It’s as if the media look for other people to blame for consumers’ financial irresponsibility. CNN “American Morning” found yet another business to blame for people’s credit card debt in its June 6 broadcast.
Even before broadcasting the hit piece, co-host John Roberts presented debtors as victims in his tease, saying the segment would explain how “a system that’s supposed to be fair, is stacked against the little guy.”
Roberts opened fire on the National Arbitration Forum (NAF) claiming that debt “arbitrators rule in favor of credit card companies 99.99 percent of the time.”
Arbitration is a way to resolve disputes between cardholder and creditors worked into many credit card contracts. If a cardholder fails to make payments, the disputes can be solved by private arbitrators rather than in public small claims courts.
CNN personal finance editor Gerri Willis called the situation “maddening,” and complained that “these arbitrators make decisions in mere minutes, they have very little information at their fingertips, and they are typically paid by the credit card industry.” She also directly attacked NAF, citing a BusinessWeek story, calling the organization one of the “worst actors in this industry.”
Willis warned that “there’s no better reason for paying your credit cards on time,” than avoiding arbitration.
What Roberts and Willis didn’t tell viewers is that the 99.99 percent figure, presumably taken from [1]BusinessWeek magazine’s lengthy anti-creditor story, came from an attorney’s lawsuit specifically regarding the state of
NAF spokesperson Christina Doucet told the Business & Media Institute that “outcomes in [public small claims] court or arbitration are about the same – 96 percent,” because the “cases are very straightforward.” According to Doucet, most consumers admit that they didn’t pay what they owed.
According to Doucet, the arbitration process provided by NAF offers more protection for consumers than court would, including the right to submit claims “in their own words,” no response fees “to defend a case in a document hearing,” and consumers get “twice the notice a consumer receives in litigation.”
Willis did include a brief statement from NAF that said, in part, the organization is “committed to the administration of a fair and neutral process.” But according to Doucet, the statement sent to CNN was much longer and included multiple criticisms of the BusinessWeek story, including the charge that the publication used “deliberately manipulated” statistics. Willis didn’t mention that in her report.
NAF also referred CNN outside documents including a series from the Boston Globe in 2006 that illustrated “arbitration is the cure rather than the culprit,” according to Doucet,
Even the BusinessWeek story which [1]bashed NAF extensively offered context left out by “American Morning.” It attributed the 99.998 percent statistic to a lawsuit “filed by the
BusinessWeek also mentioned that a majority of people in arbitration could be guilty of not paying their bills: “Even consumer advocates concede that most people accused of falling behind do owe money,” according to the magazine article which argued that “the amounts are often in dispute.”
The NAF was the subject of [2]another hit piece May 29, when ABC’s “Good Morning America” aired a segment about credit arbitration based on the
CNN’s June 6 report is just the latest example of the lengths the media go to blame businesses rather than borrowers for debt. The Business & Media Institute’s special report [3]“Debt Who’$ Responsible?” said that lenders and related companies were blamed for borrowers’ debt troubles six times as often as borrowers.