The FTC, FCC and DOT are flexing their muscles to help consumers. Some rules are regulatory law; other proposals await the outcome of the U.S. presidential election.
Companies that provide bad customer experience are in the White House's sights, as it plans to buttress consumer rights with a coordinated effort that spans multiple agencies.
For the affected CIOs, customer service leaders and e-commerce teams, compliance will likely require technology changes and rewriting of service workflows. In cases where customers must put up with difficult documentation to get refunds, chatbots that lead to dead ends, or aggressive cross-selling and upselling before being allowed a cancellation, these regs could upend whole CX philosophies -- or organizations could face government fines or lawsuits.
Last week, the White House combined several initiatives under one broad title, Time Is Money:
The Federal Trade Commission's (FTC's) proposed Click to Cancel provision -- launched in 2023 and currently headed toward final rule publication -- mandates that consumers can end a digital subscription as easily as they sign up.
That agency's coming phone and chat "doom loop" regs require that customers are able to reach a human in one click when they tire of chatbots and interactive voice response phone trees.
The Federal Communications Commission has launched a separate Click to Cancel proposal to reel in communications companies' roadblocks to consumers quitting services such as internet and cellphone.
The Consumer Financial Protection Bureau (CFPB) plans a crackdown on financial institution chatbots that are "time-wasting and ineffective," and will outlaw the use of some AI voice bots, including those that convince customers they are talking to a human.
The Department of Education proposes to mandate streamlined communications between parents and schools.
The departments of Labor and Health and Human Services will require health insurance companies to support online claims and in general reduce the time it takes for patients to get help on the phone or on websites -- including during nonworking hours.
The Department of Transportation (DOT) continues to add regulations for airlines to compensate customers whose flights are canceled or significantly delayed, and to disclose baggage fees more clearly -- a process that started two years ago.
The Department of Justice (DOJ) is making examples of some companies that require consumers to suffer "dark patterns" -- by paying penalties or going through onerous processes for quitting services -- including Adobe, under the Restore Online Shoppers' Confidence Act signed into law by former President Barack Obama in 2010.
"Americans are tired of being played for suckers, and President Biden and Vice President Harris are committed to addressing the pain points they face in their everyday lives," the White House said in a statement tying these initiatives together.
In related initiatives, the FTC is drafting rules that would address hidden "junk fees" for bank transactions, lodging such as hotels and Airbnb rentals, concert tickets, utility bills and car rentals. It has also gone after online healthcare platforms that violate privacy and security rules by reselling data to advertisers. The CFPB has its own initiative to throttle back bank fees. State attorneys general are also supporting the efforts.
People, tech and processes need updates
Customer service is the main target of the Time Is Money initiative. DOT rules already in effect have shaken up airline policies and service. Delta endured a major test in June, when a CrowdStrike security update shut down its Microsoft systems, which in turn led to more than 5,000 flight cancellations and spawned a massive lawsuit.
The problem with legislating changes to customer service is that legislators don't understand how customer service works, said Dan Miller, founder of Opus Research. Compliance is not just a matter of pressing a few buttons and making it happen; it takes understanding staffing models that, depending how the final regulations are worded, predict the Erlang math of spikes in demand for contact center service, including the unpredictable -- such as a CrowdStrike update canceling 5,000 flights.
The positive outcome that we're seeing already is that a number of vendors have said, 'Hey, we need technologies to lift us out of the doom loop, and one of them is to make humanlike voice bots that actually do stuff.'
Dan MillerFounder, Opus Research
It will also take the C-suite to allocate new financial resources to customer service teams, which have been tuned over the years to perform efficiently and be less of a cost center. It will take investment in new workflows. It will also take better AI to answer and route calls.
As regulators draft new CX regulations while taking into account industry feedback, the final versions could look a lot different from the White House's opening salvos. But just the fact that the federal government is looking into CX -- and the DOJ is making an example of Adobe, which didn't offer comment for this story -- is a warning shot to big companies, Miller said. Service needs improvement, and it might be time for a "charm offensive" that points out that self-service is not the equivalent to being put on hold.
"We're playing with math here, and that's what the regulators are going to learn," Miller said. "The negative outcome would be just failure [to improve CX]. The positive outcome that we're seeing already is that a number of vendors have said, 'Hey, we need technologies to lift us out of the doom loop, and one of them is to make humanlike voice bots that actually do stuff.'"
AI could help solve the equation in other ways, said Eitan Cohen, CEO and co-founder of TechSee, which enables video exchange between customers and both service agents and bots. The flexibility of cloud technologies could be the answer to managing events that cause sudden contact center demand that isn't predictable, unlike Black Friday is for retailers or Valentine's Day for florists.
"It's not about cost-cutting, it's about how you bring capacity to foster growth," Cohen said. "If you grow, everybody's happy, and you do not have to cut capacity."
A problem holding many organizations back is data access, said Niki Hall, chief marketing officer at Five9, a cloud-computing-as-a-service vendor. CX is having its day in the spotlight and will become more important than ever for businesses as the federal Time Is Money rules come to bear.
The first IT challenge for the typical CX team to solve will be freeing customer data locked in separate marketing, CRM, service and e-commerce systems.
"What's really needed is a platform that's interoperable, that has deep partnerships with different CRM players and others," Hall said. "I predict it's going to [take] one platform to have a holistic view of your customer end to end. So, if I'm a customer calling in for something, they know my history."
Preparing for these regs
While partisans might assume one winner of the U.S. presidential election would push consumer-friendly regulations and the other would roll them back, it hasn't always been the case. Consumer protections can levy bipartisan support, and the Trump administration took on big banks such as Citizens, Citi and Fifth Third by levying fines and filing suits in state and federal courts.
So how should CX teams proactively prepare for these potential new rules? Keep investing in the people, technologies and workflows to improve customer experience in general, said Stefan Dunigan, vice president of operations and network services at Gryphon Networks, which automates sales and marketing regulatory compliance. Most enterprises already strive to improve customer satisfaction as a business driver; the idea aligns with at least the principles guiding the government's proposed regulations.
Dunigan added that the downside of the rules -- depending on how they're implemented -- could be that costs to provide better service will go up, profits go down and companies pass those costs on to consumers. Furthermore, rules such as Click to Cancel could move customer authentication security checks further upstream in enterprise workflows. That could trigger new strategies and technologies to support, potentially adding additional costs to compliance.
"Some of that stuff will work itself out over time, but it's certainly a concern," Dunigan said.
To retain customers, companies could put more emphasis on -- and include more value with -- loyalty programs once the new FTC rules take hold.
New regulations could fuel renewed interest in customer loyalty or rewards programs as well on the part of large organizations, Miller speculated -- another way they can help keep customers happier.
All that said, there's still the matter of the doom loops. Eliminating hold times is just one thing the Time Is Money CX regulations aim to redress, but it's a tall order technology-wise for customer service teams. Miller predicts there will be public or private hearings where different industry experts offer their ideas for getting customers out of the doom loop. One possible way could be through improved customer self-service.
Miller said he hopes regulators will set reasonable expectations. And vendors will deliver technology that will meet them.
"Give customers themselves tools that they can accomplish the tasks they're trying to get done," Miller said. "During the pandemic, we sort of got a preview. We saw two things: Hold times got worse, but also that some customers figured out how to play the game with automated systems -- a chatbot, a voice bot, the website -- like video games.
"In an ideal world, yes, there'll always be some tasks to require a back and forth with a human. They're the best at being empathetic, understanding what you're asking and iterating with you. But [some] large language models do a pretty good job of mimicking humans," Miller said. "If self-service is done right, sometimes talking to a human is worse than an effective automated assistant. My hope is that, during the hearings, that becomes part of the equation."
Don Fluckinger is a senior news writer for TechTarget Editorial. He covers customer experience, digital experience management and end-user computing. Got a tip? Email him.
