President Joe Biden has embraced “junk fees” — hidden fees on everything from airline bookings to concert tickets — a key part of his domestic agenda.
His administration has already tried to limit fees on things like bank overdrafts and late credit card payments, and on Monday, it turned its attention to making it easier to subscribe and cancel memberships.
White House policy adviser Neera Tanden said in a call with reporters that new Federal Trade Commission and Federal Communications Commission rules should require Americans to “one or two clicks on your phone” to end a service.
“Businesses often trick consumers into paying for subscriptions — from gym memberships to newspapers to cosmetics — that they no longer want or didn’t sign up for in the first place,” a White House reads the fact sheet released on Monday. “Consumers don’t have to navigate a maze just to cancel unwanted subscriptions and recurring payments.”
the americans Citing regular economics As one of the most pressing issues in the United States. And the Biden administration’s efforts to rein in junk fees are one way Democrats are addressing Americans’ concerns about high prices ahead of the election. Limited fees are popular on a bipartisan basis: a dec Data for progress polls found that 77 percent of voters — including 81 percent of Democrats, 78 percent of independents, and 72 percent of Republicans — said they supported legislation banning junk fees.
“Essentially in all these practices, companies are delaying your services or, really, trying to make it so difficult for you to cancel the service that they can hold on to your money for a long time,” Tanden said. “And that means, ultimately, the consumer, the American public, is losing out.”
How the policy will work
The Biden administration’s proposals would prohibit companies from billing customers without their consent, fail to disclose cancellation policies and make cancellations difficult by, for example, requiring customers to cancel in person or spend long hours on the phone with customer service. Companies that fail to follow the rules Citizens face fines, like them The FTC has sought in recent cases Related to advertising.
The FTC is currently reviewing public comments on it Proposed rulesThat would require companies to allow customers who sign up for a service online to cancel that service online with no more steps than they took to sign up. Companies will be allowed to make additional offers if a customer tries to cancel, but only if they first ask if a customer is open to hearing them. Organizations must provide reminders before subscriptions automatically renew if they are not for a physical facility.
This rule is likely to come into effect in the coming months.
Meanwhile, the FCC on Monday opened an investigation to pursue a similar rule that would apply to the communications industry. If the FCC decides to do so, that rule may not go into effect before the end of Biden’s term, though Vice President Kamala Harris will likely push it forward if she wins the 2024 election.
Biden’s subscription cancellation policy is part of a broader pro-consumer agenda
In addition to his latest move on subscriptions, Biden has pursued a still-pending one Extensive control Regulations to address junk fees overall, as well as industry-specific junk fees.
Notably, the Consumer Financial Protection Bureau (CFPB) has proposed a rule to curb overdraft fees when withdrawing more than the available funds in their bank accounts — a move that could save consumers overall about $3.5 billion a year.
However, the administration’s efforts have faced some obstacles. Airlines recently case The Biden administration is proposing a new final rule that would require airlines and ticket agents to disclose in advance any fees associated with booking airline tickets. and a federal judge Temporarily blocked A rule by the Biden administration that would cap fees for late credit card payments at $8 per month, which the CFPB said would cut costs for Americans by $10 billion a year. Backed by bank and credit card company lobbyists Some Republican members of Congress, The argument was that the rule was unconstitutional.
While these lawsuits are intended to limit the administration, Biden has also used the courts in aggressive anti-consumer tactics. His administration has filed sweeping lawsuits against major companies, including the Big Four tech companies, on the grounds that they are harming competition in their industries and therefore the American consumer.
The Biden administration recently won a major ruling against Google in which the judge found that the company’s search business created an illegal monopoly. Other antitrust cases are pending against Google in its advertising business, Meta for its acquisitions of Instagram and Whatsapp, Apple for its alleged anti-competitive practices in the smartphone market, and Amazon for its restrictions on third-party vendors that acted to keep prices high.
The Biden administration has also filed a lawsuit to break up Ticketmaster’s parent company, Live Nation, accusing it of operating an illegal monopoly through anti-competitive behavior that harmed everyone from consumers to artists to concert venues.
The sustainability of Biden’s consumer protection initiatives may depend in part on the November election. A Harris administration would likely uphold these policies and pursue these antitrust lawsuits and then some. But if former President Donald Trump wins the election, it’s likely a different story — the Trump administration didn’t make consumer protection a priority in his first term and hasn’t made it a campaign focus in his second term.
