The Debt Industry: A look at lead generation

We’ve all had those telephone calls, “Did you know there was a little known Government legislation which can write off the debt you can’t afford?” It then goes on to say “Press 1 if you would like to continue”.

The Office of Fair Trading has released updated guidance which includes the marketing activities of debt advice providers. One area which has been a concern for some time is unsolicited text and telephone calls. Our review of the lead purchasing industry is a general gathering of information. We conducted our own research, spoke to lead generation companies as well as the people who have purchased the leads. Let us know your thoughts and opinions in the comments section.

Debt Support Trust is a registered debt advice charity. We have never and will never cold call, nor do we instruct other companies to cold call on our behalf.

What is a lead?

I’ll start by explaining what a lead is. For-profit debt advice companies are searching for the most profitable clients which will make them the most money. This could be people who enter a debt management plan and pay a fee for the company to manage their debts. It could also be an insolvency company who would like people applicable for an IVA or Trust Deed.

The lead is typically described as the name, address and telephone number of the person requiring assistance. The lead purchaser (debt company) and the lead provider (company with the call centre) will agree beforehand on the quality of the lead. For instance, the person will have a level of debt above £5,000 which is owed to a minimum of 3 different creditors and they will be in employment. The company will also agree on a cost per lead and volume of the order. Leads can be purchased from £10 up to £200 per qualifying lead, depending on the level of quality selected. The person’s information, or the lead, is then transferred by email or ‘hot-key transfer’ to the debt company to proceed with the solution. The hot-key transfer is where the telephone call is passed to the debt company from the call centre, whilst the person in debt remains on the telephone.

The lead provider will have received your details from a database provided by a data company or they also have a number of debt websites. If you submit your details to their debt website you may find your information is then sold to the debt advice company to give you a call. Often your details will be sold multiple times to maximise the return for the lead provider.

The Companies Cold Calling

Large for-profit debt advice companies rarely cold call data, instead they outsource this task to telephone call centre companies. These organisations have operations across the world generating leads. The company cold calling won’t always focus on providing debt leads; they provide a range of highly sought after data, from people applicable to make a personal injury claim through to missold insurances like payment protection insurance.

The staff within these companies will often work on commission and are set rigid targets for sales. Whilst generating leads is essential for these companies, the staff on the telephone generating leads are also monitored on the time they are on the telephone, how long they are busy for and the number of people they disqualify as “not wishing to proceed”.  If they disqualify too many people it reflects badly on their stats. This can often be the reason why you receive multiple telephone calls, despite asking to be removed from their database.

Telephone Preference Service

One route to deal with unsolicited telephone calls is to join the Telephone Preference Service (TPS). The TPS records the telephone numbers who wish to join the “Do Not Call” register. You can join the TPS by telephoning 0845 070 0707, by completing this form or writing to them at Telephone Preference Service, DMA House, 70 Margaret Street, London, W1W 8SS.

It can take time, usually up to 28 days, for your “Do Not Call” request to filter through to the data companies who should be checking their data frequently. The Privacy and Electronic Communications (EC Directive) Regulations 2003 state data marketing companies should screen their data frequently to ensure they are not contacting anybody who is registered on the list.

Unsolicited Text Messages

You may receive unsolicited text messages about debt problems. By replying STOP to these texts these should cease, however one tactic being used is to switch the telephone number which is sending out the text message.

There is an excellent page about text message marketing on the Information Commissioners website

You can report the text message to your network service provider. The details are below:

Vodafone: Forward the SMS to 87726

Orange, O2 and T-Mobile: Forward the SMS to 7726

Three: Forward the SMS to 37726

Unfortunately joining the TPS service has limitations, such as it will stop sales and marketing calls but it will not stop market research calls. This in turn can be a route for call centres to speak to potential leads and turn the conversation towards being referred to a for-profit debt advice company.

The Issues with unsolicited texts

People often take offence with unsolicited sales and marketing calls predominantly because,

  1. You get repeat calls from the same companies.
  2. You can answer the phone then have silence. This is because the call centre uses an automatic dialler and all of the agents are busy when you pick up the telephone, so you are left with nobody on the other end of the telephone.
  3. You are being interrupted in your own house.

How to stop unsolicited marketing completely

It’s important to note that not all for-profit debt advice organisations will market their services through cold calling telephone calls and unsolicited text marketing. The only way to stop unsolicited marketing is for the debt advice companies who do take part in this marketing activity to stop paying the lead generation companies.

Sales agents for lead generators are often inaccurate with the information they provide the indebted individual. “Write off your debt”, “clear all your debt” and “Get a Government-backed solution” are phrases used which can wrongly mislead the person in debt.  The majority of debt advice specialists, charity or fee charging, would avoid lead generation firms because of the brand and reputation damage it could do. It’s time the remaining debt advice organisations did the same.