Daily Fresh Trigger Leads - Read about the Myths

Myth and Mystery of Trigger Leads

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The Myth and Mystery of Triggers

For many brokers, their current popularity is a Pandora's Box of issues. With brokers complaining about how these leads are undermining their business, violating privacy laws and are just plain unethical. From these complaints and other conversations, it is clear there is a lot of disinformation about trigger leads, which I hope we can demystify.

Trigger leads evoke emotional responses because they seem to go to the heart of what many see as unfair and unethical competition. One can argue endlessly about whether the sale of trigger leads is ethical, but we can all understand that many aspects of business are "unfair." As business people, we are constantly seeking to gain the advantage over our competition. Whether that advantage is fair or unfair, often depends on what side of that equation you sit.

See also: Exclusive trigger leads

Trigger leads are not new. A "trigger" is simply an event, such as a mortgage credit inquiry. They have been around ever since a provision in the Fair Credit Reporting Act (FCRA) authorized the use of credit history to provide pre-screened offers of credit to consumers. Trigger leads are used in many industries, not just in mortgage lending. These same techniques are being used in insurance sales, automotive sales, credit cards and a host of other fields. Lately though, the major credit repositories implemented technology that allows them to respond to trigger events more quickly; within twenty four hours or less.

Many and possibly even a majority of mortgage brokers depend on word of mouth referrals from past customers, realtors, financial consultants, title companies and others in related fields. In past years, this allowed a broker or loan officer to operate with no or limited competition. The deal was done under the competitive radar. Customers simply worked with the broker they knew and felt comfortable with rather than expend effort to look further.

All that changed now that the credit repository's use of technology unmasked all these under the radar transactions and made them visible to a world of competitors. Can it be stopped? Since it would require the repeal of parts of major federal legislation that were designed to protect consumers, it is unlikely. Any changes in the FCRA could be highly controversial.

So now what? The first thing to do is understand what triggers are and what they are not.

They are not illegal. The FCRA permits the sale of certain data based upon a credit profile that would qualify a consumer for a prescreened offer of credit. They are sold directly from the credit repositories, Equifax, Experian, Trans Union or their agents.

The law requires establishment of criteria under which you would offer someone a mortgage loan. The criteria can be as specific or as general as needed. Credit score in a certain range, currently own a home with no mortgage, late payments, age range, marital status, within certain zip codes-- just a few examples of how one can craft a credit profile.

The actual data that is sold does not contain any confidential consumer information. Only contact information, names, addresses and phone numbers are delivered but the fact that all these persons fit a specific credit profile tells a great deal about their credit worthiness. Once a desired credit profile is established, a trigger user can select the event that can "trigger" the delivery of lead data, a mortgage credit inquiry for example.

Is there any way I can avoid having my client included in a trigger profile? Yes, but they require advance preparation and education. Consumers can opt out of such prescreened offers of credit by registering at a special web site that is sponsored by all three credit repositories, www.optoutprescreen.com . It takes five business days for opt out to take effect. Unless they have already registered at the site, you are probably not going to be able to protect your prospect from triggers. You should also request your clients register for the national Do Not Call list at www.donotcall.gov. This will keep your client from receiving telemarketing offers, even though they might still get direct mail offers.

Contact a Consultant today to explore your Financial Marketing Options.

What else can we do? Be proactive. Work with your marketing plans and prospect lists regularly. Stay in touch with your clients and prospects by mails and phone. Encourage them to register at the two sites mentioned above. Educate them about your concerns regarding the trigger lead.

When you are working with a new client, it is important to establish that trust relationship with them early on. Let them know what they can expect as a result of their application, and that you will work with them to analyze any claims made by others compared to your own offer. Most of these offers will advertise tempting rates. As an experienced professional, you know that there is more to a good loan than rate. Teach that value to your consumer; compare fees and services you provide. You have to be prepared to match or provide a competitive offer and convince your client that the value of your personal relationship is worth any difference in cost or rate.

Consumers will pay more for better service but the days of high margins are probably coming to a close. As a broker, you may need to change your own methods, and adapt lower cost methods so you can remain competitive.

In his book, "The World Is Flat", author Thomas Friedman reveals how the proliferation of technology has made it possible to lower costs and allow more and more people to compete for business. The trigger lead phenomenon is an example of that flat world evolution. Many brokers have not adopted technology, but can they continue to do so?

Chains like Wal-Mart and Target have led to the decline of locally owned stores and similarly, telemarketers are threatening the locally owned mortgage broker. As younger, technically savvy buyers move into the mortgage market, there is decreasing resistance to shopping for a mortgage electronically. Reluctance to making major purchases without eyeball contact with a salesperson is diminishing. We are moving closer and closer towards the paperless mortgage. Even today, many preliminary mortgage documents are transmitted and signed electronically. This is ominous news for business as usual brokers, but it could be good news for those who are willing and able to compete in this expanded space.