Introduction

The Australian internet is saturated with advertising, with investment in online marketing for the 2025 financial year totalling $17.2 billion, a 10% increase from the previous year. Within this environment, lead generation has emerged as a process for identifying potential sales targets and harvesting their contact details. While it may appear as a simple ‘eligibility check’ for rebates or comparisons, it often involves capturing and selling consumer data to third-party businesses. Unlike traditional marketing, lead generation operates within a complex ecosystem of marketers and data brokers, often obscuring the link between the advertisement and the end seller. This practice can manufacture a false appearance of ‘consent’, circumventing protections in the Australian Consumer Law (ACL) and anti-hawking regulations.

Consumer harms associated with lead generation

Lead generation can result in significant financial detriment. A prominent example is the collapse of the First Guardian and Shield Master Funds, where approximately 11,000 Australians lost more than $1 billion after being referred by lead generators to high-risk schemes. Some individuals lost more than $1 million. Consumers are often pressured into making unaffordable purchases, sometimes involving linked credit like Buy Now Pay Later arrangements, which deepens financial stress. Psychological impacts are also severe, as high-pressure sales tactics create feelings of manipulation and privacy violation.

Data exploitation is a persistent risk. Consumers rarely understand that their information will be sold to multiple entities, leading to endless contact from unknown businesses. This harvested data creates pathways for identity theft and fraud. Furthermore, there is a strong link between lead generation and the sale of substandard products. In the solar industry, poor installations have been reported, posing physical risks. Lithium-ion batteries have become a significant fire risk in Western Australia, with incidents occurring almost every second day.

Current regulatory framework

Regulation is currently fragmented across several agencies. The Australian Competition and Consumer Commission (ACCC) holds primary responsibility for enforcing the ACL, while the Australian Securities and Investments Commission (ASIC) oversees equivalent laws for financial products. The Office of the Australian Information Commissioner (OAIC) manages privacy, and the Australian Communications and Media Authority (ACMA) handles telemarketing and spam. However, lead generators often exploit gaps in these laws by manufacturing ‘invitations’ for contact, thereby avoiding the ‘unsolicited consumer agreement’ provisions of the ACL. Proving breaches often requires meeting a high evidentiary threshold, and the dispersed nature of regulation creates overlaps that unscrupulous operators exploit.

Key issues identified

Deceptive design is frequently used to steer consumers into agreeing to contact. Online forms may mimic government branding or use time-limited offers to pressure users. This ‘manufactured consent’ involves vague language about ‘partners’ that prevents meaningful understanding of future contact. This conduct is systemic, with an entire industry existing solely to capture and on-sell details. The industry’s opacity makes it difficult to quantify its size or for consumers to exercise privacy rights, such as opting out. Furthermore, lead generation disproportionately impacts vulnerable groups, including people on lower incomes, those with disabilities, and First Nations communities, who may be specifically targeted through data cross-referencing.

Proposals for regulation

The report proposes a multi-faceted regulatory response. Firstly, lead generation should be banned in high-risk sectors where it causes systemic harm, such as superannuation, life insurance, debt management, and sectors involving government rebates like solar power. These bans would provide clear boundaries for acceptable conduct. Secondly, the forthcoming Unfair Trading Practices (UTP) prohibition should be expanded to cover financial products and services, explicitly naming manipulative lead generation in its ‘grey list’.

Thirdly, digital platforms should be required to vet advertisers and maintain public registers of lead generation ads, similar to requirements under the Scam Prevention Framework. Regulators should also be granted stronger takedown powers. Finally, consent and disclosure requirements must be strengthened. This includes aligning practices with First Nations Data Sovereignty principles and uplifting standards to ensure consent is voluntary, explicit, and specific. Businesses purchasing leads must be held legally responsible for ensuring those leads were sourced legitimately.

Recommended approach

The Consumer Action Law Centre recommends a combination of immediate and ongoing reforms. Immediate priorities include the sector-specific bans and the expansion of UTP laws to close existing loopholes. Ongoing systemic reforms should focus on regulating digital platforms and strengthening the broader privacy framework. Addressing lead generation requires a coordinated effort across multiple agencies and legislative changes to ensure that businesses cannot profit from misconduct while avoiding the consequences. Implementing these reforms will require increased resourcing for the ACCC and other regulators to support effective compliance and enforcement.