What amazes me is that they actually credited Trav for bringing this issue to their attention:
We want to thank and acknowledge Traveler505 for bringing these errors to our attention. This is an example of how the Prosper community helps us improve the site and our operations on an ongoing basis.
What? No link to my blog?
:'(
To its credit, Prosper has now publicly acknowledged these errors, and its promise to correct them goes beyond the minimum which was required. Not only is it paying interest (at a rate higher than the actual - as opposed to advertised - median ROI for Prosper lenders), but it is also eating, rather than reversing, disbursements which it had previously made in error. (Allowing GLs to keep the fees they erroneously received on late payments, while paying the same fees to lenders on the loans as it should have done, will probably cost Prosper at least $10,000.)
On the other hand, I remain unconvinced that it really takes two months or more for Prosper to write the code required to generate the refunds. (Of course, IANAProgrammer.) And I hope that, somewhere in all of this, Prosper has awakened to the need to establish tighter controls within its operation. Someone on Prosper's payroll should be responsible for regularly reviewing Prosper's operations (as well as planned FuOperations) to ensure that they conform to the legal agreements (and vice versa); that really shouldn't be my job.
It would be nice to think that today's blog announcement means Prosper has decided to stop waging war on the lending community (or at least realized that its attempts to suppress public criticism have been futile), but the suspension of Epictetus earlier this morning sends the opposite message. And there is still the little matter of Prosper's rejection of my offer to purchase a defaulted loan (MNH #4), which resulted in a loss of about $500 spread among 34 lenders.
As I mentioned in the introduction to MNH #1, there was a time - before Prosper began its attacks on the community - when I gave Prosper the courtesy of a "heads up" before publicly posting about major issues like these, and allowed Prosper a couple weeks to preempt me by announcing that the problem would be fixed. In spite of today's mixed messages, one could argue that this would be a good time to pause the posting of major MNH Reports and see if Prosper is willing to work with the community in a less adversarial manner. (I do have a few updates to post on my blog and some loose ends to tie up on the existing MNH Reports; I would still proceed with those as I find the time.)
Along those lines, one might consider LoanChimp's Warm & Fuzzy criticism of my approach (
http://warmnfuzzyprosperblog.blogspot.com/2007/12/response-to-travs-mnh-report-1.html), as well as the recent poll in the Verified Lenders section which showed only plurality (40%) support for a class action lawsuit against Prosper (30% opposed, with plenty of maybes and WGAFs).
What do you think? Should I pause the reports (or resume giving Prosper a "heads-up"), or should I continue posting MNH Reports as I have been doing? Would you want to see an additional show of good faith on Prosper's part before I change course? If so, what?
