What is the justification for using a photo that isn't yours? The only one I can think of is to deceive. That doesn't mean the listing is a fraud, but it does raise suspicions... Why does he want people to think that's his mother?
Prosper won't take action because probably a quarter of all listings use bogus or dubious pictures. But if someone calls it to my attention, I won't bid on it (assuming I still lent). If deception is afoot, it's best to steer clear.