People pass through Salt Lake City International Airport, Wednesday, Jan. 11, 2023, in Salt Lake City. Thousands of travelers were stranded at U.S. airports due to an hours-long computer outage. If a flight is canceled, experts say most airlines will rebook you on the next available flight. But if you choose to cancel the trip, airlines must provide you with a full refund. (AP Photo/Rick Bowmer)
The White House wants to end corporate practices that it says wastes consumers’ time and money, such as forcing customers to wait on hold for refunds, placing unnecessary barriers on canceling subscriptions, and making it difficult to access or submit health insurance claims.
Have you ever tried to cancel a subscription and had to jump through a bunch of hoops to do it? Or tried to get basic information from a customer service representative only to be presented with a chatbot that is completely unhelpful?
If so, we’ve got some good news.
The White House on Monday launched a new, multi-agency initiative aimed at cracking down on corporate practices like these that it says wastes consumers’ time and money.
The Federal Trade Commission (FTC) has proposed a rule that would, if finalized, require companies to make it easier to cancel subscriptions, while the Federal Communications Commission is launching an inquiry into whether to extend similar requirements to companies in the communications industry.
The Consumer Financial Protection Bureau (CFPB) will also require companies to allow customers to access a live person on the phone using a single button.
Attacking these sorts of corporate practices are part of the administration’s broader “Time Is Money” initiative.
The Department of Transportation will now also require automatic cash refunds for individuals whose flights have been canceled or changed significantly.
Secretary of Transportation Pete Buttigieg recently sent letters to the CEOs of the 10 largest US airlines last month making it clear that the Department of Transportation expects them to provide passengers with cash refunds as required by law. The letter also outlined how the agency expects airlines to proactively inform passengers of their right to a refund whenever their flight is canceled or modified, among other stipulations.
The Departments of Health and Human Services and Labor will also call on health insurance companies to make it easier to access information or submit claims.
Furthermore, the FTC is in the process of proposing a rule that would ban companies from promoting fake reviews of their products and services. They’ll further crack down on “ineffective and time-wasting chatbots used by banks and other financial institutions in lieu of customer service,” according to the White House.
These actions announced Monday are just the latest efforts the Biden-Harris administration is taking in an effort to crack down on corporate exploitation of workers and consumers.
The administration issued a final rule this year banning noncompete clauses, which effectively bar employees from starting their own business or finding a new job in the same field within a certain area or timeframe after leaving their current job. An estimated 30 million American workers are currently affected by noncompete clauses.
A federal judge recently upheld the noncompete rule after rejecting a tree-trimming company’s bid to block the FTC’s ban. The rule now faces a separate case brought earlier this year by Ryan LLC, a company owned by Republican mega donor and tax adviser to former president Donald Trump. A Trump-appointed judge issued a preliminary order against the rule.
The US District Court for the Northern District of Texas said it would “rule on the ultimate merits of this action on or before Aug. 30, 2024,” just five days before the rule is set to take effect.
The administration this year also announced a new rule to expand overtime pay for around four million lower-paid salaried employees nationwide. Since July 1, all salaried workers earning under $43,888 who work more than 40 hours per week are now required to receive overtime pay from their employers. Beginning on Jan. 1, 2025, that threshold will increase to $58,656.
The Biden-Harris administration also announced last year that it would develop federal rules that would bar unpaid medical bills from affecting patients’ credit scores in order to make it easier for Americans with medical debt to get a job, rent an apartment, or secure a car loan, for example.
