Biden takes aim at another junk fee: Hard-to-cancel subscriptions

President Joe Biden has made eliminating “junk fees” — hidden charges on everything from airline reservations to concert tickets — a key part of his domestic agenda.

His government has tried to limit fees on things like bank overdrafts and late payments on credit cards, and from Monday turned its attention to making subscriptions and memberships easier to cancel.

White House policy adviser Neera Tanden said in a call with reporters that new rules from the Federal Trade Commission and Federal Communications Commission should make it possible for Americans to terminate service with just “one or two taps on their phone.”

“Companies often trick consumers into paying for a variety of subscription services — from gym memberships to newspapers to cosmetics — that consumers no longer want or that they never subscribed to in the first place,” a White House report said. A fact sheet released on Monday reads“Consumers shouldn’t have to go through so much trouble to cancel unnecessary subscriptions and recurring payments.”

American Often cited economic It’s one of the most important issues in the U.S. The Biden administration’s attempt to rein in trash fees is one way it can demonstrate before the election that Democrats are addressing Americans’ concerns about high prices. Limiting fees is popular in both parties: December Data from the Progressive Poll found that 77% of voters, including 81% of Democrats, 78% of independents and 72% of Republicans, expressed support for legislation to ban trash fees.

“Essentially, in all of these practices, these companies are delaying providing you with service or actually trying to make it very difficult for you to cancel service so that they can hold onto your money for longer and longer periods of time,” Tanden said. “And what that means is that ultimately the consumer, the American public, is suffering.”

The Biden administration’s proposal would prohibit companies from charging customers without their consent, failing to disclose cancellation policies and making cancellation difficult by requiring customers to cancel in person or by holding customers on hold for long periods of time on customer service calls. Companies that don’t follow the rule could face Facing civil penalties, Like those In recent cases, the FTC has sought Advertising related.

The Federal Trade Commission is currently reviewing the public’s Proposed Ruleswhich would require companies to allow customers who sign up for a service online to cancel that service online in no more steps than when they signed up. Companies would be allowed to offer additional offers when customers try to cancel, but only if they first ask customers if they want to hear about those offers. Companies would also have to provide a reminder before a subscription automatically renews if the subscription doesn’t include any physical goods.

The rule is likely to take effect in the coming months.

Meanwhile, the FCC launched an investigation on Monday seeking to develop similar rules for the communications industry. If the FCC decides to do so, the rule might not take effect before the end of Biden’s term, but Vice President Kamala Harris could push for it if she wins the 2024 election.

In addition to recent moves on subscriptions, Biden is pursuing an unresolved Extensive regulation A comprehensive crackdown on garbage fees, as well as regulations targeting garbage fees for specific industries.

Notably, the Consumer Financial Protection Bureau (CFPB) has proposed a rule Curbing overdraft fees Fees are incurred when consumers withdraw more money than is available in their bank accounts – a move that could save customers an estimated $3.5 billion a year.

However, the government’s efforts have also encountered some obstacles. Airlines have recently Being sued The Biden administration is suing over a new final rule that would require airlines and ticket agents to disclose in advance any fees associated with booking a flight. A federal judge Temporary blockade A Biden administration rule caps fees for late credit card payments at $8 a month, which the CFPB says will save Americans $10 billion a year in costs. Lobbyists for banks and credit card companies are working on a plan to limit late payments to $8 a month. Some Republican members of Congress, The rule is considered unconstitutional.

While the lawsuits are aimed at limiting the government, Biden has also used the courts to pursue an aggressive antitrust and pro-consumer strategy. His administration has filed a series of massive lawsuits against large companies, including the four largest technology companies, on the grounds that they have harmed industry competition and therefore harmed American consumers.

The Biden administration recently won Big ruling for Google A judge ruled that the company’s search business constitutes an illegal monopoly. Other antitrust lawsuits are pending over Google’s advertising business, Meta’s acquisitions of Instagram and Whatsapp, Apple’s alleged anticompetitive behavior in the smartphone market and Amazon’s restrictions on third-party sellers that help drive up prices.

The Biden administration also filed a lawsuit Seeking to Split Live NationTicketmaster’s parent company, alleging it operated an illegal monopoly through anticompetitive behavior that harmed everyone from consumers to concert venues to artists.

The durability of Biden’s consumer protection plans may depend in part on the November election. A Harris administration would likely stick with these policies and could continue these antitrust lawsuits and more. But things might be different if former President Donald Trump wins the election. Trump administration has not made consumer protection a priority During his first term, he did not make a second term the core of his campaign.