Your time, money and patience might be valuable to you, but it means much more to your company’s bottom line.
A new study by the Groundwork Collaborative reveals that Americans are dealing with longer wait times for customer service, paying billions in unwanted taxes and losing even more to health care problems, setting the stage for what the group calls an “economy of annoyance.”
Unwanted fees for concerts, hotels and food deliveries cost Americans more than $90 billion a year, study finds. Assigning a dollar cost to studies estimating the hours consumers spend waiting, researchers found that Americans cough up more than $21.6 billion in lost time due to healthcare administrative issues.
Companies also get a premium for your time. The time Americans spend on the phone with customer service has increased 60 percent over the past 20 years as companies cut back on customer service and make processes like getting a refund more difficult in the name of increasing revenue.
These bogus fees and frustrating attempts are part of the “vibration-based” fees that companies impose on Americans to make every consumer interaction difficult. Companies rely on lack of competition and onerous cancellation policies to lure consumers into services.
“We’ve become very interested in how an on-time fee translates into both dollars and cents,” said Alex Jacquez, Groundwork Collaborative’s Head of Policy and Advocacy. Jacquez said the report shows a “vibration-based economic analysis” where “every consumer interaction is more difficult than it was before.”
Using existing studies to measure how much time consumers spend on frustrating tasks like being stuck with customer service or trying to cancel a subscription, the researchers converted those times into dollars and cents. Calculating both the direct financial losses and the monetary value of lost time, the researchers found that Americans steal more than $165 billion annually in the “annoyance economy.”
Corporations intentionally turn simple tasks into long procedures to make more profit, most obviously by renting services rather than outright ownership.
“One thing we want to talk about more is how the economy is becoming more and more underwritten,” Jacquez said. wealth. Driving a car means “you pay monthly to be able to unlock all the features of your car. It feels like they’re trying to turn you into models who have guaranteed income streams, rather than buying and owning things.”
Ditching these subscriptions can increase corporate revenue by more than 200%, the report says.
Healthcare costs and administrative hassles are no strangers to the economy of frustration, either, with the study detailing nearly 80 percent of Americans reporting frustration with paperwork and coordination for insurance and medical appointments.
Companies also rely on AI-powered chatbots to create “headaches” to discourage consumers from seeking refunds or resolving issues. Customer service, Jacquez says, is an area “where artificial intelligence will definitely arrive” as one of the jobs that could be replaced. Customer service scores in 2024 hit an all-time high, with the Consumer Rage Survey finding that 74% of customers reported a problem in the past year – double the rate recorded in 1976.
“As a human being, you don’t want to sit in a call center all day,” Jacquez said. “Maybe it’s good that AI could take over a customer service role, but I think if you look at how companies actually implement these solutions, it’s almost always to extract more money from their consumers and make these experiences a headache for them.”
In reviewing lawsuits filed with the Consumer Financial Protection Bureau (CFPB), Groundwork Collaborative found that some banks used a “heavy queue” policy to intentionally drop calls before customers reached a representative. “It is anticipated that not 100% of these people would call back, and that if they did, the process of reaching a real human being and someone who could solve their problems would be more onerous and they would be less likely to do so in the future.”
“There’s not a lot of downside to providing bad customer service, especially in these chatbots and these automated AI situations,” Jacquez said.
AI is also being used in customer service settings – consumers are now charged random, optional prices to make higher profits. Companies like Instacart use AI software to randomize prices to find the optimal price consumers are willing to pay for goods. Delta recently launched this idea for personalizing prices for airline seats.
AI has also disrupted the spam call industry. Americans receive 130 million scam calls per day and more than 20 billion spam messages per month. Over 85% of consumers report frustration with spam and scams, making it the “most annoying” issue.
Jacquez and the report offer a solution: more government regulation. Polls show that 68 percent of voters want Congress to prioritize addressing these annoying business practices. One proposal calls for federal regulators to impose monetary fines directly tied to the time consumers spend waiting or dealing with roadblocks, making the “upset” a liability for the company.
This story was originally featured on Fortune.com
