Educating the Poor for Positive Press and Profit: Part II

"There's always been money to be made from people who have no  money"In last week’s post, I started this series by talking about the issue of poverty.  This week, I want to talk about how banks need to take action in order to be put in a positive light once again.

It should be no secret that financial institutions (especially those in the lending business) have been looked at in a negative light for quite some time.  With the economy taking a downturn over the past few years, people continuously look for someone to blame, and banks become an easy target.

One such example is Brian Grow, now a senior writer for BusinessWeek, who was nominated in 2008 for a National Magazine Awards and two Loeb Awards for his series on the business of poverty.  In this series, Grow argues that financial institutions have increased the exploitation of those in poverty to reap immense profits for themselves.  This is evidenced by the appearance of the unethical business practice of several businesses, which he investigates in this documentary.

Grow begins by researching J.D. Byrider, a car dealership offering credit to any customer regardless of their credit history.  In the documentary, Grow interviewed Roxanne Tsosie, a single mother struggling to get by on a salary less than $20,000 a year.  Her new job required her to have a vehicle, but she had no credit and no money for a new car.  Tsosie, shocked to discover her ability to drive off J.D. Byrider’s parking lot with her new vehicle the same day she walked into the business, became overjoyed that her problems seemed to have been washed away.  Her elation turned to devastation, however, two months later.  She returned the vehicle to the dealership due to her inability to make the monthly payments and feed her family at the same time.

It’s easy to be angered by a story like this, especially when one sees the horrible look of desperation on Tsosie’s face as she recounts her story.  The question lies in whether J.D. Byrider did anything wrong in this situation.  Their business is 100% legal, yet the documentary exposes them as crooks.

In the same documentary, Grow researched the story of April Dial, a young girl with diabetes.  In order for her mother to get her emergency medical help to save her life, she was required to quickly sign an agreement that, unbeknownst to her, was authorizing the hospital to sell her hospital debt to a third-party organization (Complete Care, Inc).  This company not only charged her interest, but also required large monthly payments to avoid delinquent credit reporting.  You can feel the devastation in the voice of April and her mother, who appear to barely be able to make ends meet without the high medical bills.

Again, this company did nothing wrong from a legal standpoint.  One could argue that the Dial’s were taken advantage of due to their ignorance.  Once again, a large business profits greatly because of their exploitation of the ignorance of those who are not financially savvy.

Here are a couple more examples of negative attitude towards financial institutions.  Paul Grignon, a Canadian artist, created a documentary entitled “Money as Debt.”  In his short film, he attacks the banking industry as a whole, claiming that banks are making enormous profits by lending money that doesn’t exist.  Although he uses broad generalizations which refute most of his argument, he does help to illustrate the negative attitude towards the financial services industry.  Peter Jackson, a British blogger, reported in his 2006 article “The Banks, Sensitive to Their Bad Press, Are Taking Steps to Restore Popularity” takes direct jabs at the banking industry, claiming that customer service has taken a backseat to larger profits with overseas business.  There are people out there who sincerely do not trust banks, and this kind of negative press is not good for business.  My suggested new policy below will put banks in a positive light once again, while at the same time aiding in the elimination of a severe problem in the United States.

*****Stay tuned next week for Part II!!*****

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~ by Scott L. Clark on July 20, 2010.

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