CNN Uses 'Manipulated' Number to Attack Debt Arbitration Group
Itâ€™s as if the media look for other people to blame for consumersâ€™ financial irresponsibility. CNN â€śAmerican Morningâ€ť found yet another business to blame for peopleâ€™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 â€śa system thatâ€™s supposed to be fair, is stacked against the little guy.â€ť
Roberts opened fire on the National Arbitration Forum (NAF) claiming that debt â€śarbitrators rule in favor of credit card companies 99.99 percent of the time.â€ť
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 â€śmaddening,â€ť and complained that â€śthese arbitrators make decisions in mere minutes, they have very little information at their fingertips, and they are typically paid by the credit card industry.â€ť She also directly attacked NAF, citing a BusinessWeek story, calling the organization one of the â€śworst actors in this industry.â€ť
Willis warned that â€śthereâ€™s no better reason for paying your credit cards on time,â€ť than avoiding arbitration.
What Roberts and Willis didnâ€™t tell viewers is that the 99.99 percent figure, presumably taken from BusinessWeek magazineâ€™s lengthy anti-creditor story, came from an attorneyâ€™s lawsuit specifically regarding the state of
NAF spokesperson Christina Doucet told the Business & Media Institute that â€śoutcomes in [public small claims] court or arbitration are about the same â€“ 96 percent,â€ť because the â€ścases are very straightforward.â€ť According to Doucet, most consumers admit that they didnâ€™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 â€śin their own words,â€ť no response fees â€śto defend a case in a document hearing,â€ť and consumers get â€śtwice the notice a consumer receives in litigation.â€ť
Willis did include a brief statement from NAF that said, in part, the organization is â€ścommitted to the administration of a fair and neutral process.â€ť 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 â€śdeliberately manipulatedâ€ť statistics. Willis didnâ€™t mention that in her report.
NAF also referred CNN outside documents including a series from the Boston Globe in 2006 that illustrated â€śarbitration is the cure rather than the culprit,â€ť according to Doucet,
Even the BusinessWeek story which bashed NAF extensively offered context left out by â€śAmerican Morning.â€ť It attributed the 99.998 percent statistic to a lawsuit â€śfiled by the
BusinessWeek also mentioned that a majority of people in arbitration could be guilty of not paying their bills: â€śEven consumer advocates concede that most people accused of falling behind do owe money,â€ť according to the magazine article which argued that â€śthe amounts are often in dispute.â€ť
The NAF was the subject of another hit piece May 29, when ABCâ€™s â€śGood Morning Americaâ€ť aired a segment about credit arbitration based on the
CNNâ€™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 Instituteâ€™s special report â€śDebt Whoâ€™$ Responsible?â€ť said that lenders and related companies were blamed for borrowersâ€™ debt troubles six times as often as borrowers.