ABC's Cuomo Goes after Credit Cards
The sympathetic, struggling cardholder. The anti-credit card company activist. The heartless business and the beleaguered industry representative. Check, check and check â€“ but â€śGood Morning Americaâ€™sâ€ť March 27 story wouldnâ€™t have been complete without the patronizing attacks of reporter Chris Cuomo.
â€śBut with these fees â€“ account management, and all these clever names you have for them â€“ thatâ€™s not about borrowing. Thatâ€™s about squeezing it out of them before the game even begins. Isnâ€™t that unfair? Isnâ€™t that past the line?â€ť Cuomo pressed Chris Stinebert, president and CEO of American Financial Services Association.
Stinebert was the only voice from the credit card companies in an emotional, shameless attack on the industry. Cuomo bemoaned consumers â€śGetting sucked in by attractive offersâ€ť and being â€śtrappedâ€ť by â€śfee-laden cardsâ€ť in this installment of the â€śGMA Gets Answersâ€ť series.
The story centered on 19-year-old Celina Alvarez, who got a credit card to pay her college tuition but then discovered her purchase wasnâ€™t the only charge.
â€śI didnâ€™t understand it to begin with,â€ť Celina said. â€śBut then when I saw all those little small charges, I was like, thatâ€™s ridiculous.â€ť According to the ABC story, the card included a â€ś$100 origination feeâ€ť and a $10.95 charge that Cuomo called a â€śmonthly maintenance fee.â€ť On the screen, Alvarezâ€™s bill showed the $10.95 amount was listed under â€śpurchases and cash advances.â€ť
â€śTheyâ€™re looking for that financial, a life preserver. What they donâ€™t realize is that thereâ€™s an anvil at the end of it.â€ť Manning said.
Manningâ€™s Web site promotes two upcoming documentaries meant to elicit laughs and groans at the expense of credit card companies and other businesses â€“ Morgan Spurlockâ€™s â€śWhat Would Jesus Buy?â€ť and Danny Schechter's â€śIn Debt We Trust.â€ť Manning is featured in both.
Cuomo pointed out that Applied Bank, which issued Alvarez her card, has been embroiled in legal trouble over its business practices. He also featured a former Applied employee describing the fee-based structure of the company. What he didnâ€™t explain, however, is that Applied deals specifically with subprime borrowers who might have trouble getting a credit card otherwise. According to
â€śApplied Card Systems is the servicing arm for Applied Card Bank (formerly Cross Country Bank), a subprime consumer lender that issues secured and unsecured credit cards to customers with dubious or limited credit histories. Applied Card Systems processes payments from and provides customer service to holders of subprime Visa and MasterCard accounts from offices in
Companies that supply such cards have to factor in their clientsâ€™ credit histories, as Stinebert explained: â€śDo we make people that are paying on time pay a higher rate and have fewer options, and, or do you make the people that are not making the payments on time have to pay according to what their risk, analyzed, really is?â€ť
Stinebert said getting a credit card is â€śa business decision that each individual has to make on their own.â€ť
â€śOnce again, I think I go back to that making sure the application is very clear on what the fees are going to be. You make that decision.â€ť Stinebert told Cuomo.
Cuomo wasnâ€™t satisfied.
â€śBut it seems to me you really go after those people if they stray just a little bit. â€¦the penalties are so fast. Doesnâ€™t that seem wrong on some level?â€ť he said. Later he added, â€śYou can justify it any way you want, but once somebodyâ€™s on the ropes, theyâ€™re on the ropes, Chris â€“ you know that.â€ť
â€śYou must be careful; you must read the fine print,â€ť Cuomo concluded. Then he made a plea for more stories like Celinaâ€™s: â€śIf you have a story like this, if something has happened to you, please, go to ABCNews.com. Let us know. Send us an e-mail. Please, weâ€™re looking for them.â€ť
The March 27 story continues a trend of ABCâ€™s poor reporting on the subject of debt. As the Business & Media Institute found in an earlier study, the networks blame lenders for debt, casting borrowers as blameless victims instead of consumers with responsibility for their finances.