Biden Administration Takes Aim at Subscription Traps and Poor Customer Service
If you’ve ever spent countless hours trying to cancel a gym membership, navigate through endless automated phone menus, or fight for a refund on a delayed flight, help might finally be on the way. The Biden administration is stepping in with a new initiative aimed at tackling the frustrating and often costly hurdles that consumers face when dealing with hard-to-cancel subscriptions and subpar customer service.
On Monday, President Joe Biden’s administration rolled out the “Time Is Money” initiative, a multi-agency effort designed to protect consumers from being trapped in subscriptions they no longer want and to improve overall customer service experiences. The initiative will involve collaboration between several key government agencies, including the Federal Trade Commission (FTC), the Department of Transportation (DOT), and the Consumer Financial Protection Bureau (CFPB).
At the heart of the initiative is a series of proposed rules intended to make it easier for consumers to cancel subscriptions and navigate customer service processes. The White House’s goal is to ensure that Americans aren’t forced to pay for services they no longer use simply because the cancellation process is deliberately complicated or time-consuming.
Neera Tanden, White House domestic policy advisor, shed light on the issue during a press call on Friday, explaining how companies often exploit these processes to keep customers locked in. “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. They really are just taking advantage of the fact that people are really busy.”
One of the key components of the initiative is a proposed rule from the FTC, which would require businesses to make it just as easy to cancel a subscription as it is to sign up for one. This rule could be a game-changer for consumers who are tired of being stuck in subscriptions they no longer want but can’t easily cancel. The FTC is currently reviewing public comments on the proposal, signaling that consumer voices will play a role in shaping the final outcome.
In addition to tackling subscription traps, the initiative also aims to address the broader issue of poor customer service. The CFPB is launching a rulemaking process to eliminate so-called “doom loops,” where customers find themselves trapped in an endless cycle of menu options and automated recordings just to reach a human representative. The proposed rule would mandate that companies provide a human representative at the click of a single button, ensuring that customers can get the help they need without unnecessary frustration.
The Department of Transportation is also stepping up to protect consumers, particularly air travelers. Back in April, the DOT announced a rule that would require airlines to automatically issue refunds when flights are delayed or canceled, sparing customers the hassle of waiting on hold with customer service to get their money back. This rule could bring much-needed relief to travelers who have been all too familiar with the challenges of securing refunds from airlines.
The initiative comes at a time when consumer frustration with customer service has reached new heights. According to a report by Business Insider, poor customer service often stems from what economist Dan Davies calls the “accountability sink,” where companies use algorithms or defer to rigid company policies to make decisions, leaving no individual employee accountable for the customer’s experience. This can leave customers feeling unheard and helpless—a situation the Biden administration is now trying to rectify.
As part of the “Time Is Money” initiative, the White House has also launched an online portal where Americans can submit suggestions on what issues the administration should address next. This move underscores the administration’s commitment to putting the needs and concerns of everyday Americans at the forefront of its consumer protection efforts.
“We can all relate to this,” Tanden remarked during the Friday press call. “It happens to Americans every day. For example, you want to cancel your gym membership or a subscription service to a newspaper. 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, 30 minutes, or half an hour just to opt out.”
The Biden administration’s “Time Is Money” initiative is a bold step towards making consumer protection a priority. By cracking down on subscription traps and improving customer service, the administration hopes to save Americans time, money, and the frustration that comes with dealing with today’s often unaccountable corporate practices. Whether these proposed rules will be implemented remains to be seen, but for now, consumers can take solace in knowing that their concerns are being heard at the highest levels of government.
