There’s a fabled version of the free market that says consumers are almost always well-served by companies. If not, the story goes, consumers can just shop somewhere else. This threat — losing customers to competitors — creates an almost magical force pushing companies to act more in the interests of consumers. No need for government involvement. Competition will take care of the job.
Within the context of fighting junk fees, Tanden says, she and her team met with the president. “And really what animated him is that he thinks that sometimes companies are kind of playing consumers for suckers,” Tanden says. President Biden instructed them to look across the government and see what sort of actions the administration could take to help consumers against shady business practices beyond just junk fees.
The Consumer Financial Protection Bureau wants to make a rule “that would require companies under its jurisdiction to let customers talk to a human by pressing a single button,” as opposed to getting stuck on the phone in “doom loops,” where you have to keep pressing buttons and never get to talk to anyone. The administration also might crack down on the use of AI chatbots, which, they say, “frequently provide inaccurate information and give the run-around to customers seeking a real person.
First off, Tanden says, the issue is that consumers often shop on price, not on customer service. “Consumer experience is a gray area,” she says. “It’s hard to have a metric for it. There’s no system out in the world that’s grading companies on consumer experience.” Instead of competition resulting in better customer experiences, she argues, it becomes a “race to the bottom” even in industries with a lot of competition. She argues the government needs to step in and do something about this market failure.