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Jimmy Williams
In an effort to enhance consumer protection, a coalition of U.S. federal agencies has launched the “Time Is Money” initiative, designed to make it easier for Americans to cancel unwanted memberships and recurring payment services.
The initiative, announced by the Biden administration, introduces a series of new regulations targeting industries from healthcare and fitness memberships to media subscriptions, all with the goal of simplifying the cancellation process.
Neera Tanden, White House domestic policy adviser, emphasized the importance of the initiative in a press briefing on Friday. “The administration is cracking down on all the ways that companies, through paperwork, hold times, and general aggravation waste people’s money and time,” Tanden stated. She added that these practices are not accidental but have significant financial consequences for consumers. “Essentially, in all of these practices, companies are delaying services or making it so difficult to cancel that they hold onto consumers’ money for longer,” she explained.
One of the key components of the initiative is a new inquiry by the Federal Communications Commission (FCC) into whether communication companies should be required to make subscription cancellations as easy as the sign-up process. This follows the Federal Trade Commission’s (FTC) “click to cancel” rulemaking initiated in March 2023, which mandates that companies allow customers to end subscriptions with the same ease with which they were started.
In addition, the departments of Labor and Health and Human Services are pushing health insurance companies and group health plans to improve customer interactions. According to a White House summary, these departments will continue to explore additional opportunities to enhance consumers’ experiences with the healthcare system in the coming months.
The “Time Is Money” initiative builds on several ongoing government efforts aimed at improving consumer experience. In October, the FTC proposed a rule to ban hidden and bogus junk fees, which often obscure the true cost of concert tickets, hotel rooms, and utility bills. Meanwhile, the Transportation Department finalized rules in April requiring airlines to automatically issue cash refunds for delayed flights and to better disclose fees related to baggage and reservation cancellations.
The government has also taken direct action against companies accused of misleading consumers. In June, the Justice Department, acting on a referral from the FTC, filed a lawsuit against Adobe and two of its executives for allegedly pushing consumers into “annual paid monthly” subscriptions without properly disclosing hefty cancellation fees within the first year. Adobe’s general counsel, Dana Rao, responded to the lawsuit, stating that the company disagrees with the FTC’s characterization and plans to challenge the claims in court. “The early termination fees equate to minimal impact on our revenue but are important in offering customers a choice in plans that balance cost and commitment,” Rao said.
Not everyone is in favor of the government’s intensified focus on consumer protection. Sean Heather, senior vice president of international regulatory affairs and antitrust at the U.S. Chamber of Commerce, criticized the initiative, describing it as “an attempt to micromanage businesses’ pricing structures,” which he argues could undermine businesses’ ability to offer consumers various pricing options.
As the “Time Is Money” initiative rolls out, the administration remains committed to simplifying the consumer experience and ensuring that businesses no longer take advantage of convoluted cancellation processes to retain customers’ money.
