Unsubscribing should be as easy as signing up, new proposed federal law says

In a move to strengthen consumer protections against corporations, the Biden administration on Monday announced several policies aimed at cracking down on “problems and inconveniences that waste Americans’ time and money.”

The Federal Trade Commission (FTC) and the Federal Communications Commission (FCC) will urge companies to make it as easy to cancel subscriptions and memberships as it is to sign up. And the Consumer Financial Protection Bureau will introduce new rules that will require companies to let customers bypass the automated customer service loop by pressing a single button to reach a real person.

“For many services, signing up is one or two taps on your phone. Ending a service should be one or two taps on your phone,” White House domestic policy adviser Neera Tanden said on a call with reporters about the new rules.

Consumers can expect the new rules to also cover gym memberships and subscriptions to telephone and internet operators.

The administration will also urge insurance companies to allow online applications, rather than requiring insured customers to print and mail forms to receive coverage.

“Basically, in all of these practices, companies are delaying service to you or, really, trying to make it harder for you to cancel service so that they keep your money longer and longer,” Tanden said. “And that means that ultimately, consumers, Americans, lose.”

Administration officials said the new rules went into effect Monday but will be phased in over a period of time, with some set to take effect in a few weeks and others set to take a few months.

They are aimed at a range of industries and companies at a time when Americans are feeling the brunt of high prices and persistent inflation — an issue that is weighing on the presidential campaigns of President Joe Biden and now Vice President Kamala Harris as voters continue to rank the economy as one of their top concerns.

Under an agenda focused on “cutting costs,” the administration has sought to improve voters’ confidence in the economy through consistent but piecemeal actions to lower everyday costs, from lowering prescription drug prices to forgiving student loans.

Stock market volatility last week after a weaker-than-expected jobs report has increased pressure on Democrats to prove their economic credentials to voters. Experts urge caution before drawing any big conclusions from this week, with many divided over whether the U.S. is headed toward a recession or still on a resilient growth path.

Other Biden administration actions to lower energy bills and offset higher prices include cracking down on unnecessary fees added to airfare and hotel costs, requiring airlines to automatically refund passengers for delayed flights and banning medical debt from being included on credit reports.

Those efforts have often pitted Biden and Harris against big companies, accusing them of “shrinkflation,” or delivering less for the same price and keeping prices high even as inflation falls. The Biden administration has also been hailed by antitrust advocates for bringing back enforcement against companies in a significant way for the first time in decades — including through lawsuits against companies like Google, Apple and LiveNation.

Tanden stressed that Monday’s efforts were aimed at creating a better-functioning marketplace, not at targeting any particular company or “large-scale corporate shaming.”

“This is a broad initiative where we’re talking about a whole range of practices across multiple industries, and the real goal is to make sure that consumers and their choices are driving decisions in the marketplace, rather than the practices of companies that make it harder for people to change,” Tanden said.

“When they want to end one subscription, they can buy another, but that’s their decision,” she said. “That’s what a free market is about, allowing individuals to make the decisions they want to make without these practices getting in the way of them.”