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[DoItRight]

I'm new to prosper. I sign up for a premier account, transfer my money in, and ask for my money to be allocated as follows:
100% 5 year term
AA- 15%
A- 20%
B- 20%
C- 20%
D- 15%
E- 5%
HR- 5%

I come back a few days later to look at my account and what do I see? About 50% of the bids placed for 3yr HR notes (totaling about 10% of the cash value in my account). WTF?

So I call up my advisor at prosper (can't remember if they call him an "advisor", but each Premier customer has go-to man assigned to the account) and say, "I asked for my cash to be invested only in notes with 5 year terms, so please stop buying HR notes and I'm going to buy some notes for myself just to help tweak the allocation." The advisor literally spends the next 45 minutes bragging about how he manages a $500k account for another Premier customer and arguing with me about how I shouldn't sign up for premier service if I'm not going to let their "analysts" do their job?  

If their "analysts" did their job correctly then I wouldn't have to look over their shoulders...now I see they're loading me up on D rated notes while I still have only a tiny sliver of B rated notes (been watching B rated notes being bought by other investors while going unpurchased by my "premier analyst"). I also noticed that the "Automated Quick Invest" feature doesn't seem to actually buy notes that fit the screen (lots of notes show up with the search, yet the AQI doesn't buy them).

I have $30k invested with an average APY of 20% which I feel should be adequate compensation to cover the risk of defaults...but I'm starting to get afraid because if Prosper is as incompetent as they appear then perhaps the borrowers are simply robbing them (or actually me) blind?

[112233]

Good thread for the lobby.

[ira01]

if Prosper is as incompetent as they appear then perhaps the borrowers are simply robbing them (or actually me) blind?

Welcome to Prosper.  

Prosper really IS as incompetent as it appears (if not more so).  Spend some time reading here for copious examples of Prosper incompetence.  Most are fairly old, as most people here gave up on Prosper long ago, but there are plenty of indications (including yours) that Prosper hasn't gotten more competent with age.  Even worse, Prosper has repeatedly proved itself unwilling to be bound by its legal agreements, so no matter what it promises, it does what it wants. 

[Urbi_et_Orbi]

I am not sure I totally follow the indignation of the OP.  If the portfolio, over time, adheres to his/her allocation guidelines, then isn't that the key here?  Whether or not early BIDS are deployed with a slightly different bent, isn't that to be expected until loans close and fund - and then the account balances into the allocation guidelines over time?

[ira01]

I am not sure I totally follow the indignation of the OP.  If the portfolio, over time, adheres to his/her allocation guidelines, then isn't that the key here?  Whether or not early BIDS are deployed with a slightly different bent, isn't that to be expected until loans close and fund - and then the account balances into the allocation guidelines over time?

He chose 100% 5-year loans -- so how is his account going to "balance[] into the allocation guidelines over time" if it is bidding on ANY 3-year loans?

[DoItRight]

I am not sure I totally follow the indignation of the OP.  If the portfolio, over time, adheres to his/her allocation guidelines, then isn't that the key here?  Whether or not early BIDS are deployed with a slightly different bent, isn't that to be expected until loans close and fund - and then the account balances into the allocation guidelines over time?

This is a good point and perhaps I'm being too picky, but the things that I didn't like were that:
1. The portfolio was not going to adhere to my allocation guidelines over time because I specified that 100% should be invested into notes with 5 year terms while the initial deployment was almost entirely into notes with 3 year terms. I didn't know that HR notes weren't issued with 5 year terms...that's kinda why I signed up for Premier. They also haven't been purchasing B rated notes even though there have been plenty on the platform and, as the weeks roll by, they don't seem to be making any attempt to increase this allocation.
2. Once I was forced to take the time to learn more about how Prosper worked, my Premier advisor was really adamant about me NOT using that knowledge to tweak my portfolio. It appears the "premier analyst" uses an API to only buy notes that have reached "Verification Stage" 2-3 and it seems like they neglect to purchase the popular notes that have a high funding percentage...does this mean they are pawning off the unpopular notes onto me?
3. Now that I've been watching more closely all their automated investment options just seem really buggy or have additional hidden screens (for example, searches automatically filter out notes you've already purchased even if you don't make that part of the screen)...I'm simply trying to get a piece of every loan that Prosper finances, but why does it seem like that's impossible without placing manual bids?

I wouldn't say I'm full of indignation, but I was hoping to get your opinions on whether or not I should be because so far things haven't gone as I was expecting them to go and I'm wondering if I've been set up for more disappointment. Considering the risks involved I would remain gratified if I at least broke even (after defaults), but I don't want to be a stooge that's guaranteed to absorb only bad notes.  

[moneybaron]

Prosper treats objects like women, man!

[Xenon481]

I wouldn't expect anything better out of Prosper. They have proven time and time again that they are incompetent in many areas of their business.

They are a financial company that has problems keeping track of the finances under their control.

[artjunkie]

I'd think it might be an SEC violation for them to promise a certain allocation (5 year notes) but instead stuff 3 year notes into the portfolio.

Don't expect Prosper to uphold its own end of just about any agreement... and if you complain too loudly, don't expect the terms to remain the same as when you signed whatever paperwork you had in front of you. Prosper simply does what they please, and damn any agreements that are in place.

2nd for lobby, this is typical treatment Prosper still dishes out to "investors."

[Staneslav]

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[TJGbank]

Good thread for the lobby.

...second for lobby

[Urbi_et_Orbi]

Ok - I missed the part about 3 year vs 5 year loans.  Yeah, you have a legitimate gripe.  Welcome to the club.

+1 for lobby.

[DoItRight]

Well it does say on the Premier form that "Actual allocation may vary from target", but I took that to mean there could be a delay in implementing the exact allocation and small variations due to illiquidity:
http://www.prosper.com/prm/pdf/Prosper_Premier_Order_Form_Current_Investor.pdf

[Xenon481]

Well it does say on the Premier form that "Actual allocation may vary from target", but I took that to mean there could be a delay in implementing the exact allocation and small variations due to illiquidity:
http://www.prosper.com/prm/pdf/Prosper_Premier_Order_Form_Current_Investor.pdf

Yeah, illiquidity really is the only valid reason for variance from the allocation target, but Prosper has a history of not using valid reasoning.

One time, they filed a statement with a federal bankruptcy court saying that Prosper doesn't actually originate any loans at all, but that they are just a matching service for us lenders to find borrowers to whom we would directly loan money. Prosper has never operated in such a manner per their legal agreements with the lenders, but even though they were notified of their errant filing many times, they refused to fix their filing for months and months until finally it got so bad that the Motley Fool wrote a damning article about it.

[xraider]

A lot of us here stopped lending because Prosper doesn't take its own guidelines or terms of service seriously.

If you care enough, I would call your "advisor" and demand that Prosper reallocate your money as you instructed, or demand a refund.  I don't know if there's any difference in the risk, but the whole point of your instructions is that they be followed. 

Good luck.... and sorry to see that Prosper hasn't changed.