Loan shoppers who fill out an online interest form often unwittingly open themselves to a deluge of contact from a sea of competing lenders — but not for long. Updates coming soon to the Telephone Consumer Protection Act (TCPA), which regulates telephone solicitations including voice calls, faxes, VoIP calls and text messages, will dramatically change the way lenders market to consumers.
A seismic shift in loan lead sourcing
Among other things, the Federal Communications Commission’s changes to the TCPA will extend the National Do-Not-Call Registry’s protections to text messages; require mobile phone service providers to completely block numbers caught sending illegal texts; and close the so-called “lead generator loophole” by requiring all marketers to get direct, one-on-one written consent before calling or texting consumers.
In other words, whereas today many websites allow consumers to bargain shop for loan rates by filling out a single form to receive quotes from numerous lenders, under the FCC’s new rule a consumer can only provide “one-to-one” consent to a single lender at a time. Finalized on December 13, the ruling will be published in the federal register in 2024 and will go into force six months later.
This change has the potential to upend the lead aggregation industry, where companies have built their empires off the ability to collect a consumer’s information once and sell it to lenders 10 times over without educating the consumer on how many times their personal information is going to be sold and the consequences of doing so. Lenders who depend heavily on data purchased from lead aggregators will need to find a new way to fill their pipelines. Moreover, lenders could find themselves unable to remarket to their own past customers unless they happen to have collected and documented the customer’s express written consent in the highly specific way the new rules require.
Where do we go from here?
A change this big leaves lenders no choice but to rethink the way they approach customer acquisition. The good news is that FormFree has always believed in giving consumers control of their own personal and financial data. Because our innovative technologies were designed with consumer privacy and empowerment in mind from day one, they are all already compliant with the FCC’s ruling.
FormFree has always been committed to empowering consumers to understand and do more with their financial data, and that includes protecting their privacy at every step. This fall, we announced Passport®, a portable financial ID that makes it easy for consumers to quantify their borrowing power and share their verified assets, employment, annual and residual income and rent payment history with their selected lender in just minutes from any web-enabled device.
We then announced our online marketplace where lenders compete for the business of Passport users, called FormFree Exchange (FFX®). Once Passport users are ready to shop for a loan, they consent to share their verified data via an anonymous Qualified Borrower (QB) dashboard on FFX to receive loan offers from a marketplace of lenders who fully understand the user’s ability to pay and residual income, as well as CRA eligibility and down payment assistance eligibility of those looking for a mortgage.
The borrower’s private information — including their phone number — remains anonymous until an offer is extended and accepted. At that point, the consumer opts in to communication from their selected lender and a QB Medallion securely transfers contact information and other private information. Because this is an opt-in, one-on-one communication between the borrower and their lender of choice, the transaction is in full compliance with the new FCC rules.
The right side of history
While we understand the anxiety lenders may experience as they adjust to new modes of customer acquisition, FormFree applauds the FCC for taking steps to protect consumers and limit their exposure to unwanted solicitation and harassment. We are proud to be on the leading edge of keeping lenders compliant with regulations like TCPA. I think we all know it’s important to safeguard the consumer’s privacy while also making it easier for them to provide sensitive financial data. Passport and FFX make this transaction simple and safe for both parties.