New FCC Rules Will Force Home Improvement Industry to Adjust Business Practices

On December 13, the Federal Communications Commission (FCC) adopted new rules it claims will further protect American consumers from unwanted robocalls and robotexts.

When these regulations take effect—likely in the first half of 2024—home improvement industry lead aggregators and the contractors and consumers using their services will be impacted by the changes.
 

What Are the Regulations?

Under the new rules, comparison shopping websites, or lead aggregators, will be required to obtain consumer consent to receive calls or texts one seller at a time. This rule aims to eliminate occurrences of consumers receiving unwanted robocalls or robotexts from multiple companies that paid lead aggregators for homeowners’ contact information without direct permission from the consumer.

Further, the FCC can “red flag” suspicious phone numbers and require mobile carriers to block texts from those numbers. It will also be illegal to send marketing text messages to phone numbers on the National Do-Not-Call Registry.

“We make clear that any company that wants to use robocalls and robotexts in their businesses obtain consent one-to-one,” said FCC Chairwoman Jessica Rosenworcel in her official statement on the rule. “That means consumers get back the power to pick who they want to communicate with and when.”
 

Who Will These Rules Impact Most?

Larger lead aggregators with more resources are likely to adjust sooner and more successfully than smaller businesses providing similar services. Many of these businesses have already taken to social media to declare their intent and ability to adjust to the new rules.

It may be more detrimental to smaller mom-and-pop contractors that rely heavily on third-party lead aggregators.

Attorney Heather Macklin believes that regulations like these generally disproportionately impact smaller contractors because lead costs will go up.

“Smaller local contractors do not have the spending power that the bigger contractors have,” says Macklin. “Those contractors may no longer be able to afford to work with lead aggregators they’ve worked with in the past.”

Macklin also suspects the rules will have the unintended consequence of restricting consumer choice, or at the very least making consumers work harder to find multiple bids.

“This regulation was adopted to protect consumers from abusive practices,” says Macklin. “But what it's also going to mean for a lot of consumers is they no longer are going to have access to some of the small contractors who they might have otherwise been referred to.”

She adds that “if a person wants to interview two or three plumbers or two or three HVAC companies to get a problem fixed, they now have to do more work as a consumer to find those options.”

NEWPRO Home Solutions Chief Operating Officer Ryan Spar shares Macklin’s belief that local contractors will feel the brunt of the fallout from these new laws.

"We think companies like NEWPRO, with scale, size, and the ability to cover a massive territory, will be less impacted by these rules,” says Spar. “It may be more detrimental to smaller mom-and-pop contractors that rely heavily on third-party lead aggregators."