Mitch Talenfeld – CEO
Student Recruitment Challenge: Identifying and Curtailing Advertising Misrepresentation and Fraud
On September 6, 2018, the Federal Trade Commission sent out a press release entitled “FTC Takes Action against the Operators of Copycat Military Websites.”. It summarizes an action the FTC took against multiple companies that were fraudulently luring unsuspecting people to their fake military recruitment websites. The release goes on to explain how the perpetrators used these websites to trick people considering military service into filling out information forms. The companies then illegally sold people’s personal information to educational institutions and other companies for a profit. This article will delve into the postsecondary lead generation ecosystem, explore some of the deplorable methods used by a relatively small number of unscrupulous lead generation companies, and finally, discuss the harm these companies cause the students and schools that are caught in this web of deceit.
For the sake of our students, our institutions, and the career education sector, we need to form an organization that is charged with weeding-out unethical lead generation companies and do a better job of protecting our students.
Why Do Educational Institutions Advertise with Lead Generation Companies?
Educational institutions, whether they are government-run, non-profit or for-profit institutions, utilize the services of lead generation companies. There are many reasons schools use lead generation companies, and two worth noting are: (1) Advertising and Internet marketing efforts are extremely expensive, extremely complicated, and difficult to execute. Reaching perspective students cost-effectively requires a multitude of marketing channels and large marketing budgets. Lead generation companies are used frequently as they provide schools with prospective student inquiries at a fixed cost per lead, which makes it easier for schools to budget their marketing expenses and takes some of the guesswork and challenge out of handling the marketing on their own, and (2) Lead generation publishers have created educational information sites that become their own marketplaces; unless institutions pay publishers to be listed on those resource-sites, students may never know those institutions exist and are their best options to fulfill their individual needs.
The challenge with using lead generation companies is that the world of paid leads is complicated. Many refer to it as a “black box.” That means it is difficult at best and often impossible to know the origin of the leads being purchased, therefore relying on the lead generation companies to police themselves.
EDU Lead Generation Ecosystem is Extremely Complex and is Ripe for Fraud
There are thousands of schools offering numerous academic programs, certifications and degrees. There is also a plethora of scholarship, grant and financing options. Every institution is different and delivers education in varying ways. Therefore, it is difficult for students to decide which of the many the education opportunities are right for them. Bearing this in mind, it is also very problematic for schools, colleges and universities to reach prospective students and standout in the complex and expensive world of Internet and digital marketing.
This creates a golden opportunity for marketers from around the world to make money in lead generation, each creating their own unique twist to finding prospective students. As a result, the lead generation industry has become extremely complex, difficult for even the most sophisticated school marketing teams to understand. Most lead generation companies are reputable; however, some are not.
Although it is over-simplified and imprecise to generalize, it is the only way to give readers a sense of the lead generation industry. General categories of lead generation companies include: publishers of education information and directories, lead aggregation companies, data brokers, call centers, sub-publishers, affiliates, and sub-affiliates. Some companies sell their services directly to schools while others work in the background. Some do a combination of both; making the relationship between companies that comprise the lead generation landscape fuzzy at best and extremely arduous to describe.
Affiliates and sub-affiliates – Affiliates are lead generation companies and are often the first contact that prospective students have with a school. A consumer might see an ad, receive an email, take an online survey, or click on a search result, which in turn, sends them to a publisher’s website. Sometimes those websites are owned by the affiliate that originally reached out to the consumer, but often-times is not. This electronic path is seamless to the consumer as it happens instantaneously. As this process occurs, there is a lot of money changing hands between lead generation companies as they sell this “online traffic” from one sub-affiliate, affiliate, sub-publisher, or publisher to the next.
Publishers and Sub-Publishers – Publishers are another type of lead generation company. They develop informational websites, which are often great resources for prospective students considering education. Publisher websites contain information on various careers, educational requirements for those careers, opportunities to qualify for educational loans, grants and scholarships, career salary information, and much more. Once students determine their needs, most publishers include a search feature that helps students find schools that meet their individual criteria—thus becoming a marketplace unto itself. Unless a school pays to be listed, they will not be shown to the publisher’s audience.
Most lead generators are ethical. However, some lead generation companies have resorted to methods that mislead prospective students—the fake military websites that were noted above and shut down by the FTC, as one example. To give readers a sense of the lead generation landscape, publishers acquire their online traffic through search engines, social media, sub-publishers, affiliates, and other digital marketing services. Some of the more concerning approaches used that are of concern include incentivizing people to take online information-gathering surveys, creating job boards that are really educational lead generation sites, sweepstakes that require people to answer numerous interest-related questions, buying online banner ads or sending emails that are directed at targeted individuals containing questionable marketing copy touting grants and scholarships, and more. Once consumers land on sites such as these or click on these kinds of ads, they are led to more legitimate publisher websites or begin receiving education-related telemarketing calls.
Lead Aggregators – The term lead aggregator is another name for a lead broker. Lead aggregators are organizations that purchase leads wholesale and resell them to the highest bidders. Sometimes their customers are other lead generation companies, and sometimes they work directly with schools. Lead aggregators will often work with anyone who is willing to purchase their leads. Lead aggregators are frequently also publishers, developing their own leads to sell to their customers. Due to the complexity of the lead generation landscape, there is no telling how many different institutions and companies are sold the same lead, which could result in a prospective student being inundated with phone calls, texts and emails from multiple organizations.
Data Brokers – Data brokers are companies that buy and sell lead data to and from lead generation companies. The data they sell includes the personal information of people who have the propensity to become students. People’s propensity to go back to school is determined through various means, which often includes tracking people’s online activities. The cost of the information data brokers sell varies depending on its quality. Lead generation companies use this information to send out advertising emails, make phone calls, and/or implement other lead generation techniques to convert mildly interested individuals who may have considered education into people who are actively considering educational opportunities—making those people’s names very valuable to education providers.
Call Centers – Call centers receive and make calls, send texts, and handle chat conversations on behalf of publishers and affiliates. Call centers assist lead generation companies in various areas of the lead generation process. Often, call centers are located outside the United States, which makes their labor less expensive. Most call centers follow US laws; however, some do not. Unscrupulous lead generation companies have been known to use international call centers to skirt US telemarketing laws and manipulate unsuspecting people into becoming leads. Sadly, unscrupulous call centers that use illegal means to identify prospective students are difficult for schools and legitimate lead generation companies to detect and stop.
Students are Being Misled and Hurt in the Process
Some students who see misleading advertisements or receive incorrect information from third-party entities do not realize that this information was not true and are hurt in the process.
As an example, the FTC case noted above uncovered companies that developed fake military websites, which included armyenlist.com, navyenlist.com, marinesenlist.com, coastguardenlist.com, nationalguardenlist.com, airforceenlist.com, and armyreserves.com. The FTC complaint noted that hundreds of thousands of people landed on these websites and were seriously harmed as a result. In the complaint filed against Sunkey, LLC, the FTC stated that people were promised on these websites that, by filling out the forms, they would be speaking with military recruiters. They were also promised that the information submitted would never be shared with anyone else.
What the people did not know is that these military websites were lead generation websites used by the perpetrators to sell prospective student information for enormous profits. Nor did people filling out forms realize that they would be speaking with call center agents whose only job was convincing them to go back to school. Additionally, people were told they were being referred to “military friendly schools,” which gave them the false impression that any school they would be speaking with had an educational environment that caters to veterans’ needs. And for a veteran coming back from deployment, going to a school that caters to veterans and understands their needs is very important.
The report From Combat to the Classroom – Understanding Student-Veterans & Service members opens in a new window contains significant detail that helps institutions understand what it is like for veterans returning from active duty to cope with civilian life and the additional challenges facing them as students. Without the proper support systems, some of the veterans would not be able to succeed in their educational aspirations.
Unfortunately, many of the schools buying leads that were generated on these fake military websites were not aware of the deceptions perpetrated by the companies that developed and ran these websites and call centers; and had no idea what was being promised. So, even though most institutions have compliance departments that review all marketing materials, internal paperwork and institutional procedures so that students will clearly understand the institution and their personal commitments, students who were misled in the first place may still not realize that what they saw or were told was wrong. And in this case and many others, students who were deceived could have significant life-long problems as a result of attending an institution that did not have the special support systems required to help them succeed.
Students invest significant money in their education. They also commit years to their studies, spending valuable time away from their family and friends. The harm that is caused by companies defrauding these individuals is reprehensible. Therefore, eliminating fraud and misrepresentations made to prospective students by unscrupulous lead generation companies is paramount. Unfortunately, as noted above, these fraudulent organizations are hidden inside of the massive complexities of the lead generation ecosystem. Therefore, it is extremely difficult for any individual school or lead generation company to uncover and stop these kinds of atrocities, but something must be done! Therefore, in the opinion of this author, it will take a nationally coordinated campaign by educational institutions and their lead generation partners if there is any chance of eliminating these unscrupulous actors. And, if the private sector does not step up and police itself, someone else will, and everyone gets hurt in the process.
Federal Trade Commission. (2018, September). Retrieved from https://www.ftc.gov/system/files/documents/reports/staff-perspective-follow-lead/staff_perspective_follow_the_lead_workshop.pdf
FTC Takes Action against the Operators of Copycat Military Websites. (2018, September 6). Retrieved from Federal Trade Commission Website: https://www.ftc.gov/news-events/press-releases/2018/09/ftc-takes-action-against-operators-copycat-military-websites
Jennifer Romesser, P., Head, D., Richins, LCSW, D., Molesky, J. E., & Griffiths, D. B. (n.d.). FROM COMBAT TO CLASSROOM – Understanding Student-Veterans & Servicemembers. Retrieved September 15, 2018, from https://www.uccs.edu/Documents/military/From%20Combat%20to%20Classroom.pdf
Marketing, T. M. (n.d.). (G. Thorup, J. Alexander, B. Kofsky, A. Hoilet, D. Seaberry, T. Greeley, & S. Alexander, Eds.) Retrieved from www.mdtmarketing.com
United States of America (For the Federal Trade Commission), Plaintiff, v. Sunkey Publishing, Inc., a corporation; Sun Key Publishing, LLC, a limited liability company; WhereData, LLC, a limited liability company; Fanmail.com, LLC, a limited liability com (Northern District of Alabama September 6, 2018). Retrieved from https://www.ftc.gov/system/files/documents/cases/sunkey_filed_complaint.pdf