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Navigating the CFPB’s Lead Generation Circular: Answers to Your Top Questions
Thursday, March 7, 2024

Since the CFPB’s guidance around comparison-shopping websites and lead generators was released last week, we have received some questions. We thought a nice FAQ would be helpful.

Q. When are these guidelines going to be enforced?

A. Now.

The CFPB issued what is known as a “Circular”. Circulars are “general statements of policy” for the CFPB. These Circulars are telling us what the rules are right now.

They are used for “instructing CFPB as described herein” and allow the CFPB to “make final decision on individual matters based on assessment of the factual record, applicable law, and factors relevant to prosecutorial discretion.” Essentially, the CFPB can use this Circular to inform field staff such as examiners to be on the lookout for these types of behaviors and note them.

Q. Does this apply to all lead generation verticals?

A. Not directly.

The CFPB’s guidance is going to be limited to financial services. Insurance, for example, is not under the CFPB’s purview so this circular wouldn’t apply there. The CFPB in this Circular relies heavily on these as abusive practices under their UDAAP framework.

There are other regulators with similar rules (think FTC’s UDAP rules) which could take similar views. The FTC could look at it under potentially deceptive marketing or something similar. But, the FTC doesn’t have an “abusive” standard. Abusive is the extra A in the CFPB’s arsenal.

All of that being said, the short answer: CFPB is only financial services, but assume, now that the guidance is out there, another regulator somewhere is willing to take a long look at these practices.

Q. One of the examples looks like comparison sites can’t used “Featured” anymore is that accurate?

A. Maybe.

There is an example of an action highlighted by the CFPB as potentially problematic which uses the word “featured”. The example is

      A tool operator presents certain options as “featured” because they are provided by the operator or a third-party provider that paid for enhanced placement.

However, there is a footnote on that example. The footnote states that if the advertisement is “completely visual separate from the presentation of product recommendations or results and the advertisement itself is not presented as a recommendation” then it might not be considered to be a violation. So, the example doesn’t mean that “featured” can never be used, but it will be the operator’s responsibility to make sure it’s clear the “featured partner” is separate.

Q. I operate a clickwall based purely on pricing. Am I ok?

A. We should probably talk.

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