It added that doing so would further undermine its regulatory powers by “adding to the workload”.
Jiten Varsani, mortgage and protection adviser at London Money, said he understood the concern of the regulator being overloaded, but added that protecting consumers was a core principle of the FCA. He said it was important to remember that less scrupulous lead generators only existed due to demand for their services from within the industry.
However, he added that a data certificate accompanying a lead would be a good start to the protection planning journey for the client.
Ms Greatorex said that a positive message was not being conveyed to consumers who, after providing their personal information in good faith to acquire a quote or further information, are contacted more than once or without an understanding of the service they would receive.
Shayne Halfpenny-Ray, policy and public affairs adviser at the Chartered Insurance Institute, described the recommendations as “particularly welcome” at a time when financial protection was playing an important role in helping people who had been impacted by the coronavirus, as well as those with existing needs.
Cross-industry action needed
The authors have urged cross-industry action whereby legitimate lead generators, intermediaries and insurers agree on a universal system of certifying lead generation, which “crowds out the fraudulent element” of the market.
Ms Greatorex agreed the “more unsavoury side” of lead generation needed to be removed to assure consumers who try to access protection options online.
According to the authors, data certification would force rogue lead generators to change their behaviour or leave the life insurance market, leaving those that are compliant and transparent to “flourish” without being undercut by their fraudulent counterparts.
They added that distributors, who rely on less scrupulous leads or data that had been resold, would not be able to place life insurance business with insurers without proving where the client first applied.
Mr Halfpenny-Ray added that those in the industry would be even better equipped to secure their customers the best possible outcomes, if they could be confident that the information received from leads was consistently accurate and credible.
chloe.cheung@ft.com
