The Biden administration is taking sweeping actions to combat what it calls “corporate tricks and scams” that waste people’s time and money.
The White House announced Monday the roll out of its new “Time Is Money” initiative, which is a collection of regulatory rules across several federal agencies as well as a host of new industry guidelines that corporations can choose to implement.
“The administration is cracking down on all the ways that companies — through paperwork, hold times and general aggravation — waste people’s time and then really hold on to their money,” Neera Tanden, director of the White House’s Domestic Policy Council, told reporters during a press briefing.
“I think we can all relate to this,” she added. “It happens to Americans every day.”
The White House did not provide an exact timeline of when these measures would go into effect, though senior administration officials did say that no Congressional action is necessary to move forward.
Some of the proposals would, however, need to undergo official rulemaking processes, which require rounds of public input and negotiations that typically take a year or longer. Some of the initiatives that don’t require new administrative rules could be implemented sooner.
An end to ‘doom loop’ phone calls and fake review scams?
In particular, White House officials underscored the hassle of being stuck on “doom loop” calls when trying to get assistance from a company.
The Consumer Financial Protection Bureau is crafting a new rule to require companies under its jurisdiction to give callers better access to live customer-service agents, instead of letting callers languish on the phone line and get bounced around by automated answering systems. Other federal agencies are coordinating with companies outside the financial-services industry to make similar changes without the use of an official rule.
Similarly, Tanden said companies often make it difficult to cancel services in hopes that people will lose patience and keep paying.
“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,” she said.
A forthcoming rule from the Federal Trade Commission, dubbed “click to cancel,” aims to make it as easy to cancel a subscription as it was to sign up across most consumer-facing industries. A mirroring rule announced Monday from the Federal Communications Commission would do much the same for phone, internet and cable companies.
Another new rule from the FTC, if enacted, would curb companies from using fake review scams. These scams, prevalent on e-commerce sites like Amazon, often bury negative reviews on products or services, fabricate positive reviews or employ similar methods that mislead consumers into buying something that doesn’t match the description or review ratings.
Online shopping and review scams are the second largest category of fraud reported to the FTC so far this year. In the first half of 2024, the the agency received over 170,000 complaints from consumers across the country, and 78% of them said they lost at least some money due to the issue. The typical loss equates to $128 per person.
Efforts to reduce health insurance bureaucracy
Time-consuming practices in the health insurance industry are also in the crosshairs of the “Time Is Money” initiative.
“You want to file a health insurance claim, but the companies make it hard to find the form,” Tanden said. “When you do, you have to physically print it out, find an envelope and stamp and mail it in.”
To streamline the insurance claims and reimbursement process, the departments of Labor and Health and Human Services are calling on health insurance companies to allow patients to submit health claims online and to generally improve people’s experience with the health insurance industry.
The idea is to convince certain industries to make the improvements themselves without the need for official regulations or legislation, and the federal government has had some recent success taking this peer-pressure approach.
For example, as part of the now-defunct Affordable Connectivity Program, the FCC worked with several internet service providers to offer new, lost-cost plans, so that people who received a government subsidy could effectively get broadband at no out-of-pocket cost. And recently, the Department of Transportation secured commitments from 10 major airlines to allow families with young kids to sit together without an upcharge.
As part of the Biden administration’s war on “junk fees,” the transportation agency also enacted a rule in April that requires airlines to automatically reimburse passengers for certain delays and flight cancellations.
The crackdown on junk fees is a similar but separate effort from the “Time Is Money” rules, and its main goal is to eliminate shady pricing practices and hidden charges across just about all consumer-facing industries, including overdraft fees, event-ticket surcharges, unexpected hotel fees at check out, financial advisor commissions and more.
“Americans are tired of being played for suckers,” Tanden said.
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