24 September 2009

The Credit Crunch and the News Media

Lately I have seen a lot of stories on the credit crunch on practically every media outlet here in the Tampa/St. Petersburg area. However, I have read stories on the credit crunch that I feel are nothing more than scaring the public, and that bothers me.

These acts being committed by the greedy big banks are byproducts of the credit crunch:

Interest rates on credit cards being jacked up so high on purpose that you cannot pay it off.

Creditors playing games with the FICO credit score.

Credit limits being trimmed for no reason despite a customer’s satisfactory credit history.

Customers being denied lower interest rates on credit cards. If a customer’s APR was so high banks would lower the rate on request in the interest of retaining good business.

Well, let me give you the low down on how the credit crunch is being covered by the media, especially The Tampa Tribune, the St. Petersburg Times and Bay News 9 (our 24-hour local news channel in the Tampa Bay area). Back in the old days journalism was just old fashioned common sense; you could believe in what the news media were saying. Now with the real estate bust and the credit crunch that followed, the news media anymore turns to a kind of journalism called speculative and sensational journalism. Why?

It all boils down to two words: Blood Sells.

In the newspaper industry, what the newspapers do nowadays to report on the credit crunch is to either write stories using their own reporters or use a story from a news service such as the Associated Press or the New York Times. The idea here is for a story on the credit crunch to be written in a fashion that will place fear in the general public; in other words, to get the public scared about what may happen. What is this being done for? The answer is simple: Sell more newspapers!

On the other hand, in the television news industry stories on the credit crunch are basically done in the same way as newspapers. For the past few years, Bay News 9 has had an alliance with several partner newspapers in the Tampa Bay area including the St. Petersburg Times; that means stories and ideas are exchanged between one another. A reporter will write a story on the credit crunch and interview people such as a bank representative and then in preparation for putting the story on the air the reporter (along with their supervisory editor) will take statements made out of context. Don’t forget, that same story has to be written for a television station’s news web page. The main idea here is that a story on the credit crunch is to be presented on television in a way that it will place fear in the general public, just like how it would be written in the newspaper. Again, why does a television news outlet do a story on the credit crunch in order to create maximum fear in the public for? The answer is simple: Increase the viewer ratings!

Now on to another note. I subscribed to The Tampa Tribune for a few years; it was a good paper if you wanted an alternative to the St. Petersburg Times as far as their reporting is concerned. When the credit crunch came along The Tampa Tribune began carrying stories on this subject practically every day; these stories I feel were written to place fear in the public. I got so fed up of how The Tampa Tribune was covering the credit crunch to the point that people were getting scared that I ended up cancelling my subscription.

OK. If you want the real truth on the credit crunch, this is how I look at it.

Let’s start with the banks. The greedy big banks whose purpose is to treat its customers – even its best customers (who of course pay their bills on time among other things) – like second class citizens. When the big banks were being given federal bailout money in order to recoup their losses due to the bad mortgage market it was in the hope that access to consumer credit would be loosened. Instead, the big greedy banks sit there and hoard that money while at the same time treat its customers like second class citizens such as jacking up interest rates or cutting credit lines.

After all, banks who practice poor customer service by jacking up interest rates and/or cutting a customer’s credit line (such as a credit card’s credit limit) will eventually suffer in the form of lost business. The majority of customers practice good money and credit habits by only spending within their means.

How about mortgage modifications? How about the person who got laid off through no fault of their own and is struggling to make ends meet? Banks and mortgage companies – according to what’s reported in the media – like to mess up a person’s credit report when it comes to having to modify the terms of a mortgage. In this day and age, if a borrower as a legitimate reason to have his or her mortgage modified to allow for lower monthly payments, he or she should be allowed to do so without any black mark being noted on a credit report. After all, it’s these mortgage loan officers that approved these loans in the first place, knowing that he or she would not qualify.

Now for a horrific credit crunch story that I feel was mishandled in the media. A homeowner who had a second mortgage and who wanted to sell can do so; anything owed on a second mortgage would be paid at closing (provided the funds were available of course). Instead, the bank who holds the second mortgage keeps the homeowner in the home until the second mortgage is paid in full. The end result: A homeowner who cannot sell even though the bank holding the second mortgage would be paid at the closing table. In my opinion, I would not be dealing with this mortgage lender at any time, period, no questions asked.

OK, OK. I have some advice for those of you who feel victimized by your greedy big bank as a part of the credit crunch.

1. If you receive a notice of adverse action in the mail – whether it may be your interest rate jacked up or your credit limit being decreased arbitrarily despite being a good customer – call your bank and request to speak to a senior supervisor about your situation. It’s worth a try.

2. If your bank balks, there’s still hope. If you can qualify in your area, consider taking your banking and financial business to a credit union. Believe me, credit unions are more better to deal with than a bank as far as customer service is concerned. After all, credit unions treat you like a real person compared to these greedy banks who only treat you like a number as well as pay lip service to courteous customer service. And besides, when you are a member of a credit union you’re not just a member – you are an owner. After all, credit unions answer to their owners, which are its members, while banks answer to their stockholders.

3. Post your experience with your unfriendly and greedy bank somewhere on a complaints board or forum. I highly recommend RipOffReport.com, as it is like creating your own website letting others know of your bad experience so that others don’t fall into the same fate.

After all, according to an email newsletter from Michael Moore (Fahrenheit 9/11, SiCKO, and the upcoming movie Capitalism: A Love Story (starts nationwide 2 October 2009)) contrary to what the media is saying about the credit crunch the sky is not falling. Yes you can still get that mortgage for the home you want or that loan for the vehicle you want; it will take a little more looking around to get a decent loan at a decent rate.

Now for one more thing.

For the past few months I have seen a billboard on the left side of southbound Interstate 275 in Downtown St. Petersburg just before you approach the exit for Interstate 375, Exit 23A. This billboard sums it all up about the current state of the American economy:

“Recession 101: Quit obsessing about the economy; you’re scaring the children”.

The message is superimposed on college rule paper. A wonderful job done by the creator of that billboard.

If I could afford a billboard, here’s what I would say:

“Journalism 101: Quit obsessing about the credit crunch; you’re scaring the public”.

What the Tampa Bay area news media ought to do is to write and broadcast or publish stories in a positive manner which would bring the credibility that once was how the news media reports the news. Don’t take stories and shuffle them out of context in a way to create maximum fear and distrust in the public.

1 comment:

Anonymous said...

Hear Ye, Hear Ye!! Finally, someone on this thing called the internet has some common SENSE!! Thank you Edward for your cunning intelligence and no-nonsense attitude!! America needs more EDWARD RINGWALD'S!!!!