President Joe Biden’s administration on Monday touted its efforts to crack down on aggravating company practices of making customers wait on hold and jump through hoops to cancel subscriptions.
The “Time Is Money” initiative is an array of proposals, including a pending regulation, that the administration says will save consumers money and also cut down on “general aggravation” resulting from deliberately poor customer service.
Advertisement
“The administration is cracking down on all the ways that companies — through paperwork, hold times and general aggravation — waste people’s money, waste people’s time,” White House domestic policy adviser Neera Tanden told reporters on Friday.
“For example, you want to cancel your gym membership or subscription service to a newspaper,” Tanden said. “It took one or two clicks to sign up, but now to end your subscription or cancel the membership, you have to go in person or wait on hold for 20 minutes.”
President Joe Biden has made cracking down on “junk fees,” such as processing payments that are excluded from advertised prices, a centerpiece of his economic agenda. The new proposals are an effort to burnish Democrats’ image as consumer champions at a time when the economy has been a major advantage for Republicans thanks largely to high inflation.
Like any administrative action not built on new laws, however, the policies could be subject to a quick reversal next year, either by a Republican president or Republicans in Congress.
Advertisement
The centerpiece of the initiative is a draft rule, introduced by the Federal Trade Commission in March of last year, aimed at requiring companies to make it as easy for customers to cancel services as it was to sign up, such as by using the same website with the same number of steps. And consumers would be allowed to refuse to even hear about additional offers.
The White House said the Federal Communications Commission will launch an inquiry into whether to extend the proposed rules to phone companies.
The original “click to cancel” rule, if finalized, would build on an existing regulation of “negative option” marketing in which sellers take a customer’s silence as willingness to continue paying for a service. The proposal has seemingly stalled in the regulatory process amid industry criticism.
Other new elements of the “Time Is Money” package include a public demand that health insurance companies allow patients to file claims online, instead of requiring paper forms, and a new rule from the Consumer Financial Protection Bureau that would force companies to let customers press a single button to talk to a human being when they call for service.
“Essentially, in all of these practices, the companies are delaying services to you or really trying to make it so difficult for you to cancel the service that they get to hold on to your money longer and longer,” Tanden said. “These seemingly small inconveniences don’t really happen by accident. They have huge financial consequences. Really are just taking advantage of the fact that people are really busy.”
Advertisement
