Another fine mess Prosper seems to have gotten itself into. Can they do nothing right?
After all of this, you'd think they could at least get the refunds right.
Right?
Interest paid on all refunds
Also, because Prosper was clearly in error the application of all of the above payments in question, and our error involves a time delay between when Prosper should have made payments to lenders, Prosper will pay interest at California’s legal rate of 7% on all amounts due to the affected lenders or GLs, from the date the payment should have been made. Interest will be paid in all 3 situations mentioned above.
As noted above, I received 8 refunds of improperly withheld GL rewards on February 28 and two more on March 5.
Now that I've finally had a chance to take a close look at the refunds, it doesn't appear that Prosper paid interest as promised.
The review was complicated by the fact that the last monthly GL statement I received from Prosper was the one for June 2007. Only one of the loans in my group was over three months old at that point, so I couldn't rely on the statement to determine the amount of accrued GL rewards which had been withheld for the others.
So I went to each borrower's payment history (I was a lender on all of my group's loans), totalled the GL fees collected from my share of each payment made during the first three months of the loan, multiplied by the amount of the loan, and divided by the amount of my bid. I then compared the result (which would be the total amount of GL fees collected by the borrower during the first three months) to the amount of the refund. (This method only works for borrowers who made their third payment precisely on time. Because the amount withheld was based on GL fees
accrued during the first three months, not the GL fees actually collected, this method wouldn't work for borrowers who made the third payment early or late.)
For loans where this method didn't work, I totalled all of the GL fees collected from each payment made during the life of the loan (except pending payments), multiplied by the amount of the loan, and divided by the amount of my bid. I compared this result (the total amount of GL fees collected during the life of the loan) to the total amount of GL fees paid to me over the duration of the loan (including the refund).
For each loan, the amount of GL fees collected from the borrower matches the amount paid to me. That would mean that Prosper refunded the amount that was improperly withheld, but didn't pay interest, unless they hid it somewhere else in my account. (I've looked, and I didn't find it.)
Could the other GLs who received refunds check their accounts and see if the same is true for them?