Payday at CBS: 60 Minutes Cashes in on Another Business Attack
Network uses disgruntled customers, competitor and frustrated official to target loan companies.
At CBSs 60 Minutes the formula for
covering lawsuits against businesses has been pretty consistent. The
network has turned to negative sources to attack the business and
ignored most that would support the firm.
The May 18, 2005, program attacked payday companies that provide loans against upcoming checks. Reporter Scott Pelley lined up the opposition: two unhappy customers (one who was filing suit), a competitor, a frustrated would-be regulator and a fired employee. Those sources criticized the company, its profit and its business practices. One even claimed he was almost like being addicted to these loans. Pelley did little to promote any concept of personal responsibility.
For the industrys defense? Former Carolina Panthers wide receiver Willie Green, who owns three payday stores. Including this one source was an improvement for CBS. In a March 2005 study of media coverage of litigation, the Business & Media Institute found CBS had the highest total of stories where the defendant had no face time 47 percent (30 out of 64).
Pelley didnt make it past his introduction before comparing the businesses to loan sharking. Thats just the first in a long litany of complaints built around one customers lawsuit, although the nature of the suit was never explained.
The story began with customer Sandra Harris, who reportedly borrowed $2,510 and managed to rack up roughly $10,000 in fees roughly 400 percent interest. Harris downplayed her own responsibility, claiming she continued the loans by roll[ing] them over a couple of times. In reality, Harris would have had to reauthorize the loan easily more than a dozen times, after borrowing only $500 initially. In other words, she kept borrowing again and again.
That wasnt fair, complained Harris, who said nobody told you about the bad side. Jim Blaine, chief executive of the North Carolina State Employees Credit Union, went even further, comparing it to the consumer getting in the ring with Mike Tyson. Neither Blaine nor the reporter mentioned that the credit union is a competitor of the payday stores. Buried much later in the story, Pelley explained, The needs of payday customers are typically too small for a bank or a credit union. Rather than address those needs, Blaine chose to target an up-and-coming competitor, and Pelley didnt point out the conflict.
Later in the story, Pelley introduced viewers to John Kucan, a former Connecticut state trooper who borrowed $850 from a payday store and is now suing them after paying $2,400 in fees. Pelley compared Kucans payments to the 400 percent interest Harris paid, but this time he was off by about 120 percent. The actual number is roughly 280 percent.
Even Kucan was relatively honest about the customer mindset associated with payday services and focused on the high interest rates. That figure isnt flashing in front of you. Whats flashing in front of you is the dollars youre looking for, he said. "The percentage rate isnt something youre even considering at the time." Buried in the story were more reasons why customers seek out these high-fee loans:
According to Pelley: the loans are easy to get.
You dont need credit, just a job and a checking account, he
Unhappy customer Sandra Harris explained: All of it sounds,
like, you know, quick and easy, and thats exactly what it was.