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Lead Generation Jonathan L. Pompan jlpompan@Venable.com +1 202.344.4383 Ari N. Rothman anrothman@Venable.com +1 310.229.9909 In the evolving world of lead generation and performance-based customer acquisition, the quest for profits can lead to big legal risks, some of them too large for advertisers who buy leads through third parties. Advertisers who harness the power of lead generation should consider the best practices listed on below to mitigate legal risk. Lead Generation Best Practices: • Understand basic advertising law. Advertising must be truthful and not misleading. Marketers and lead generators should understand what can make an advertising claim “deceptive,” as well as the appropriate use of disclaimers. • Understand laws regulating communications with leads. The Telephone Consumer Protection Act, CAN-SPAM Act, and state laws regulating commercial emails, such as California Business & Professions Code Section 17529, all regulate how advertisers can communicate with leads they purchased via outbound phone calls, text messaging, and commercial email. • Recognize the risk of noncompliance. The Federal Trade Commission (FTC) is cracking down on deceptive practices by affiliate marketers and lead generators. State attorneys general are examining the roles affiliates, merchants, and/or networks play in knowingly facilitating unfair and deceptive practices. On top of this, the Consumer Financial Protection Bureau (CFPB) is scrutinizing lead generation for consumer financial services. The consequences for noncompliance can include mandatory refunds, costly fines and civil penalties, consent orders with 20-year reporting requirements, and/or outright bans from a specific practice. Likewise, private class action plaintiffs are pursuing costly money judgments for consumers nationwide, mostly relating to how lead purchasers are communicating with the leads they purchased. 34 / Venable