counselling or debt adjusting to be able to identify, upon request, all the lead generators from which they have received leads (with the FCA authorisation number, where applicable).
In complying with CONC 8.9.4 R a firm that agrees with a lead generator to accept sale leads should:
- (1)
check with the Information Commissioner’s Office that the lead generator is appropriately registered under data protection legislation1; and
- (2)
check the lead generator's Privacy and Electronic Communications (EC Directive) Regulations 2003 process documentation.