White House Launches Interagency Effort on Corporate Practices that Burden Consumers

The White House launched an interagency effort to combat "deliberately design[ed]" corporate strategies that make business processes time-consuming or otherwise burdensome for consumers.

According to the White House, the "Time is Money" initiative will focus on companies that "deliberately design their business processes to be time-consuming or otherwise burdensome for consumers, in order to deter them from getting a rebate or refund they are due or canceling a subscription or membership they no longer want—all with the goal of maximizing profits." The White House asserted that when consumers give up on claiming a service, rebate, or refund after facing long hold times or complex paperwork, they lose money while companies profit.

The White House said it "will take wide-ranging action to crack down on these unfair practices and save Americans time and money" by:

• Simplifying Subscription Cancellations. The White House stated that consumers should not have to "navigate a maze" to cancel subscriptions. The White House highlighted an FTC proposed rule to make canceling subscriptions as easy as signing up, and an FCC inquiry into similar measures for the communications industry.

• Automatic Airline Refunds. The White House highlighted a new DOT rule which requires airlines to automatically refund canceled or significantly altered flights, eliminating the hassle of manual refund requests.

• Streamlining Health Claims. The White House, Health and Human Services and the Labor Department are urging health insurers to simplify claim submissions and improve customer interactions, with a focus on online options.

• Cracking Down on Customer Service "Doom Loops".  The White House said it is targeting customer service "doom loops" where consumers are stuck navigating automated systems instead of reaching a real person. The CFPB will propose a rule to require companies subject to its jurisdiction to offer a single button to connect with a live representative, while the FCC is exploring similar requirements for phone, broadband and cable companies. HHS and DOL are requesting that health insurers simplify access to human customer service agents.

• Ensuring Honest Reviews. The White House highlighted an FTC proposed rule to "stop marketers from using illicit review and endorsement practices such as using fake reviews, suppressing honest negative reviews, and paying for positive reviews, which deceive consumers looking for real feedback on a product or service and undercut honest businesses."

• Improving Chatbot Effectiveness. The White House said that the CFPB plans to issue rules or guidance to regulate the use of ineffective and time-wasting chatbots in banks and financial institutions. The new measures would determine when the use of automated chatbots or AI voice recordings is unlawful, especially when customers mistakenly believe they are interacting with a human. The White House noted that the CFPB issued a report on "Chatbots in Consumer Finance" in June 2023.

• Streamlining School Communications. The White House said the Department of Education will issue guidance to make school processes, such as communicating with teachers, viewing school policies, completing forms and permission slips, easier for parents.