Last week, the Biden-Harris Administration launched a comprehensive initiative aimed at addressing what it describes as everyday hassles that waste Americans’ time and money. This new government-wide effort, called “Time Is Money,” seeks to regulate various business practices that the administration claims add unnecessary burdens to consumers’ lives. The initiative includes actions from multiple federal agencies, including the Consumer Financial Protection Bureau (CFPB or Bureau) and the Federal Trade Commission (FTC).

Several key actions in the White House plan include:

• Stopping Customer Service “Doom Loops”: The CFPB is planning to issue rules or guidance to address the use of chatbots by banks and other financial institutions. The CFPB will identify when the use of automated chatbots or automated artificial intelligence voice recordings is unlawful, including in situations in which customers believe they are speaking with a human being. The CFPB also will propose a rule to require that customers can reach a human representative by pressing a single button, addressing the issue of customer service “doom loops.” The Federal Communications Commission (FCC), Department of Health and Human Services, and Department of Labor will take similar measures for businesses under their jurisdictions.
• Ensuring Accountability for Bad Service: The FTC has proposed a rule to stop marketers from using fake reviews, suppressing honest negative reviews, and paying for positive reviews, ensuring consumers can rely on genuine feedback.
• Canceling Subscriptions and Memberships: The FTC has proposed a rule that would require companies to make it as easy to cancel a subscription or service as it was to sign up for one. The FCC is also considering extending similar requirements to companies in the communications industry.

The administration also announced initiatives related to airline refunds and health insurance claims.

Our Take:

While these initiatives purportedly aim to improve consumer experience, they also raise concerns about regulatory overreach and the potential impact on businesses. The proposed rules could limit the flexibility businesses have in designing their customer service processes and managing consumer interactions. As it relates to chatbots and artificial voice recordings, this announcement seems to follow the sentiments expressed by the CFPB in a report issued in June 2023 about perceived problems with financial institutions’ use of those technologies. It will be interesting to see exactly what the Bureau does in this regard. We’ll be monitoring and reporting on this issue as it develops.