My lead source – a term used freely among brokers nowadays – is also known as a backdooring data source via a lender or lead generation company. It seems to be more relevant today than ever before. The Merchant Cash Advance (MCA) industry continues to shoot itself in the foot. Granted, this issue of backdooring has been around for years, however, according to several brokers and lenders FinTalkNow (FTN) has spoken to, the problem has risen exponentially over the last few years. This practice involves lenders or employees within lending companies sending unauthorized data to others, mainly Independent Sales Organizations (ISOs), in exchange for monetary gain via commission revenue share or sale per package. This unethical behavior threatens the integrity of the industry and poses serious risks to businesses and their clients.
An anonymous source recently revealed troubling insights into this pervasive issue during his recent experience. He worked for two ISO broker shops, one in New York City and another in Miami, and the source confirmed that both operations are actively purchasing leads from high-risk lenders. Their “lead source” is re-routing packages to brokers within hours of getting the submission from others. “It’s a chaotic cycle of clients and their data being shared non-stop.”
"Many brokers purchase to have access to full packages being sold from various lenders and so-called lead generators located in NYC and Miami," the source disclosed. "The funny thing is, the brokers who are buying this data seem entirely naive with their data by protecting it, putting into motion higher security when submitting their files, claiming leaving the phone number and email off the applications will stop others from re-selling files they already purchased along with 5-6 others. All of them are doing the same thing, they buy a package, take the information, and run a public record search on the merchants online. Hypocritical at the highest level.”
For legitimate lead generation companies and ISOs that invest significant resources into marketing to obtain leads, the practice of backdooring is particularly concerning. These companies spend thousands of dollars to generate genuine leads, only to have their efforts undermined by unscrupulous brokers and lenders. This trend not only damages individual businesses but also tarnishes the reputation of the entire MCA industry.
The need to address backdooring is urgent, as it harms the industry's growth and credibility. Instead of advancing the "fintech lending" sector, the industry is being held back by lazy and uncreative brokers and lenders who prefer shortcuts over ethical business practices. To foster a healthier and more innovative environment, the MCA industry must take decisive action to eliminate backdooring and promote integrity and transparency in its operations. By doing so, the industry can move forward and regain the trust of businesses and clients alike.
Are you interested in leaving us a tip or news lead? Email us at Team@FinTalkNow.com and you will remain anonymous.
