Ivana Saric
The Biden administration on Monday outlined new proposals to make it easier for Americans to cancel unwanted subscriptions.
Why it matters: The initiatives are a part of a broader effort by the administration to eliminate the “unnecessary headaches and hassles” that consumers face, including by getting rid of junk fees.
“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,” according to a White House fact sheet out Monday.
State of play: Several federal agencies are proposing rules that would combat “corporate tricks and scams like excessive paperwork, long wait times, and more” that companies use to stall consumers from canceling subscriptions, per the fact sheet. These include:
A proposed Federal Trade Commission (FTC) rule would require companies to make canceling a subscription or service as easy as signing up for one.
The Federal Communications Commission (FCC) will conduct an inquiry into whether similar rules should be applied to companies in the communications industry.
A new rule from the Consumer Financial Protection Bureau (CFPB) would crack down on customer service “doom loops” by requiring companies to allow callers to talk to a human representative with the press of a single button.
The FCC, Department of Health and Human Services, and Department of Labor are looking into similar rules for the communications industry and health plan providers, per the release.
Zoom out: A new rule from the Department of Transportation requires airlines to automatically issue refunds if flights are canceled or significantly changed and a customer chooses not to accept rebooking options.
The bottom line: “In addition to robbing hardworking families of their valuable time and adding frustration to our daily lives, these hassles cost us money,” the fact sheet stated.
