Have you ever been tempted to consider payday loan leads? Regulators and legislators have payday lending in their sights for major reform and crack-down. Marketing practices are sure to be a big part of that crack-down. So, beware of payday leads.
Laden with Privacy Issues
To start with, most of these payday leads are full of sensitive consumer information–social security numbers, bank account numbers, routing numbers, and birthdates. This type of information dramatically increases the handling requirements of these leads to maintain privacy compliance.
Leads with detailed personally identifiable information is likely to trigger bank-type privacy compliance standards. That raises the bar way above Excel spreadsheets and email. Don’t that that chance with your business.
Deceptive Marketing Practices
Not only are payday leads fraught with privacy issues, they are probably also targets for FTC investigations. Many of these types of leads were generated with what most marketing regulars and consumer advocacy organizations would consider deceptive marketing practices.
Leads generated with deceptive marketing practices can bring legal issues and hefty fines. But, that is not the only problem–they simply are less likely to convert. Consumers that are enticed with incentives and promises that are unrealistic are uphill battles in solving the customer’s real financial problems.
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Debt Collection Rules
So, payday leads bring privacy issues, regulatory and legal risk, and are hard to close. But, that’s not all. Many of these types of leads and customers are likely to trigger debt collection rules and regulations as well. There are a plethora of rules and regulations around how you can call, when you can call, and what you can say.
Legalized Loan Sharking?
The bottom line is that many states and legislatures are looking at payday lending as legalized loan sharking–and they don’t like it. So, payday operations have been reported to charge up to 700% on late accounts and a study in California shows that it $247 million a year from targeted minorities.
These leads are nothing but trouble–steer clear of them. Next Wave Marketing Strategies never has and never will sell these consumer damaging leads.
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