Payday at CBS: ’60 Minutes’ Cashes in
on Another Business Attack
Network uses disgruntled customers,
competitor and frustrated official to target loan companies.
By Dan Gainor
May 19, 2005
Â Â Â Â At CBS’s ‘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.
Â Â Â Â 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.
Â Â Â Â For the industry’s 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).
Â Â Â Â Pelley didn’t make it past his introduction before
comparing the businesses to “loan sharking.” That’s just the first
in a long litany of complaints built around one customer’s lawsuit,
although the nature of the suit was never explained.
Â Â Â Â 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
Â Â Â Â That wasn’t 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 didn’t point out the conflict.
Â Â Â Â 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 Kucan’s 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.
Â Â Â Â Even Kucan was relatively honest about the customer
mindset associated with payday services and focused on the high
interest rates. “That figure isn’t flashing in front of you. What’s
flashing in front of you is the dollars you’re looking for,” he
said. "The percentage rate isn’t something you’re 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 don’t 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 that’s exactly what it was.”
Â Â Â Â For more information on how the media
cover litigation stories, read the Business & Media Institute Special