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[Chamatrain]

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From the point of view of a financial company, Prosper 1.0 can look pretty negligent.
 ...

From the point of view of nearly anybody with 8th grade reading comprehension, the written promises and claims of Prosper Marketing Inc. were blatant lies.  Thus, dealings with the company after Prosper 1.0 must have been made by folks who enjoy participating in that kind of an operation.

[xraider]

Havastat, According to Ericscc.com you started lending in March, 2008.  That was after many of us quit lending due to Prosper's concerted efforts to rally the wagons to protect itself at the blatant expense of the lenders.  I'm sure you've read my comments about the surreptitious rules changes, where Prosper thought it could impose its new TOS without lender approval.  You've read about Prosper's deletion -- with no warning -- of its message boards, and its abandonment of its fraud guarantee? 

You followed the debacle of the egotistical collections dude, Doug Fuller, who had never lost a collections action -- until they got NOTHING on their Prosper suits?

I'm sure you're aware that in violation of the terms of service, Prosper did not sell even one of my defaults?

I have to agree with Bama and Chamatrain that Prosper is a fraudulent company that had no intention of living up to its terms of service.  If the SEC and the class action force them to do it for those who now invest, more power to them.  However, I hope that the class action puts Prosper out of business.

[ira01]

Havastat, According to Ericscc.com you started lending in March, 2008.  That was after many of us quit lending due to Prosper's concerted efforts to rally the wagons to protect itself at the blatant expense of the lenders.  I'm sure you've read my comments about the surreptitious rules changes, where Prosper thought it could impose its new TOS without lender approval.  You've read about Prosper's deletion -- with no warning -- of its message boards, and its abandonment of its fraud guarantee?  

You followed the debacle of the egotistical collections dude, Doug Fuller, who had never lost a collections action -- until they got NOTHING on their Prosper suits?

I'm sure you're aware that in violation of the terms of service, Prosper did not sell even one of my defaults?

I have to agree with Bama and Chamatrain that Prosper is a fraudulent company that had no intention of living up to its terms of service.  If the SEC and the class action force them to do it for those who now invest, more power to them.  However, I hope that the class action puts Prosper out of business.

+1 on all of that.

In addition, as was chronicled here at the time (including in threads started by me), Chris Larsen was giving interviews to anyone who would listen spouting absurdly understated Prosper default rates, at a time when it must have been clear to him that those numbers were completely bogus (for a variety of reasons that many here (including me) expressed at length and in great detail both here and on Prosper's own official forum).  For example, see http://www.prospers.org/forum/empty-t5708.0.html

[msava]

Many of my loans said BK charge-off, and many say in collections. Are we to believe Prosper is still trying to collect and will return some money to us? I thought I was completely out, but not if more money is being collected.

At this point, MsA, I'd ask Prosper the status of every BK loan not yet discharged.  You never know if Prosper failed to file a proof of claim.....

The ONLY loan I've received a dime on in 12 months is the one where Prosper failed to file a proof of claim in BK so MY experience is that collections is no more effective now than it was 5 years ago.

Should I send one email listing every BK or should I put this in snail mail?

[xode]

Got mine.

One question newbies might want to know is, who are these plaintiffs?

It's not uncommon for class actions these days to be started by lawyers for the benefit of lawyers. These days lawyers list agreeable aquaintences as plaintiffs willing to be figureheads in a suit that ends with the lawyers getting big fees, and the class getting maybe a $5 coupon off a new purchase as their "relief."

Do we have any reason to think this class action won't turn out that way? Will the class action lawyers actually work for the class's interest here? Why?

I'll second this.  One item that will help newbies know who these plaintiffs are is for these plaintiffs to publicly post their Prosper screen names.

Got mine.

One question newbies might want to know is, who are these plaintiffs?

It's not uncommon for class actions these days to be started by lawyers for the benefit of lawyers.

At least two of the class representatives are long time Prospers.org members who still post here regularly.  Neither knew the lawyers representing the class before the class action (one of those lawyers came here looking for plaintiffs shortly after the SEC's cease and desist letter against Prosper). 

And now you can do me the courtesy of posting the Prosper screen names of the lead plaintiffs for this case here so that I can know who these lead plaintiffs are.

[Beerbud1]

Got mine.

One question newbies might want to know is, who are these plaintiffs?

It's not uncommon for class actions these days to be started by lawyers for the benefit of lawyers. These days lawyers list agreeable aquaintences as plaintiffs willing to be figureheads in a suit that ends with the lawyers getting big fees, and the class getting maybe a $5 coupon off a new purchase as their "relief."

Do we have any reason to think this class action won't turn out that way? Will the class action lawyers actually work for the class's interest here? Why?

I'll second this.  One item that will help newbies know who these plaintiffs are is for these plaintiffs to publicly post their Prosper screen names.

Got mine.

One question newbies might want to know is, who are these plaintiffs?

It's not uncommon for class actions these days to be started by lawyers for the benefit of lawyers.

At least two of the class representatives are long time Prospers.org members who still post here regularly.  Neither knew the lawyers representing the class before the class action (one of those lawyers came here looking for plaintiffs shortly after the SEC's cease and desist letter against Prosper). 

And now you can do me the courtesy of posting the Prosper screen names of the lead plaintiffs for this case here so that I can know who these lead plaintiffs are.

Good Luck! No one here is going to help you! Try doing some indepandant research! Why would anyone post that info. in The Lobby?

[xode]

Got mine.

One question newbies might want to know is, who are these plaintiffs?

It's not uncommon for class actions these days to be started by lawyers for the benefit of lawyers. These days lawyers list agreeable aquaintences as plaintiffs willing to be figureheads in a suit that ends with the lawyers getting big fees, and the class getting maybe a $5 coupon off a new purchase as their "relief."

Do we have any reason to think this class action won't turn out that way? Will the class action lawyers actually work for the class's interest here? Why?

I'll second this.  One item that will help newbies know who these plaintiffs are is for these plaintiffs to publicly post their Prosper screen names.

Got mine.

One question newbies might want to know is, who are these plaintiffs?

It's not uncommon for class actions these days to be started by lawyers for the benefit of lawyers.

At least two of the class representatives are long time Prospers.org members who still post here regularly.  Neither knew the lawyers representing the class before the class action (one of those lawyers came here looking for plaintiffs shortly after the SEC's cease and desist letter against Prosper). 

And now you can do me the courtesy of posting the Prosper screen names of the lead plaintiffs for this case here so that I can know who these lead plaintiffs are.

Good Luck! No one here is going to help you! Try doing some indepandant research! Why would anyone post that info. in The Lobby?

It turns out that you are already so wrong about me not getting help but I'll let you do your own "independent research" on that.  Incidentally, by "here" I meant anywhere in the prospers.org forum, not necessarily in a prospers.org public board.

[havastat]

...
From the point of view of a financial company, Prosper 1.0 can look pretty negligent.
 ...

From the point of view of nearly anybody with 8th grade reading comprehension, the written promises and claims of Prosper Marketing Inc. were blatant lies.  Thus, dealings with the company after Prosper 1.0 must have been made by folks who enjoy participating in that kind of an operation.

 This is the class action thread. My comments reflect my views on the class action and what it claims.

The class action lawsuit is very narrow. It doesn't claim Prosper committed fraud, broke its promises, or anything of the sort. Its claim is simply that Prosper offered unregistered securities. On that narrow issue, I think it's possible to look at Prosper's failure to put its product into the right legal category as a mistake rather than deliberate wrongdoing. It's understandable that internet start-up types wouldn't realize that their product would get classified as "securities" and subject to a associated regulations, just as it's understandable (even though it similarly seems obvious in hindsight) that SEGWAY's makers wouldn't realize that their product would be considered too fast for sidewalks and too slow for streets and hence get banned completely in many places.

Because the class action doesn't deal with the issues, people whose real beef is fraud, broken promises, etc. might want to think twice about being in it. Any class action settlement will likely include a general release from all claims. So people whose real beef is fraud, breech of contract, or similar will probably never get a chance to pursue those sorts of claims if they stay in the class action. If they want to do that, they'd likely need to opt out of the current class action and pursue a separate, more general lawsuit with a broader set of claims. (Of course this isn't legal advice, consult a lawyer, and all that.)

[mothandrust]

Because the class action doesn't deal with the issues, people whose real beef is fraud, broken promises, etc. might want to think twice about being in it. Any class action settlement will likely include a general release from all claims. So people whose real beef is fraud, breech of contract, or similar will probably never get a chance to pursue those sorts of claims if they stay in the class action. If they want to do that, they'd likely need to opt out of the current class action and pursue a separate, more general lawsuit with a broader set of claims. (Of course this isn't legal advice, consult a lawyer, and all that.)

It's taken 3+ years just to get to this point (trial hasn't even started) and in that time no lender (or group of lenders) has found it worthwhile to get a lawyer and pursue any of those claims. 

The claims are legitimate, but because our broken system is such that even a lender who lost $10,000 on Prosper is not going to want to spend $100K+ in legal fees the hope of trying to get it back.

Even the lawyers here who lost their own money are not willing to take their time and energy to sue Prosper. 

You can keep saying, "Someday, my prince will come" but I don't think he's going to show up.

[Urbi_et_Orbi]

It is a little surprising to me, after more than 3 and a half years, to see that several people here appear to not have bothered to read the actual complaint - and then proceed to discuss, based on faulty assumptions, when even a cursory review of the third amended complaint would answer many of the questions being posed.

It is good to see people take an active interest in this case, but I would encourage everyone to do some homework, be informed class members, and not come to Org unprepared.

http://www.prosperclassaction.com/documents

 

[ira01]

The class action lawsuit is very narrow. It doesn't claim Prosper committed fraud, broke its promises, or anything of the sort. Its claim is simply that Prosper offered unregistered securities. On that narrow issue, I think it's possible to look at Prosper's failure to put its product into the right legal category as a mistake rather than deliberate wrongdoing. It's understandable that internet start-up types wouldn't realize that their product would get classified as "securities" and subject to a associated regulations,

I don't think so, for several reasons.  For one thing, Lending Club certainly realized that it needed to register its loans as securities with the SEC long before Prosper -- IIRC, even AFTER LC shut down to undergo the registration process, Prosper was making public statements that it did not need to do so.  Statements that were clearly bogus in light of the SEC's cease and desist, as well as the numerous settlements Prosper made with state regulators.  Also noteworthy, is that IIRC Prosper consulted with securities lawyers before it opened about the need for registration.  Yet so far as I am aware, Prosper has NOT offered as a defense that it was informed by competent and independent lawyers that it did not need to register.  That leads to the obvious question of whether Prosper was actually told at the outset by its lawyers that it should register, yet chose not to for business reasons. 

Because the class action doesn't deal with the issues, people whose real beef is fraud, broken promises, etc. might want to think twice about being in it. Any class action settlement will likely include a general release from all claims. So people whose real beef is fraud, breech of contract, or similar will probably never get a chance to pursue those sorts of claims if they stay in the class action. If they want to do that, they'd likely need to opt out of the current class action and pursue a separate, more general lawsuit with a broader set of claims. (Of course this isn't legal advice, consult a lawyer, and all that.)

I disagree with this as well.  Generally, a class action settlement releases only claims that were brought in the lawsuit (or ones closely related to them) -- a general release of ALL claims would be unusual.  Moreover, it is highly unlikely that any other P1 claims will ever be litigated against Prosper, for several reasons.  A big one is that except for a handful of lenders who lost a mountain of money (like Muleshoes and Pensioner), it isn't worthwhile to sue Prosper, because it would cost too much in attorney's fees.  Additionally, the statute of limitations has probably run on all P1 claims by now.  For example, the SOL for breach of a written contract is 4 years from the breach in CA.  The SOL for fraud is 3 years from when the plaintiff should have been aware of the fraud. 

As always, this is not legal advice.  If you want legal advice, see (and pay) a lawyer. 

[mothandrust]

Hence the acronym.  If you haven't got your legal case against Prosper going by now, you're SOL.

But how, exactly would lenders be aware that we are defrauded?  Take Prosper's 100% ID theft guarantee. 

We wouldn't "know" unless we were able to examine Prosper's files, which could only happen if we filed a lawsuit and via discovery were able to pore through documents. 

We can intelligently guess that of thousands of loans issued and hundreds defaulted, that ZERO is not the right number of ID theft loans. 

But Prosper at this point would certainly "defend vigorously" and among other things, say that the SOL has passed, and lawyers on both sides bill hours on this side point.

[yankeefan]

I don't recall whether it was Prosper, or some of us posting on the original board, but early on there was discussion of whether these were securities, and there was a claim that they were exempt due to being personla loans or something like that.

[DCS]

I don't recall whether it was Prosper, or some of us posting on the original board, but early on there was discussion of whether these were securities, and there was a claim that they were exempt due to being personla loans or something like that.

Found this discussion on prosperreport.com:
http://www.prosperreport.com/archive/forums/1/9/1/19161.0.HTM

[rogerwaite]

The SOL for fraud is 3 years from when the plaintiff should have been aware of the fraud. 

As always, this is not legal advice.  If you want legal advice, see (and pay) a lawyer. 

I note that par. 123 says "The claims herein are based on strict liability and are not based in any way on fraud or fraudulent conduct."

So does this paragraph exclude fraud for purposes of the class action, but not wipe out any claim of fraud for some other action?

(As always, this is not a request for legal advice.  )