The federal government announced a new effort that seeks to ensure that businesses do not waste people’s time and money with unnecessary policies and procedures.
This includes issues such as unreasonable waiting times for refunds, “hoops and hurdles” that customers must navigate to cancel subscriptions, and the complications of dealing with health insurance firms.
“These hassles don’t just happen by accident,” the White House statement reads.
“Companies often deliberately design their business processes to be time-consuming or otherwise burdensome for consumers, in order to deter them from getting a rebate or refund they are due or canceling a subscription or membership they no longer want—all with the goal of maximizing profits.”
The document did not mention any specific companies by name.
To protect customer interests, multiple agencies under the Biden administration are taking “wide-ranging action” to crack down on such practices.
The Federal Trade Commission (FTC) has proposed a rule that requires companies to ensure that customers can cancel their services as easily as they can sign up. The Federal Communications Commission (FCC) has also started looking into implementing similar requirements for firms in the communications sector.
The measure makes it easy for customers to get refunds when airlines cancel flights, significantly delay flights, delay checked bags, or fail to offer promised extra services.
Meanwhile, the Department of Health and Human Services and Department of Labor are calling on health insurance companies and group health plans to take “concrete actions to save people time and money when interacting with their health coverage.”
The administration is also tackling “doom loops,” situations in which customers seek assistance from a real person but are instead sent through several menu options and automated recordings, which take away their time and do not provide the support they seek.
To deal with the issue, the Consumer Financial Protection Bureau plans to propose a rule that requires companies to allow customers to talk with a real person by pressing just a single button. The FCC is considering similar requirements for broadband, cable, and phone companies.
Business Opposition
The new initiative has received significant industry pushback.“[The proposed rule would] do nothing to streamline this patchwork of state and federal requirements, or to further persuade bad actors to comply with existing requirements,” it said.
“Instead, it would exacerbate this already messy framework, impose increased costs on the businesses already concerned with following existing laws, and stifle creativity.”
The organization said the rules “far exceed” the agency’s authority to regulate the airline sector. It stated that “one-size-fits-all passenger service mandates“ will raise airline costs, which ”will ultimately be reflected in higher ticket prices.”
These measures, too, faced industry criticism. For instance, a rule against credit card late fees was slammed by the American Bankers Association, with its president warning that the policy would “reduce competition and increase the cost of credit.”
