Call for compliant leads

The Association of Finance Brokers (AFB) is to take action to induce compliance standards in lead-generation, following a board meeting focusing on the sector.

Robert Sinclair, director of the AFB, said its view was lead generators should comply with regulation, whether it was through the Consumer Credit Act or financial promotions, because they invite people to get a loan or a mortgage.

Following last week's AFB board meeting, Sinclair outlined the three parts of the industry that required inspection as price comparison websites, lead-generation and lead aggregators, who act as intermediaries between buyers and generators of leads.

He added: "We need to understand and differentiate between the three industry sectors. What we are going to do is a lot of education pieces. All three parts of the industry need education."

Sinclair said lead-generation was a market that was evolving and needed some help to become compliant. "Clearly, we will continue to have a dialogue with the Office of Fair Trading and the FSA. The industry just needs to agree on some standards," he said.

Simon Baker, operations director at Leadbay, which is in consultation with the AFB over industry standards, said if the association can use the power of membership, that could be an effective way of making the industry compliant. He said: "The AFB can use the support of members to ensure only leads that are compliant are used. We can suggest what brokers need to look for when buying leads - for example, making sure they buy from a UK company and look at the trading history of lead-generators before use."

But Justin Rees, head of marketing at new market entrant Leadpoint, is firmly against regulation, despite the fact the firm is currently undergoing FSA authorisation. He said: "Regulation is not very productive and it would take a lot of time and money. Lead-generation in the UK is a fairly young market and it is more important to educate rather than regulate. It is absurd to regulate what people do not know about."