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We wanted to bring some recent news to your attention because it could affect certain advertising campaigns across the lending industry. Earlier this year, Facebook agreed to change the way advertisers can use filters in industries like credit, lending, and housing. We wanted to make sure our partners are aware of this change.
What Is Facebook Changing?
Facebook has changed the way certain filters can be used to refine audiences for paid advertisements on their platform in industries sensitive to discrimination. Filters based on age, gender, and ZIP code are no longer available for advertisers in the credit industry. “Lookalike Audiences” and other detailed targeting features which may include demographics, behaviors, or interests have also been disabled.
Why Is Facebook Doing This?
Facebook has been in hot water for years due to lawsuits by civil rights groups accusing the social network of allowing advertisers to exclude certain protected groups on its platform. After initially fighting these lawsuits for multiple years, Facebook has now settled, and these changes to their platform are part of that settlement. The specific changes fall under the Equal Credit Opportunity Act (ECOA) which requires that creditors not discriminate based on race, gender, or other protected classes. Essentially, Facebook acknowledged that certain location-based targeting and other filters could be used, whether intentionally or otherwise, to exclude certain protected groups. Rather than fight a prolonged legal battle, Facebook agreed to build a separate advertising portal for businesses in credit, housing, and other protected industries. The new portal restricts problematic filters from use in these industries.
What About LeadsMarket?
At LeadsMarket, our marketing platform allows the selection of some data parameters that are similar to Facebook’s advertising tools. We want you to see leads that are closely aligned with your underwriting requirements, so we are not disabling our data parameters at this time. Since LeadsMarket has an industry-leading compliance team and we carefully vet all of our partners, we believe lenders in our network are operating within ECOA guidelines. Our data parameters will remain on our platform, but we encourage all of our partners to be as inclusive as possible when setting campaign parameters. Lead buying should be just one of several strategies for customer acquisition, so certain restrictive selections from a lead provider should be offset by other more inclusive strategies. We urge all our partners to understand discriminatory action and to pay particular attention to “disparate impact” discrimination. In other words, if you are selective with data parameters, make sure they are not being used in a manner that could result in unintended discrimination against any protected class. Talk to your legal counsel to be sure your use of data parameters is appropriate under federal and state law. And look at your customer demographics (information we do not see) to ensure you are not unintentionally avoiding certain protected classes.
What is “Disparate Impact” Discrimination?
“Disparate impact” is a tool used in discrimination lawsuits that enables plaintiffs and prosecutors to attack discriminatory practices that may not be intentional. Disparate impact means that a plaintiff doesn’t need to prove that a company is intentionally excluding a certain protected class from their services. It only needs to prove that the company’s business practices have a discriminatory effect. If you utilize targeted marketing, it can be a useful strategy for connecting with your desired customer base, but it may also be unintentionally excluding certain protected classes, landing you in hot water with regulators. This is the core reason why Facebook adjusted its filters to stop disparate impact discrimination from occurring on their platform. We urge you to keep in mind the concept of disparate impact discrimination, so you can avoid potential legal liabilities. Make sure the totality of your marketing, and the demographics of your customer base, avoid intentional or unintended discrimination.
Whenever Facebook, Google, or another big player in the online marketing industry makes a big shift in the landscape, you can count on LeadsMarket to keep you in the loop. Our team of optimization experts is always keeping their ear to the ground for any developments, so we’re ready to adjust things as needed to keep campaigns running smoothly and performing at a high level. If you have any questions or concerns about our data parameters, please don’t hesitate to contact your account manager. They can even help you schedule a meeting with our Compliance Team if you’d like a more insight into disparate impact discrimination and how to avoid it.