Brokers tempted to lay out £35 to £50 for an unregulated site lead need to ask the details’ provenance. More unscrupulous sites will sell leads already used elsewhere (known as ‘multi-distribution’). This can lead to consumer confusion – or worse. Customers may wonder how often their details have been sold. And as many sites make unjustifiable claims, policyholders might have eventual cause for complaint.
All this adds to acquisition costs – especially if the leads are low quality. PMI brokers can find free leads from the Association of Medical Insurers and Intermediaries site.
Brokers could risk their name using these sites and insurers face a potential backlash because of unauthorised logo use but so far few insurers have proactively policed their intellectual property.
“Brokers need to understand where their leads come from,” said Ms Walker. “They should ask for recommendations from other brokers. And they should not be confused by insurance company logos, many are there without permission. This is a growing issue but one still scarcely discussed or debated. ”
Some brokers buy from these sites, or use call centres, in good faith assuming the source is reputable. “But all intermediaries purchasing protection leads need to ask the questions – if they don’t there may be a presumption by clients and regulators that they do not want to know. And there could be data protection act difficulties as well,” said one compliance expert.
In April, the FCA said that it would use powers under section 137S of the Financial Services and Markets Act 2000 to ban misleading financial promotions. This means it can remove promotions immediately from the market, or prevent them from being used, without the enforcement process. Whether it can be used against regulated firms using unregulated lead generation and other marketing is so far untested.
But with memories of the horsemeat scandal where every link needed to be checked, regulated firms may not wish to take risks that the FCA will ignore the rest of the lead generation chain.
Tony Levene is a freelance journalist
Key points
- Advisers’ use of lead generation sites could lead to reputational loss as well as unnecessary costs.
- Online, there are some 20 unregulated sites promising quotes on complex protection policies such as private medical insurance, critical illness and long- term income protection “within 30 seconds”.
- Brokers need to understand where their leads come from.
