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Trigger Leads - There goes my privacy, yet again

About two weeks ago someone was describing to me how they were going to buy "Trigger Leads" for their mortgage business. I didn't know what a trigger lead was but, after it was described it just kinda made me go, how in the world is that legal...

What is a trigger lead?

After a lender receives a loan app for a potential borrower, the first things they do is to pull a credit report, that includes information from the three major credit bureaus. This request for a credit report triggers an alert to these credit bureaus that the borrower they are running the check for is in the market for a loan. These alerts packaged along with the persons private information and anything gathered via the lender pulling the report is packaged up into a "hot lead" to be resold.

The bad taste...

Wow, talk about something that leaves a bad taste in my mouth both as a consumer and would if I was a mortgage professional. As a consumer I take out a loan app with one lender and suddenly I'm getting cold called from mortgage call centers across the country. My private information has been made available without my knowledge to several other parties.

If I'm a loan officer, I now have my competitors aggressively marketing to a client I had been working with because I ran a credit check. Just a speculation here but I bet the companies that rely on trigger leads are going to much less sound in their lending practices. I would be pretty pissed off if I lost a client because of this.

Since I first learned about trigger leads, they've actually gotten some ear play in the main stream media.

Trigger leads are still a relatively new creation, having only been introduced about a year and a half ago, but I bet as the market continues to slow and mortgage companies become more desperate their use will continue to grow.

Update:

Jim Lee provided a good way of opting out of becoming a trigger lead in this blog post.

http://activerain.com/blogsview/97878/Trigger-leads-quick-opt

Posted by Matt Heaton on 05/13/2007 04:21 PM

Comments (38)

lead generation, rant

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38 Comments on Trigger Leads - There goes my privacy, yet again

MAY

2007

Great post...and the worse thing is that there is nothing we can really do to stop it but inform our borrowers and let them know its going to happen. I always encourage them to opt-out of credit bureau solicitations by visiting www.optoutprescreen.com. This is a good way to avoid the problem altogether.

Matt I got talked in to purchasing trigger leads.. It was great 6-8 months ago before everyone jumped on it. Now I have to tell you I stopped buying them and I really feel sorry for those poor people. They will get 50 calls in a 48 hour time frame.

It's a reminder to us as agents, that just because people are looking at property on the interent, it doesn't mean the want to be "captured" as a "lead".

Thanks for the 411 Matt - I had know idea that happened when someone pulls a credit check.

Would be nice to maybe add the ways to avoid this like the site John posted in the bottom of the post. Maybe there are other ways to avoid this as well.

I have become pretty good at avoiding Triggers over the last couple of months. I lost two deals early this year due to trigger leads, so now I take a new approach at the matter.

When I take the application, before I hang up the phone I let them know they might receive calls from other brokers or even people pretending to know me or my company. I tell them to ignore these calls. If you client doesn't ignore the calls, well, then you didn't do a very good job of building repor and earning their trust.

As soon as I pull credit, I send out a letter explaining what the trigger leads are and how they can and should avoid them. This has been effective ever since.

Educate your clients! Good luck to all

It makes me wonder if I pull my credit reports to check them, if this will cause me to receive 50 calls. I am afraid to try it.

It is a practice that someone needs to put a stop to. Maybe new legislation in congress.

This actually happened to me a few months ago - I applied for a HELOC from my lender and started getting mail/calls from other brokers trying to get my business. It felt like an invasion of privacy. I understand not everyone feels this way since some people are responding to these calls, but I agree with you - it left a bad taste in my mouth as a consumer.

If I had known this would happen I would have used an extension from my company line that just takes messages to avoid the phone calls. Word to the wise.

This is just wrong on soooo many levels. I, too, can't see how this remains legal.

Note to all unsolicited advertisers, you have almost no chance of winning my business by calling me first. Even if you have what I need. I'm stubborn that way.

That is some major bs. The credit bureaus need to be revamped. Its bad enough your score takes a hit every time your credit is pulled. Now they are selling your private information to anyone with a check book. Sounds like some regulation needs to be instituted. -Charles

The credit reporting system has gone totally awry. It's an example of an enterprise that gets a niche and some very valuable and sensitive information and begins to look for every way possible to make money off it.

I hate regulation but something needs to be done to correct this before it gets further along. If this info is sold that easily, how tough is it for those wanting to use the information for identity theft?

Matt - thanks for this heads-up. I've never heard of trigger leads before, but you can bet I'll be asking the lenders I work with how they handle this upfront. I guess I better be working on something to help educate my buyers as well.

What on earth will come up next that we have to deal with? These leads just feel really slimy and sleezy to me.

Ann

Keith you made an excellent point - with all the scares about identity theft, how can this kind of junk just continue on unregulated? How bad do things have to get before something actually gets done to stop this kind of pervasive passing of personal information out like this?

Very scary!
Ann

Wow, I had never heard of this either. What a terrible business practice! As you mentioned, compaines and agents who use this sort of thing automatically seem suspect to me, but that's not much comfort to the people who get bombarded with phone calls after an innocent inquiry.

There is an option to not receive unsolicited phone calls if you apply for credit or insurance.

Just go to this website and fill out the form.

"Through this website, you may request to:

Opt-Out from receiving Firm Offers for Five Years - (electronically through this website).
Opt-Out from receiving Firm Offers permanently - (mail Permanent Opt-Out Election form available through this website).
Opt-In and be eligible to receive Firm Offers. This option is for consumers who have previously completed an Opt-Out request - (electronically through this website)."

This opt out covers Equifax, Experian, Innovis, and TransUnion.

For every problem there is generally a solution.

Matt: This post pretty much "sent me" and I don't send easily! I certainly do not want my clients to be hassled by 50 different Mortgage Companies simply because they went to a lender and applied for a loan app. This technically may be legal for now but it certainly is not ethical.

Thanks for the valuable information. :)

Interesting but I don't see this as being very profitable for the loan officer buying the leads. Most people seem to be on the do not call list so if a loan officer does cold call I would expect the prospect would not be very receptive to them.

Just another reason why we all need to not be in a hurry with out clients. It takes 1-2 weeks for teh Opt Out to register. If we council our clients, opt them out of both Trigger leads and DNC, gather their loan documentation and schedule a sit-down presentation with them in which we THEN pull their credit we would be able to avoid many of the problems with this.

Very unscrupulous tactics are used by some that buy these trigger leads.

Sending a bogus Good Faith & disclosures.... bait & switch. ect.

I even had one company order title work and have an appraiser call on a refi deal I was doing.

I believe real estate is local and lending is local to me. I always suggest to my clients, relatives aand friends to avoid the internet lenders asn stick to people that are local. Te deals are even better and the money stays in your town. The triggers should be stopped as someone is paying for that report.

I had never heard of trigger leads before now. It certainly seems like it violates all of the rules of good marketing and personal privacy. I'll be looking into the solution that Jim Lee provided above.

Hi - I have never heard of this either. Seems to be that the Do Not Call Registry should eliminate those calls, though, right? At least I hope so! Thanks for the heads up....Liz

MAY

2007

Thanks for member who've provided some of their own experiences and solutions to the problem. I wrote this post partially out of shock that this was legal, its certainly not ethical. My refinanced her student loans within the last two years, and she commented that after submitting one app she got calls, emails, letters from dozens of other loan providers. So there are probably trigger leads on student loans too.

Couldn't Agree More.... Trigger leads are for companies who can not market themselves and have to use the marketing of other companies. I spend countless hours marketing on AR, Blogs, Print, Radio, Referral and my website.

I have came up with a strategy to fight these low life companies from stealing my clients. With every loan application I give my borrower information on what "Trigger Leads" are and what is more then like going to happen with them over the next week or so. I do encourage shopping around but I also arm them with the information they need to make a wise decision and finding a reputable company.

Great info Matt - i didn't realize this was going on either.

Wow, thanks for the heads up. This is information we should pass on to family, friends, and clients.

Great Post...however, it teaches us one thing do not trust anyone. You have to be very aggressive and get contracts signed early and often to avoid situations like this. You cannot blame our clients you can only balme ourselves for not educating the consumers. Do not allow someone to brush you off make sure they are working with you...if they are working with you.

Reminds us of the Lending Tree Commercial where the Dad is not automatically going to use his own Son for a loan because he is going to compare....that commercial is exactly how it is now, we have to adapt and deal with it and success will follow.

Best of success,

We had a sales meeting about this very thing. Jim Lee gave the answer on his response to this. You can opt out for your client. Call them of course, and BEFORE you run their credit let them know you are doing this. This will keep them from getting calls from everyone. Your client in turn will be extremely thankful that you did this for them. Keep a copy of it and give it to them so everything is on record.

I do this before I run credit now.

Matt, I couldn't agree more. I have a real problem with the credit agencies selling our information to others as leads. It's just plain wrong. We have to use them because they're the ones that track our credit, and suddenly they're profiting from our information that they didn't even have to pay us for? Not only that, they're putting us on a "hit list" so that we're bombarded by the competitors of our chosen lenders? Total garbage and absolutely should be outlawed!

When we take a listing or turn in a contract, we always let the client know upfront that we do not share their address, but that other sources do, so they may be getting unsolicited junk.

It is bad enough that there are credit reporting agencies in the first place. But not to have regulations covering there use of our personal information seems very objectionable to me.

MAY

2007

I was warned about this by my realtor. It's a very easy fix for the consumer - promptly put yourself on the DNC Registry. Simple.

JUN

2007

Thanks Matt, for bringing this to light it is a dirty little secret from the credit bureaus. For about a year in our office we couldn't figure out why when we pulled a clients credit or our own that the clients and us were getting bombarded with telemarketing calls for mortgages. We had originally thought it was the company that we were paying to have the ability to pull credit and I was very disgusted by this so I did some research and found out that it is actually the three bureaus Experian, Trans Union and Equifax. They sell this information as soon as the credit it is pulled it takes 24 hours before it is passed along to the company that has purchased it. They first check against the Do Not Call National Database and then against the Opt out clause you can request through the bureaus. There are two kinds of opting out the online version that opts you out for 5 years or you can choose for a life time, this requires a written request to the bureaus. I have heard by choosing to opt out it can raise your score by 10 -15 points because technically according to the algorithims used you are a better canditate know for credit as you do not want to be solicited for unwanted offers. I have opted out and recently I pulled my credit and it does state on the credit report that I am not to be solicited for offers.

In addition states are finally getting smart and outlawing trigger leads, Minnesota being one of them as it is an invasion of private information.

JUL

2008

This info is still relevant even though it's been over a year since you made this post. Our personal information is at stake every day. Something has to happen to combat this. Thanks for sharing.

AUG

2008

The reason there are so many trigger leads is the 99% of the consumers are unaware that they can opt out to having that information released. But you have to request to be opted out, and the bureaus are not interested in advertising that fact, due to the fact they are making money when these people purchase a credit report

OCT

2008

Just pointing out the limitations of the Opt Out Web site and why it does not necessarily apply to trigger leads.

FCRA attempts to govern how the major credit data repositories sell consumer data: In the old days, a potential creditor would pay the major credit data repositories for a consumer's data when, and only when, that consumer applied for credit from that creditor. In applying for credit, the consumer gave permission for the major credit data repositories to release their private and confidential information to that potential creditor.

Then the major credit data repositories came up with a new approach to selling consumer data: They will now sell a prescreened list to creditors... Creditors buy this list for the purpose of making firm offers (pre-approved offers) to the folks on that list. It is as if each consumer had applied to the creditor and the creditor paid the major credit data repositories for the consumers' data (except that the consumer had Not filled out an application giving permission to the creditor to pull their credit data or to the data repositories to release their data). To make this new approach to selling consumer data 'acceptable' in the eyes of the FCRA, it was agreed that the consumer would be given a website, phone #, and mailing address so that they could opt out of these pre-screened offers. Notice that nothing here has to do with Trigger Leads.

Trigger leads are an even newer way of selling your data than 'pre-screened lists'. Opting out of pre-screened lists is not opting out of being a Trigger lead. A Trigger lead is the selling of any lead that has been just sold to a creditor. What puts the data in the "Trigger lead for sale" bucket has nothing to do with the pre-screening of their data base to find qualified leads. It is simply the fact that someone ran credit on the consumer. If a mortgage company runs credit, then the lead is sold as a mortgage trigger lead. There is no opt out process for trigger leads - not until the law changes. For now, the credit companies are happy to have consumers think that the firm offer/pre-screen opt out process will also act as a Trigger lead opt out, but it just ain't so! There is no law against trigger lead sales and no opt out process for trigger lead sales despite numerous 'articles' claiming otherwise.

Write your congressperson.

OCT

2008

also, here's a link to the do not call list. it's a good idea to add yourself to both..

https://www.donotcall.gov/

JUN

2009

I don't see how these leads could actually be a good source for business in the first place. If a prospect were willing to shift from one lender to another just because they got another phone call for a "better" deal, means that there would be a limited amount of loyalty there in the first place. This is an industry that, despite what some may say, is built on trust and relationship selling. These trigger leads would have to be a huge hindrance to our struggling industry, and even worse when times are good.

If there is anyone that would like to discuss, or could direct me to a forum to explore legal support with our local congressmen to limit or eliminate these kinds of business practices, please do so.

Thank you

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Matt Heaton

Bothell, WA

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Timu Corp - CEO, ActiveRain - Co-founder

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