Topline
The White House on Monday outlined a new initiative that intends to make it easier for customers to cancel subscriptions, get refunds and resolve customer service complaints—a move that follows the Biden administration’s earlier crackdown on so-called “junk fees.”
The Biden administration’s new rules intend to crack down on “all the ways that corporations…add … [+]
Key Facts
The White House said in a statement it is collaborating with federal agencies to help crack down on ways firms ”add unnecessary headaches and hassles to people’s days and degrade their quality of life.”
As part of the push, the Federal Trade Commission is finalizing rules to make it easier for customers to cancel unwanted subscriptions and memberships by requiring companies to make canceling as simple as signing up.
The White House also intends to crack down on so-called customer service “doom loops,” where customers are forced to deal with automated voice responses and a “maze of menu options” before being able to reach a live customer service agent.
New rules by the Consumer Financial Protection Bureau (CFPB) will eventually require companies under its jurisdiction to offer customers the option to reach a human customer service agent with a single button press.
The Federal Communications Commission will also conduct an inquiry into placing similar requirements on phone, internet and cable companies—while the Department of Health & Human Services and Labor Department will “call on health plan providers” to do the same.
The FTC is also finalizing a new rule to prevent marketers from using fake reviews and hiding honest negative reviews to boost their products—while the CFPB is working on proposals to get rid of “ineffective and time-wasting chatbots” deployed by banks and other financial entities “in lieu of customer service.”
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Crucial Quote
The White House criticized tactics of “excessive paperwork, hold times, and general aggravation” used by companies, and adds: “Americans know these practices well: it’s being forced to wait on hold just to get the refund we’re owed; the hoops and hurdles to cancel a gym membership or subscription; the unnecessary complications of dealing with health insurance companies; the requirements to do in-person or by mail what could easily be done with a couple of clicks online; and confusing, lengthy, or manipulative forms that take unnecessary time and effort.”
Key Background
In March, the Biden administration announced rule changes to tackle the issue of “junk fees.” This included capping the average fee for most late credit card payments at $8, down from $32, along with a proposed rule to reduce bank overdraft fees and banning hidden or misleading fees. The Department of Transportation in April announced new rules requiring airlines to automatically offer full refunds in the event of canceled or significantly delayed flights.
Further Reading
Biden Promises Lower Credit Card ‘Junk’ Fees—Targeting Late Fees, Grocery Bills And Rental Charges (Forbes)
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