In Retrospect

Thank you all who left interesting comments on the preceding blog post.

In my withdrawal phase, I'm reliving and rethinking many of the issues around Prosper. Interestingly enough, the main thought that bubbled to the top today was the idea that Prosper management are fundamentally, at a very basic level, dishonest.

Now this is a tough accusation to make and not one I'm making lightly. Perhaps there is a better way to say it, but I'm not now, in the final days, going to hunt around for words. If any Prosper person wants to rebut this, I'll give them access to my blog for a rebuttal post.

I also know, from my days as a IT worker, that people like me think very differently than top management thinks. I've spent lots of time with executive-level management in meetings (and a few beer-drinking sessions) to know that they and I look at certain issues differently from a very fundamental perspective. So there may be another likely explanation for the way that I'm putting this together. I'd like to hear it and will make space available for any credible rebuttal.

When I'm saying Prosper is dishonest, I'm not talking about the misleading advertisements they posted. At some level I think most advertising is misleading and it behooves the potential buyer of the service offered to dig deeper before contracting for the service.

Certainly, I am talking about the way they manage their forums and what they allow in them and how they edit, redact and delete messages to make sure that only specific impressions are conveyed.

I thought that management wouldn't allow this if they really knew. I thought that it was a low-level thing. But then I started thinking about what Prosper is telling us about fraud prosecutions and I wonder.

It is well-known at prospers.org, that Prosper prosecuted an identity thief, Victoria Crawford, for taking out numerous loans on Prosper with a fraudulent identity. Also see Prosper Report (it's on the home page). Now in this instance, there are a few facets to the story. Firstly, it was a lender, PoloniusNot, that raised some suspicion in the old prosper forums, now archived at Prosper Report. The actual court case then got dug up by some of our resident lawyers.

Prosper has never said anything official about it, as far as I know. Now they did repurchase those loans from lenders, so they made the lenders whole and then went after Victoria Crawford to get their money back. But why not say anything?

Then comes Prosper Days 2008, after Prosper has hired Doug Fuller to get tough on collections and fraud, and after Doug has indicated that Prosper will take fraudulent (or can-pay, won't-pay borrowers) to court. (Prosper months ago initiated actions to repurchase certain target loans from lenders to make prosecutions simpler. Note - months - lots of time to get their ducks in a row.)

What legal actions does Chris Larsen talk about at Prosper days 2008? Read Traveler505's blog. The case was a case of bank fraud and Prosper had a very peripheral role in it and certainly did not initiate anything. They were merely responding to requests by law enforcement officials.

Why does Chris Larsen misrepresent Prosper's role in this? Why did he not mention the one case that they did initiate? Why no mention of the progress of their own cases for the loans that they repurchased? Sub-judice? I don't know.

Try this on for size. They went after Victoria Crawford because essentially she stole their money, once the fraud was unearthed on the forums, they were obligated by their ID theft warranty to repurchase the loan and so they attempted recovery. As for the rest, they simply don't care. They're dragging their feet and to conceal the lack of progress, they lie.

So, when the most senior Prosper executive talks to their customers at their flagship event, he doesn't respect those customers enough to tell them anything that approximates the truth, but misrepresent facts about Prosper's involvement in legal proceedings. That is fundamentally dishonest at the highest level of the company.

Next blog post topic. Why doesn't Prosper management post on their own blog?