January 17, 2009
The Tennessean, out of Nashville, jumps into the
fray with an article slamming
payday lenders.
Click on the image on the right to read the story.
This would be a great story to work on for Borrow Smart.
Two very similar situations come to mind that Borrow Smart
has dealt with recently in other states. Both were
feature stories except that Borrow Smart was intimately
involved in the story -- not just quoted in the story.
See these examples below.
-
Borrow Smart Mississippi actively responds and gets
positive and balanced coverage.
Read about it
here.
-
Borrow Smart Alabama responds to newspaper request
and changes the reporters preconceived ideas.
Read
about it here.
When you go to the links above, do you see any difference
between these stories and the Tennessean story?
In both of the examples above, at the very first hint of
a story we began an intense dialog with the reporter and
provided the reporter with data for a balanced story.
As you can see, It made a big difference.
There are several points, from a public perception and
industry point of view that are worth more discussion and further
thought. They are:
-
The article and the reporter are obviously quite
biased. Just look at the headline
"Payday lenders' clients find frequent loans
costly." If you are not convinced by
that, count the total words in the article and then
count those that address
the industry side. We'll spare you -- there
are around 1,100 total words and there are less than
200 words reserved for industry responses. And
to make sure the industry responses are not seen
they bury them at the end of the article!
-
Where were the quotes or testimonials from people
who have used the services wisely? The
paper finds one disgruntled customer. We
all know that the vast majority of our customers are
happy and pleased with our service (as
you can see here). Why was
there no discussion about the number of complaints
at the Department of Financial Institutions?
Why didn't the industry offer testimonials?
-
The Department of Financial Institutions believes
financial literacy training is important. It is
very important and is something the industry should
undertake as Borrow Smart has done (click
here). Don't wait for the government to do
it. And, we know the industry can get the
credit we deserve when we do it as
you can see here.
-
The Skiba and Tobacman study comparing bankruptcy to
payday loans is ridiculous. There is
absolutely no proof
that payday loans directly cause bankruptcy --
which even the victim points out. Of course, that
portion of the story is buried at the end of the article
where it is less likely to be read.
-
Two themes jump out of this story that we are
beginning to see in all of these types of articles:
-
"15 States and Washington have effectively banned
payday lending..." This is 100% correct and is
a devastating phenomena we as we
discussed at length here.
-
"Even
President-elect Barack Obama made it one of his
campaign platforms to cap interest rates on
short-term loans at 36 percent..." That also
is 100% correct and may very well come to pass if we
don't all work together as short-term lenders
to try and stop this freight train.
It is sad to see such a one-sided, biased article in a
neighboring state where the payday industry got it's
start. We hope the industry plans a well thought
out response. Letting these stories go
unchallenged will do nothing but lead to much bigger
problems as we have seen in state after state (15 states
to quote the article). Of course, we have found
that being actively involved before the story is the
best approach, when it can be done.
We can fully expect much more of this as the new
administration raises the awareness of our industry with
their 36% rate cap plan. This will work our
adversaries and their like minded friends in the press
into a frenzy. They will be back with much, much
more. We had better be prepared to deal with it
the unless we want to see the "15 states" grow!
Dealing with it means that we work together to be as
proactive in the media as we are in the statehouse.
The battle has clearly moved into the media. For
the sake of our industry and our friends in Tennessee,
we hope there is a plan to deal with this!
www.BorrowSmartAlabama.com
www.BorrowSmartMississippi.com
www.CouncilForFairLending.com
