Why Do-Not-Call Will Lead to Do-Not-Mail

In today’s Wall Street Journal, Jennifer Levitz and Kelly Greene report on lead generation firms (also known as list brokers), companies that sell databases of consumer information to businesses for marketing purposes:

Older Americans around the country are getting duped by a seemingly innocuous tactic that can expose them to hard-sell pitches from the insurance industry.

The technique is centered on a marketing tool called the lead card, and it became popular after the federal government created its Do Not Call Registry in 2003 to shield consumers from unwanted solicitors. Sent through the mail, the lead card invites the recipient to mail off an enclosed reply for free information about, say, estate planning.

But the cards fail to warn that by sending off replies, recipients are giving up their right to avoid telephone solicitations from the sender — even if their phone numbers are on the Do Not Call list.

And guess who calls? Scammers:

State regulators say insurers are using the cards to peddle investments unsuitable for seniors, including so-called living trusts that may provide no benefit and annuities that come with steep surrender charges and lengthy payout deferrals.

A case in point is Jeanne Blom, an 81-year-old widow in Minneapolis. A retired office-building cleaner, Mrs. Blom years ago transferred the deed of her house, worth $135,000, to her son, placed his name on her checking account and made him the owner of her 1990 Buick LeSabre. The rest of her assets were valued at far less than $20,000, which under Minnesota law would allow her son to collect them without probate, according to Charles Roach, her attorney. In any case, the probate fee in her county is only $250.

Yes, the narrowing of the phone as a vector for marketing has increased mail marketing. A few years ago, the volume of junk mail sent through USPS exceeded that of ordinary, first class mail. This year, at least a dozen states introduced do-not-mail legislation. The aggravation caused by more and more junk, combined with the frauds against a growing elderly population, will result in serious consideration of do-not-mail. All it’s going to take is a few more incidents like these:

‘Fear Factor’

ChoicePoint internal emails used as evidence in the case showed it was mailing more than a million lead cards a year and charged insurers as much as $35,000 per order for the mass mailings, including one in 2003 alerting older adults to a “new” AARP study on probate taxes. The study was then actually 14 years old, was done before a change in federal probate laws and, according to AARP, no longer represented its views. In internal emails, ChoicePoint employees attributed the cards’ success in generating responses to their “fear factor” and described response rates that “tumbled” when AARP’s name was temporarily removed from mailings.

ChoicePoint’s spokesman says the “business practice” described in the settlement began before ChoicePoint bought its lead-generator unit in 2003, and that ChoicePoint stopped using AARP references after last year’s settlement.

AARP has a similar complaint pending against America’s Recommended Mailers and American Family Prepaid in U.S. District Court in Durham, N.C. AARP alleges that America’s Recommended Mailers uses cards that appear to come from AARP to generate leads sold to American Family and others. America’s Recommended Mailers has denied the claim. American Family said in a court filing that it bought lead cards on “good faith” belief that the cards didn’t violate laws.

North Carolina court filings against American Family say “deceptive” mailers enabled the company’s agents to visit 2,000 North Carolina residents over age 65 in their homes in 2004 and 2005. The state says they bought $4.2 million in living trusts and millions of dollars in equity-indexed annuities that were unnecessary and unsuitable.


  1. So what’s a proposed solution, if there is one? If the Democrats win, will they turn populist to revert some of this predatory business climate?

    Older Americans are routinely looked on as piles of money to be vacuumed up; smart operators everywhere know this. Phrma and the health care industry have figured this out a while back; we accept that progress in the form of longevity has a price that the elderly pay, regardless of the attendant quality to the longevity.

    Why? Why is the information that listbrokers traffic in considered their information?

    If I don’t want the government keeping undue records on me (nothing but the most essential), why would I NOT care that boiler room operators have it?

  2. It’s funny Ted, because the libertarians say the opposite–they don’t care if the private sector has personal information, but they do care about the gov’t! In polls, however, most Americans express privacy distrust in equal portions against gov’t and private-sector collectors.

    Several years ago, my old non-profit was involved in a lawsuit that tried to frame personal information as property, so that a list broker’s collection of your data would be in effect an appropriation of your identity. It failed…

  3. ChoicePoint… ChoicePoint… Now where have I heard that name before?

    Oh, that’s right — they’re the company hired by Jeb Bush and Katherine Harris to purge voter rolls in Florida for the 2000 election.

  4. Choicepoint didn’t actually do it–it was a company called DBTonline that was acquired by Choicepoint in 2001, I think.

  5. Aside from identity theft and scammers, junk mail is also just a horrible waste of natural resources. I also am waiting for the Do Not Fax. Unlike junk mail and calling, faxes actually cost me my own money with the toner and paper.

  6. War Lord of Mars

    Why is everything a scam? Why don’t you tell us what your vocation is, it sounds like a scam to me. What is a big commission? Is 9% one time pay for lifetime service huge? Buy a mutual fund pay 3% for ten years. Do the math. What is the surrender charge with other products? Thats right, who knows?
    20%? 2002 stocks lost 40 to 70%. Why is that product
    appropriate. Who should be able to contact seniors? Only your approved list? Only predatory banks with 30% interest credit cards? Wall Street? They have a real good track record. I think your blog is in denialism.

  7. Yeah, you’re making my point! Pretty much all commerce is a scam, it’s just a matter of degree.

  8. chaos_engineer

    Is 9% one time pay for lifetime service huge? Buy a mutual fund pay 3% for ten years. Do the math.

    9% of 3% of what for whose lifetime over which 10 years? The only math I can do with what you’ve given me is 9+3+10=22.

    I do understand that you’re trying to communicate something, but you need to slow down a little. Take your time and proofread; the Internet isn’t going anywhere!

    As to the question of who should be able to contact seniors: In a perfect world, we’d only be contacted by friends, family, and people responding to advertisements that we’ve placed.

    So, for example, people shouldn’t be sending bad investment advice to seniors. Seniors who want bad investment advice should do a Google search on “investment fraud” and then visit the appropriate websites.

  9. JYB:

    Fax spam is already illegal. As it happens, there was at one time a move afoot to get email spam included under the same law as fax spam, but it never made it into whatever fiasco Congress finally passed.

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