Consumers must be protected from misleading tactics and false promises of rooftop solar lead generators. Lead generators make it easier for companies to target customers with fraudulent products promising energy savings. The FTC has started to take notice and is looking to crack down on the practice.
Congress, administration should look at ties between rooftop solar and lead generators
As a long time supporter of the renewable energy industry, I continue to be pleased about the expansion of renewable fuels that contribute to the reduction of our carbon footprint. Around my home state of California, and all across the nation – especially in the West, where sunshine is abundant – the proliferation of rooftop solar can be seen in almost every residential neighborhood. This is a good thing.
However, the rapid deployment of rooftop solar panels has also led to the rapid expansion of an industry – known as lead generators – that is often rife with consumer fraud. Lead generators are a type of business that function exactly as their name indicates: generate leads for businesses looking to aggressively grow their customer base. Lead generators can interface with the public through multiple avenues, including online, in person or over the phone. In practice this means they generate business for industries by knocking on people’s doors, sending fliers in the mail, generating telemarketing phone calls or pop-up advertisements on popular websites.
In the case of rooftop solar, lead generators often offer customers promises of significant savings on their electric bills, access to government loan programs, or other offers that require a quick decision in order to take advantage of a special offer. The problem is, apparently many of these promises are misleading, and can pressure customers to make a decision that is against their own financial best interest.
It is known that rooftop solar is a prime target for the lead generation industry. The upcoming lead generation convention in Las Vegas later this month has a panel on “How to Maximize Your Returns from Solar Leads” and the organizers entice industry participants by promising that the “The solar boom is well underway.” But consumer advocates and investigative journalists have sought to expose this business relationship. A recent article in the The Salt Lake Tribune, found examples of lead generators calling on behalf of the: “Utah Public Utilities Commission — a nonexistent entity that could be mistaken for the Utah Public Service Commission.”
While most Americans have never heard of the lead generator business, the federal government is aware of the industry and the Federal Trade Commission (FTC) – whose official mission is “Protecting Americas Consumers” – has weighed in with serious concerns and taken actions against the industry. The FTC watches lead generators closely, because they have been at the forefront of many consumer fraud issues, including pressuring people to take loans that led to the mortgage crisis. Just last year, the FTC brought a federal action against a telemarketing firm in California that was targeting millions of Americans on the national Do Not Call Registry. The FTC is so concerned about lead generators, that late last year it produced a report looking at: “some of the consumer protection concerns…complexity and lack of transparency, aggressive or possibly deceptive marketing, and the potential misuse of consumers’ sensitive information.”
Lead generators are typically paid on commission, therefore incentivized to be very aggressive (e.g. ignoring the Do Not Call Registry) to close the deal. These tactics can generate near-term profits for rooftop solar companies, but they can sometimes lead to consumer abuse.
In the same The Salt Lake Tribune article, a representative of the rooftop solar industry explained that ethical rooftop solar companies reject this type of behavior by lead generators. He went on to say that anytime there is a rapid expansion in rooftop solar, that there will be: “a handful of unscrupulous people who are trying to take advantage of people’s ignorance.” The rooftop solar industry also has websites where consumers can go to learn more about rooftop solar and learn how to avoid scams. This is also good and the industry should be commended.
However, lead generators don’t actually sell solar panels – they only sell their leads to interested rooftop solar panel companies. This allows the rooftop solar industry to, on the one hand, decry the actions of lead generators – many of whom operate overseas – but on the other, buy those leads to try and make a sale.
We need government intervention to put an end to bad practices associated with the lead generation business – especially as it relates to rooftop solar. I urge Congress and the Administration to look into this matter, and identify ways to protect consumers. We cannot allow either the rooftop solar industry or the lead generator industry to act with impunity.
Ron Dellums represented California’s 9th District in the United States Congress from 1971–1998, and served as Oakland Mayor from 2007-2010.