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[mothandrust]

Under Prosper's argument, Prosper could simply unilaterally modify the LRA to include the following provision: "Prosper may, at any time it so desires, take ownership of all of a Lender's notes and cash account balance, without compensation of any kind, solely in Prosper's discretion.  Moreover, Prosper may, solely in its own discretion, transfer as much money from a Lender's linked bank account to Prosper as Prosper desires, with no compensation to the Lender.  Furthermore, Lender agrees that Lender's first-born child is now the legal property of Prosper, and Lender shall immediately send such child to Prosper."

That was Prosper's argument on my complaint to the BBB; their claim is that there is a clause in every LRA that gives them carte blanche to change the terms to whatever the most recent LRA is that is posted on their website. 

The BBB procedure is that you make your case, Prosper responds, you rebut, and after about 3 rounds for each side BBB will render a decision, so anticipate their punches and you might fare better than I did.

Good luck!  And if anyone else is a lender on this loan (or mine), consider filing a BBB complaint yourself.

[NewHorizon]

So let's say best case: BBB renders a decision against Prosper.  Then what?

[ira01]

So let's say best case: BBB renders a decision against Prosper.  Then what?

That and $4 will get you a cup of coffee at Starbucks. 

Seriously, BBB is a joke.  They have no clout with the companies, and you can't trust their ratings anymore, because they are basically for sale.  Companies pay several hundred dollars for "BBB Accreditation," and suddenly complaints don't seem to affect their ratings anymore.  There are a bunch of articles about this.  For example:

The Better Business Bureau, one of the country's best known consumer watchdog groups, is being accused by business owners of running a "pay for play" scheme in which A plus ratings are awarded to those who pay membership fees, and F ratings used to punish those who don't.

To prove the point, a group of Los Angeles business owners paid $425 to the Better Business Bureau and were able to obtain an A minus grade for a non-existent company called Hamas, named after the Middle Eastern terror group.

"Right now, this rating system is really unworthy of consumer trust or confidence," said Connecticut attorney general Richard Blumenthal in an interview to be broadcast as part of an ABC News investigation airing tonight on 20/20.

In an official demand letter sent to the national headquarters of the Better Business Bureau Thursday, Blumenthal called on the BBB to stop using its grading system, which he said was "potentially harmful and misleading" to consumers.

"The BBB accreditation and the BBB ratings systems is not about generating money," said BBB national president and CEO Steve Cox. He said the A minus grade for Hamas was given in error. "Plain and simple, we made a mistake," Cox told ABC News.

Errors seem to abound at the Better Business Bureau. As reported by an anonymous blogger the BBB also awarded an A minus rating to a non-existent sushi restaurant in Santa Ana, California and an A plus to a skinhead, neo-Nazi web site called Stormfront.

Each listing cost $425.

"They ran the credit card and within 12 hours they were an approved, accredited member," said the anonymous blogger, who runs a site called bbbroundup.com.

"They're more interested in the money than their credibility," he said.

The BBB's Cox said the three listings were all mistakes made by sales people.

"That's an inaccurate statement that business people are able to buy A's," Cox said. "We have more than 500,000 non-accredited businesses who have A ratings," he added.

Yet, as part of the ABC News investigation, an ABC News producer with a camera was present as two small business owners in Los Angeles were told by Better Business Bureau tele-marketers that their grades of C could be raised to A plus if they paid $395 membership fees.

Terri Hartman, the manager of a Los Angeles antique fixtures store, Liz's Antique Hardware, was told only a payment could change her grade, based on one old complaint that had already been resolved.

"So, if I don't pay, even though the complaint has been resolved, I still have a C rating?"

Hartman then read off her credit card number and the next business day the C grade was replaced with an A plus, and the one complaint was wiped off the record.

In a second case, Carmen Tellez, the owner of a company that provides clowns for parties was also told she had to pay to fix her C- grade, based on a two-year old complaint that she says had already been resolved.

The C minus became an A plus the very next day after she provided her credit card number for the $395 charge.

"If I'm paying for a grade, then how are the customers supposed to really trust the Better Business Bureau?" she asked.

http://abcnews.go.com/Blotter/business-bureau-best-ratings-money-buy/story?id=12123843#.UM0LqoY2e1w

[JammingJAY]

So let's say best case: BBB renders a decision against Prosper.  Then what?

That and $4 will get you a cup of coffee at Starbucks. 

Seriously, BBB is a joke.  They have no clout with the companies, and you can't trust their ratings anymore, because they are basically for sale.  Companies pay several hundred dollars for "BBB Accreditation," and suddenly complaints don't seem to affect their ratings anymore.  There are a bunch of articles about this.  For example:

I haven't been around for awhile but it's good to see I can still agree with ira.

 

[James01]

So I'm researching my next steps now.  To file a small claims suit, it looks like I'd need to file in the County of San Francisco.  Of course, I'll call the Small Claims advisor in Orange County (where I live) and see if this is actually the case, first.  I signed the contract (LRA) while living in Los Angeles County.  I would prefer to have a local venue, but wouldn't too much mind driving up to the Bay Area for a day; it might make for a fun adventure.
Anyone here have experience filing a small claims suit against a company outside their local area?

Thanks,
James

[mothandrust]

So let's say best case: BBB renders a decision against Prosper.  Then what?

Prosper would then have to decide if having a good BBB rating, happy customers, and karmic peace are more valuable to them than continuing in their unethical ways.

But back up....if Prosper won't respond to your communications, the BBB complaint is a way of bringing them to the discussion table.

[NewHorizon]

Well maybe at least the BBB route would reveal any other rebuttals besides what you got in Email before going to court...?

IANAL, but fwiw, I'm recalling that small claims judgments can not be used as precedents in other cases - small claims or no.

[Beerbud1]

So I'm researching my next steps now.  To file a small claims suit, it looks like I'd need to file in the County of San Francisco.  Of course, I'll call the Small Claims advisor in Orange County (where I live) and see if this is actually the case, first.  I signed the contract (LRA) while living in Los Angeles County.  I would prefer to have a local venue, but wouldn't too much mind driving up to the Bay Area for a day; it might make for a fun adventure.
Anyone here have experience filing a small claims suit against a company outside their local area?

Thanks,
James

Have you signed the most Recent "LENDER REGISTRATION AGREEMENT?"

If so...........You can't sue them!

Please read the Lender Registration agreement you signed!

[ira01]

So I'm researching my next steps now.  To file a small claims suit, it looks like I'd need to file in the County of San Francisco.  Of course, I'll call the Small Claims advisor in Orange County (where I live) and see if this is actually the case, first.  I signed the contract (LRA) while living in Los Angeles County.  I would prefer to have a local venue, but wouldn't too much mind driving up to the Bay Area for a day; it might make for a fun adventure.
Anyone here have experience filing a small claims suit against a company outside their local area?

Thanks,
James

Have you signed the most Recent "LENDER REGISTRATION AGREEMENT?"

In my reply I pointed out that the only LRA which I signed is dated April 26, 2007. 

[Beerbud1]

So I'm researching my next steps now.  To file a small claims suit, it looks like I'd need to file in the County of San Francisco.  Of course, I'll call the Small Claims advisor in Orange County (where I live) and see if this is actually the case, first.  I signed the contract (LRA) while living in Los Angeles County.  I would prefer to have a local venue, but wouldn't too much mind driving up to the Bay Area for a day; it might make for a fun adventure.
Anyone here have experience filing a small claims suit against a company outside their local area?

Thanks,
James

Have you signed the most Recent "LENDER REGISTRATION AGREEMENT?"

In my reply I pointed out that the only LRA which I signed is dated April 26, 2007. 

Never Mind! 

[mothandrust]

Expect Prosper to argue that this section of the LRA...

16. Prosper's Right to Modify Terms. Prosper has the right to change any term or provision of this Agreement or the Prosper Terms and Conditions, provided, however, that Prosper does not have the right to change any term or provision of a Note you purchase from Prosper under this Agreement except as authorized in the Promissory Note. W e will give you notice, which may be in the form of a posting on the Prosper website, of material changes to this Agreement, or the Prosper Terms and Conditions.

...lets them unilaterally change the terms to whatever they want.

[ira01]

Expect Prosper to argue that this section of the LRA...

16. Prosper's Right to Modify Terms. Prosper has the right to change any term or provision of this Agreement or the Prosper Terms and Conditions, provided, however, that Prosper does not have the right to change any term or provision of a Note you purchase from Prosper under this Agreement except as authorized in the Promissory Note. W e will give you notice, which may be in the form of a posting on the Prosper website, of material changes to this Agreement, or the Prosper Terms and Conditions.

...lets them unilaterally change the terms to whatever they want.

Aside from the fact that this still doesn't give Prosper carte blanche to rewrite the legal agreement (otherwise we could all owe Prosper our first born child), even by its very terms it doesn't apply to this situation:  "Prosper does not have the right to change any term or provision of a Note you purchase from Prosper under this Agreement," means that forgiving principal (which is changing the Note provision specifying how much money the borrower must repay) is not permitted.

[NewHorizon]

Aside from the fact that this still doesn't give Prosper carte blanche to rewrite the legal agreement (otherwise we could all owe Prosper our first born child), even by its very terms it doesn't apply to this situation:  "Prosper does not have the right to change any term or provision of a Note you purchase from Prosper under this Agreement," means that forgiving principal (which is changing the Note provision specifying how much money the borrower must repay) is not permitted.

But Prosper may want to try to say that a given Note's terms and provisions can indeed change during the lifetime of the Note whenever the Prosper web site changes it.  (Defendants in court will try anything under the sun, imho.)

BTW, it occurs to me that since the Notes - even P1 Notes - are now deemed by the SEC to be Securities, it might be worth checking to see what Securities regulations say about "carte blanche" terms/provisions.  And/or maybe even see if the SEC could chime in on this issue before going to small claims?

[James01]

Prosper responded to the BBB, and said the following:

"We have received [   ]'s complaint and have investigated the issue. While we are sorry to hear that [   ] is dissatisfied with the recovery that was obtained on the loan in which he invested, we stand by the position taken by our Customer Service Manager. The terms of the Lender Registration Agreement that [   ] signed gave Prosper the right to amend it at any time in Prosper's sole discretion. Prosper amended the terms [   ] quoted in his complaint to allow Prosper to settle the loans which it services, including the loan in which [   ] invested. Prosper's settlement of such loan was therefore consistent with its obligations under the governing Lender Registration Agreement.
Thank you."

I rebutted with arguments presented in this thread.  We'll see how those go over.

[mothandrust]

The terms of the Lender Registration Agreement that [   ] signed gave Prosper the right to amend it at any time in Prosper's sole discretion. Prosper amended the terms [   ] quoted in his complaint to allow Prosper to settle the loans which it services, including the loan in which [   ] invested. Prosper's settlement of such loan was therefore consistent with its obligations under the governing Lender Registration Agreement.