marylsommers: Been on a price comparison website? Wait for the cold call

Financial advisers and brokers will pay up to �50 for the personal details you've given. It means thay can ring and try to sell you something

You've been thinking about getting a new mortgage, or taking out some life insurance or a loan, so you key your details into a price comparison site. You may not realise it, but your personal information ? name, phone number, email address ? is about to be auctioned off to the highest bidder, and you have now become a valuable "lead" that will be bought by a financial adviser or broker.

You might know little or nothing about that adviser or broker, or whether they are any good, but they could be looking to make as much money as they can by flogging you as many financial products as possible. And because they have paid good money for your details, they won't give up easily. Is your phone ringing right now? That will be them ...

As more of us search for financial products online, this scenario is likely to become increasingly commonplace. For most of us, the web is our first port of call when shopping for a mortgage, insurance policy or pension plan and want to get a flavour of what's available. It often takes just minutes to key your details into one of many comparison websites.

While some who do this will be fully expecting someone to contact them to help them find the right product, others may have simply wanted a quick online quote, and not realised that by clicking to receive advice from an adviser they are agreeing to have their details sent to a third party. Ticking the box saying you don't want contact from third parties will not override this.

One financial boss told Guardian Money he believed many consumers would be "shocked and surprised" to learn that their personal details are being sold off to the highest-bidding third parties by sites such as Moneysupermarket.com and BeatThatQuote.com, which was snapped up for �37m last month by the mighty Google.

Ray Black reckons that if people knew just how much money some advisers and brokers are prepared to pay for these leads ? perhaps �40 for someone who is looking at getting a new mortgage, or �50 for someone interested in equity release ? then "they might think twice about allowing themselves to be contacted".

Money found that some lead-selling companies are boasting about the "massive" commissions and fees advisers can pocket by selling people lots of products "for years to come".

For some film fans, this will sound reminiscent of the 1992 US film Glengarry Glen Ross, starring Al Pacino, Jack Lemmon and Ed Harris as real estate salesman desperate to get their hands on the mythical "Glengarry leads" (the details of the most promising potential customers) and resorting to underhand tactics to pull off a sale.

However, buying and selling leads is a real and legitimate business and there are lots of players out there, including Paaleads.com, owned by Moneysupermarket.com, and FinanceLeadsOnline, a subsidiary of BeatThatQuote.com, which also gets its leads from the sites of partners such as Argos and Yahoo. Others include Leadbay, Leadstore, Lead Magpie and Lead Co-op.

Some people won't be aware that many independent financial advisers and mortgage brokers get a chunk of their business from buying leads from comparison sites and other firms.

Some companies spend thousands of pounds a month on buying leads. There is nothing wrong with that ? for many firms, this is clearly an effective way of accessing people interested in the products they specialise in.

What a firm will pay will vary greatly; it depends on who is offering it for sale and what sort of lead it is (regular mortgage/buy-to-let mortgage/life insurance/pension etc). Some leads are sold for a fixed price, while others are entered into eBay-style auctions.

Most leads don't convert into sales. For example, Paaleads.com, which describes itself as "the exclusive retailer of leads from Moneysupermarket.com", says on its website that its average "conversion rate" is "two in 10" or 20%. So an adviser would typically have to buy five leads to make one sale.

With each Paaleads life insurance lead costing around �45, that conversion rate suggests the adviser would have to cough up around �225 (five lots of �45) to pull off one sale, claims Ray Black, who runs Money Minder (money-minder.com), a life assurance and protection comparison site which does not buy or sell leads.

That in turn suggests that the adviser has to earn at least �225 in fees or commission from selling to that "good" lead, simply to break even. If that "good" lead is you, would you be comfortable about that?

Some websites are remarkably upfront about how much advisers could earn. On the frequently asked questions of the Paaleads site, under the heading "Is it true I can make a lot of money?", it says: "Yes. Those buyers that really embrace this business methodology, and who understand the importance of contacting the customer quickly every time can make a massive return on the investment.

"For example, a mortgage intermediary [aka broker] can typically earn over �1,000 per mortgage client; frequently it can be �2,000 if they charge a fee [for advice], as well as earning the procuration fee [commission from the lender] and fees off the peripheral sales, such as life assurance, buildings insurance and payment protection.

"Ten mortgage leads bought at �40 each producing three sales, will yield �3,000 on a spend of �400. Three sales should generate at least one further sale from referrals, hence an earning of �4,000 for a spend of �400."

Another firm, UK Life Leads, says on its website that batches of 50 life insurance leads are available for �1,500. It adds: "You will, of course, have the opportunity to retain your exclusive customer for life, and up-sell and cross-sell financial services to your heart's content."

If you have been getting the hard-sell from a salesperson after keying your details into a site, the reason may be that they paid a lot for your lead.

"Brokers who have paid out to buy leads are unlikely to give up easily," says Black. "Having invested money in getting a customer's contact details, they will be tenacious in achieving a sale. Over the last two or three years, times have been tough for individuals and advisers alike. This, potentially, puts a huge amount of pressure on advisers to sell, to make sure they make a profit out of the leads they are buying, and on individuals due to the constant communications."

Some websites carry detailed price lists for their leads. FinanceLeadsOnline's start at �2-�3 each for some mortgage, loan and Isa leads, rising to �40 for life insurance, �50 for equity release and �60 for Sipp (self-invested personal pension) leads.

David Hollingworth at mortgage broker London & Country ? which buys leads "from time to time" ? has some concerns about those being sold off to the highest bidders. "Someone charging a big fee for advice may well be prepared to pay more for a lead than someone charging a reasonable fee, or no fee," he adds. That's because, for a broker charging a big fee, their potential earnings on every case converting into a sale will be much bigger.

Moneysupermarket.com says its website clearly states that, for example, when someone requests a call from a mortgage adviser, it gets paid by charging the adviser a fee. In other words, users are giving permission for their details to be sold to third parties, it says. Dean Jones, head of Paaleads.com, adds that users are instantly emailed and texted the details of the adviser who will contact them.

Commenting on our example above, Jones says the life insurance conversion rate is "more like 40%," and adds that, for every 10 leads bought by an adviser, one or more may be invalid, for which the adviser will be refunded. He says this would affect the maths for the example we gave.

Rupert Jones

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