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Bill Rice is the CEO of Kaleidico, a leader in lead management systems. Prior to founding Kaleidico he was the VP of National Home Equity and the Home Loan Benefit program at Quicken Loans and one of the founding executives of DeepGreen Bank, an Internet-only bank that was one of the first and (at that time) largest buyers of LendingTree leads in early 2000.

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Lead Buyer Beware of Lists and Cheap Data

May 21st, 2008 • Related • Filed Under
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It happened again.

I got a call from a customer feeling like they got scammed by a lead provider. The pattern is exactly the same and all of our best practices in lead buying were skipped. So, here again in concise form are the simple steps to lead provider due diligence and the red flags that should send you the other direction.

Lead Provider Due Diligence:

  • Review Better Business Bureau (bbb.org)–Don’t click on the lead providers’ seal. Go to the site and search all variations to there name. Lead providers, and many business, are famous for altering slightly their registration information to get a clean listing.
  • Review Rip Off Report (ripoffreport.com)–It certainly isn’t perfect, but it gives you a potential data point to review and make an intelligent decision to consider or not.
  • Google the Company Name, Principles, and Address–I can’t tell you how enlightening this can be. In the customer complaint I cited above the first result was their website, but the remaining were various results from Rip Off Report and a few legal filings.
  • Look at Lead Marketwatch–Again, not necessarily perfect in all cases, but you can be assured that real people are using the provider and getting some level of observable return on their investment.
  • Read the terms of the agreement!
Red flags:
  • Significant non-refundable deposits
  • No return policy
  • Pushing cheap lists, data, aged or “vintage” leads
  • Thin contact information (No physical address or email only contact)
  • They have not been mentioned or reviewed on Lead Critic or Lead Marketwatch
What are other due diligence steps you taking in picking a good lead provider? What are some red flags you have seen in identifying lead generation scams?

There Are 5 Responses So Far. »

  1. Comment by Mortgageboss on 22 May 2008:

    Thanks for the information. I would, however, discount the BBB.

    In my opinion, they are a professional extortion orginzation. They try to get you to join by saying “If youre not in, they people wont buy form you” or “we have had inquires about your company and have referred them to our members.” Furthermore, there are cases where they ignore or dont disclose complaints about member businesses.

    Other than that, I dont have a strong opinion on the subject….

  2. Comment by Bill Rice on 22 May 2008:

    Mortgageboss-I tend to agree with you.

    It is not a go/no go decision source, but I do use it as a data point in an environment where there is very little data on lead providers (one of the reasons I started Lead Marketwatch). I find the best way to use it is to look for a significant number of consistent complaint types. For example, in the case of the customer I cited above. I searched for the lead provider they mentioned and their were about 20 “cookie-cutter” complaints in the same vein of my clients’ complaint. My search also uncovered that they had multiple registrations with BBB with different addresses–making one profile squeaky clean and the other a D.

    All in, I guess the message is do a little due diligence before you slap down a deposit.

    Thanks for the comment!

  3. Comment by alice on 27 May 2008:

    We did get ripped off by a company called Elite Marketing in California. They promised us 40 leads for $900 which we had to pay up front wiht a check. We have been asking for our leads and received may be on 5 leads that were not even within the parameters of what was contracted. We complained to BBB and have had absolutely no luck. We have made numerous phone calls, pleads, begging, emails etc. to get what was promised and no response from the company at all. Do Not Use Them.

  4. Comment by Bill Rice on 27 May 2008:

    Alice,

    Thanks for sharing your experience. In most, if not all of these scenarios, it is very difficult to get restitution. This is why it is so important to due reasonable due diligence before and certainly get documented–publicly–foul play.

    I wish this was more uncommon. This was one of the primary motivations of this site–to provide due diligence, information, and accountability.

    Thanks again for your comment.

    Bill

  5. Comment by Sammy on 2 June 2008:

    I prefer ripoff report because they are aggregated and easy to search. I haven’t been ripped off on leads yet, but I do get about 10-20 email solicitations for buying leads every day. every once in a while I check them out on ripoff reprot to see if they’re legit. There are tons of bad ones out there it seems! And, you have to wonder where they’re getting their names…

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