The Biden administration is asking the Consumer Financial Protection Bureau to look at banks’ use of chatbots and to address customer service “doom loops” as part of a wider effort, unveiled Monday, to prioritize customers’ time.
“Companies often deliberately design their business processes to be time-consuming or otherwise burdensome for consumers, in order to deter them from getting a rebate or refund they are due or canceling a subscription or membership they no longer want — all with the goal of maximizing profits,” the White House wrote in introducing what it dubbed the “Time Is Money” initiative. “Americans are tired of being played for suckers.”
Among the pillars of the initiative, the White House said the CFPB is planning to issue guidance meant “to crack down on ineffective and time-wasting chatbots used by banks and other financial institutions in lieu of customer service.”
“While chatbots can be useful for answering basic questions, they often have limited ability to solve more complex problems and disputes,” the White House said Monday. “Instead, chatbots frequently provide inaccurate information and give the run-around to customers seeking a real person.”
Chatbots should “enhance customer service with speedy response times, not [help companies] shirk on basic responsibilities, such as receiving a refund,” the White House said.
The CFPB will identify when the use of automated chatbots or artificial intelligence voice recordings is unlawful, including when customers believe they are speaking with a person, the White House said.
“This is not about shaming corporations writ large,” a senior administration official told reporters Friday, according to CNBC. Rather, it’s “a new frontier of consumer protections.”
The initiative comes roughly a year after the Biden administration and the CFPB doubled down on efforts to root out unnecessary “junk fees” charged by banks for basic services.
“When people request basic information about their accounts, big banks cannot charge them massive fees or trap them in endless customer service loops,” CFPB Director Rohit Chopra told reporters last October.
Those loops, too, came back around in messaging Monday. The CFPB is set to float a rule requiring companies to let customers talk to a person by pressing a single button.
The White House cited a recent survey in which respondents reportedly said being forced to listen to long messages before being permitted to speak to a live representative was their top customer service complaint.
“Too often, customers seeking assistance from a real person are instead sent through a maze of menu options and automated recordings, wasting their time and failing to get the support they need,” the White House said Monday.
The CFPB isn’t the only agency being pressed into action. The Department of Health and Human Services is set to urge health plan providers to make it easier for customers to talk to live people, the White House said. The Federal Communications Commission, too, will launch an inquiry into how phone, broadband and cable companies can do the same.
The Time is Money proposals will not require congressional approval, the senior administration official said. Any bill to boost consumer protections — this late in the Biden administration — would have a remote shot at passage because Republicans hold a majority in the House.
Monday’s initiative, though, comes as Vice President Kamala Harris, the Democratic nominee to succeed Biden in the White House, prepares to outline an economic policy.
