Two Out of Five Leads You Buy Might Not Be a Person
Rich Kahn runs Anura, a company whose entire business is detecting fake traffic. Last week on Eric Troutman’s Deserve to Win podcast, he put a number on the lead generation industry that should stop every marketing director in mortgage cold: up to 40 percent fraud. Two out of every five leads sold in the market, by his estimate, generated by a click farm, a bot, or some other method that has nothing to do with a human being wanting a mortgage.
Let me be careful with that number. It comes from one vendor who sells fraud detection, and “up to” is doing real work in that sentence. I have no way to verify it across the industry. But I’ve been buying, selling, and auditing leads for more than twenty-seven years, and I’ll tell you what I do know: nobody who has actually looked under the hood of a purchased lead file was surprised by it. If even half of Kahn’s number is right, one in five leads you paid for this quarter was never going to close, because it was never a person.
Here’s the part I want to spend the rest of this post on, because I think most of the industry is about to draw the wrong conclusion.
Fraud is not a separate problem from signal degradation. It’s the same problem, further along.
In March, I wrote that the real vulnerability the trigger-lead ban exposed wasn’t the loss of a lead source. It was that most lenders had built their acquisition around velocity, and velocity-optimized acquisition degrades. The signal gets weaker every year: more lenders bidding for the same consumer, more intermediaries between the consumer and you, less connection between what the consumer wanted and what landed in your CRM.
A fraudulent lead is what that curve looks like at the bottom. It’s a lead with zero signal. The consumer didn’t raise their hand. There was no consumer. The form was filled by a script because someone in the supply chain gets paid per record, and a record is a record.
That’s why I don’t think the answer is “buy a fraud filter.” A filter helps, and I’d recommend one to any lender still buying volume. But a filter treats the symptom. The lender who adds fraud detection to a rented pipeline is still renting. They’ve just paid a second vendor to tell them how much of the first vendor’s product is garbage.
Rented pipelines can be gamed. Owned ones can’t.
Think about what it would take to defraud an Owned Pipeline.
The Awareness layer is a lender showing up with a point of view, consistently, in their own voice, to an audience that recognizes their name before there’s a credit pull. You cannot get a bot to read a lender’s content for six months and then decide it trusts them.
The Capture layer is first-party consent, on your own property, documented by date, channel, and scope. A click farm can fill out a form on an aggregator’s site. It can’t build a relationship with you on yours, because there’s no per-record payout for doing it.
The Nurture layer is the follow-up with people who already engaged and didn’t fund yet. In the data we see, 50 to 60 percent of them become fundable later. You know these people are real. They’ve been in your CRM for eight months.
None of that is fraud-proof because of clever technology. It’s fraud-proof because there’s no economic incentive to fake it. Fraud follows the money, and in a rented pipeline the money is paid per lead, to a stranger, before anyone has verified the lead is a person. In an owned pipeline, nobody gets paid until a real consumer does something real.
The compliance side of this is worse than the cost side.
Troutman’s line on the episode was that if you’re buying leads you’re buying risk, and he means it literally. A fraudulent lead isn’t just a wasted contact. It’s a phone number that may belong to someone who never consented to anything, dialed by your team, under your name. That’s a TCPA claim before you’ve made a single loan. And the standard is tightening whether or not the FCC’s revoke-all rule lands on its January 31, 2027 date. It has been pushed twice and may change shape again, but the pieces already in force, honoring any reasonable opt-out and processing it within ten business days, plus courts treating a “Stop” to a text as revoking consent for calls too, mean a bad number is already a liability that follows you across channels.
I’m a member of R.E.A.C.H., and Troutman pointed out on the same episode that R.E.A.C.H. members are the working proof that legal lead generation can be done profitably. I agree. But I’d go one step further. The lenders who are safest right now aren’t the ones with the best vendors. They’re the ones who’ve reduced how much of their pipeline depends on a vendor at all.
What I’d actually do with this number.
Don’t panic and don’t cancel every lead contract this week. Maybe go ahead and try these three things.
Pull your last 90 days of purchased leads and look at contact rate, not conversion rate. A lead that was never a person doesn’t answer the phone.
Take whatever you’re spending on the worst-performing source and move a small part of it into Nurture. Re-engage the people already in your CRM who didn’t fund on first contact. They’re real, they consented, and one lender we worked with returned ten to one doing exactly this.
Start the Awareness layer now, even small. It’s the only part of the pipeline that gets cheaper over time, and it’s the only part a click farm can’t touch.
The trigger-lead ban was six months ago. Most of the industry replaced the source. If Kahn is even close to right, a lot of what they replaced it with isn’t real. The question isn’t which vendor to trust. It’s how much of your pipeline you actually own.
Sources
- TCPAWorld / Troutman Amin, LLP, “Deserve to Win Ep. 48: Lead Generation Industry 40% Fraud??? So Says Guest Anura CEO Rich Kahn,” August 31, 2026
- Anura (anura.io), ad fraud detection; Rich Kahn, CEO. Tag Anura and Rich Kahn on LinkedIn.
- Eric J. Troutman, Troutman Amin, LLP. Tag on LinkedIn.
- R.E.A.C.H. (Responsible Enterprises Against Consumer Harassment). Tag on LinkedIn.
- FCC Consumer and Governmental Affairs Bureau, Order DA 26-12, January 6, 2026 (revoke-all waiver extended to January 31, 2027; FCC Further Notice of Proposed Rulemaking, October 2025, on modifying the rule)
- TCPAWorld / Troutman Amin, LLP, “Court Holds A ‘Stop’ Request to a Text Message May Revoke Consent For Both Calls and Texts,” August 13, 2026
- iLeads Revive twelve-month re-engagement case data (TCG partner)