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Can’t give up your gym? Biden’s team advocates crackdown on customer service red tape
Massachusetts

Can’t give up your gym? Biden’s team advocates crackdown on customer service red tape

President Joe Biden’s administration on Monday touted efforts to crack down on annoying practices by companies that force customers to wait on hold and jump through hoops to cancel subscriptions.

The Time is Money initiative includes a number of proposals, including a regulation still in preparation, which the government says will save consumers money and reduce the “general annoyance” caused by deliberately poor customer service.

“The administration is cracking down on all the ways companies waste people’s money and time – through paperwork, wait times and general hassles,” White House domestic policy adviser Neera Tanden told reporters on Friday.

“For example, you might want to cancel your gym membership or your newspaper subscription,” Tanden said. “It used to take one or two clicks to sign up, but now to cancel your subscription or cancel your membership, you have to come 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 central part of his economic agenda. The new proposals are an attempt to burnish Democrats’ image as consumer advocates at a time when Republicans have had a big advantage on the economy due to high inflation.

However, like any administrative action that does not build on new legislation, these measures could be quickly reversed next year by either a Republican president or Republicans in Congress.

The core of the initiative is a bill introduced by the Federal Trade Commission in March last year that would require companies to make it as easy for their customers to cancel services as it is to sign up. For example, by using the same website and the same number of steps. And consumers could even refuse notification of additional offers.

The White House said the Federal Communications Commission (FCC) would launch an investigation to determine whether the proposed rules should be extended to telephone companies.

The original “Click here to cancelThe new rule, if passed, would build on existing regulation of “negative option” marketing, in which sellers interpret a customer’s silence as a willingness to continue paying for a service. The proposal appears to have stalled in the regulatory process due to industry criticism.

Other new elements of the “time is money” package include a public demand that health insurers allow their patients to submit quotes online instead of requiring paper forms, and a new rule by the US Consumer Financial Protection Bureau that would force insurers to give their customers the option of speaking to a human at the touch of a button when making a service call.

“Basically, all of these practices are companies delaying providing you with service or really trying to make it so difficult for you to cancel service that they can keep your money for longer and longer,” Tanden said. “These seemingly small inconveniences don’t really happen by chance. They have huge financial consequences. They’re really just taking advantage of the fact that people are really busy.”

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