To protect consumer rights and streamline the cumbersome processes involved in “unsubscribe” and canceling paid services, federal agencies in the United States are seeking legislation to make it easier for Americans to cancel unwanted memberships and recurring payments.
On Monday, August 12th, the White House released a Fact Sheet announcing the “Time Is Money” initiative under the Biden-Harris administration. This initiative aims to combat practices by businesses that waste consumers’ time and money through various means.
These business practices include requiring consumers to fill out extensive forms by institutions such as insurance companies and banks, making consumers wait on long phone calls for refunds, and establishing complicated cancellation procedures for memberships and subscription services.
The Fact Sheet states that the proposal aims to reduce the pressure and burden that ordinary Americans face in their daily lives due to these unreasonable corporate behaviors, ultimately enhancing their quality of life. The government hopes that through this initiative, processes that are often seen as troublesome and confusing can be simplified and made more efficient.
The White House’s domestic policy advisor Neera Tanden, as cited by the Associated Press, stated last Friday, August 9th before the announcement of the initiative, “Essentially, in all of these practices, companies are delaying providing you service or making canceling that service egregiously difficult so that they can hold onto your funds for longer. These seemingly small inconveniences are not accidental and they have significant financial consequences.”
The upcoming measures on Monday also include the Federal Communications Commission (FCC) initiating a new investigation to determine whether requirements should be imposed on communication companies to make unsubscribing or canceling services as easy as signing up.
In March 2023, the Federal Trade Commission (FTC) implemented the “click to cancel” rule, requiring companies to allow customers to terminate subscriptions as easily as they started them.
According to the U.S. Chamber of Commerce’s Senior Vice President of International Regulatory Affairs and Antitrust Sean Heather, as cited by the Associated Press, these measures “are essentially trying to micro-manage companies’ pricing structures, often limiting companies’ abilities to offer consumers diverse pricing options.”
As per the White House’s Fact Sheet, the heads of the Department of Labor and Health and Human Services are also requiring health insurance companies and group health plans to improve their interactions with customers, with plans to find more ways to enhance consumer interaction with the healthcare system in the coming months.
In October last year, the FTC announced a proposed rule that would ban hidden and deceptive “junk fees.” These hidden fees are typically not explicitly disclosed when consumers purchase goods or services but become apparent during the final payment.
In April of this year, the U.S. Department of Transportation announced the implementation of new regulations requiring airlines to increase transparency regarding additional fees and automatically refund passengers in cash, rather than vouchers or travel points, in cases of cancellations and severe flight delays.