As an aside, I wonder whether Prosper's agreement with Penncro entitles Prosper to make this change. If not, Penncro may well sue Prosper.
The agreement is here:
http://www.sec.gov/Archives/edgar/data/1416265/000110465907078072/a07-27421_1ex10d4.htm
Thanks Traveler. Interesting stuff:
2.6 Collector shall not contact or communicate with any third party investor, owner or purported owner of an Account. All communications of any kind with the owner of an Account shall be by and through Company. If Collector is contacted by a third party investor, owner or purported owner of an Account, Collector shall immediately notify Company of such contact.
So the Penncro/Prosper original contract (9/2005) contained the xraider clause -- very interesting.
2.14 Collector may accept payments from borrowers in multiple formats, including cash, check, wire, ACH, debit card and credit card. Collector shall transfer payments received by Account obligors to Company’s designated account immediately upon receipt and clearance from borrower, on a daily basis, and in ACH or wire format. Collector shall bear the cost of electronic transmission of funds.
So if the suspicions that Penncro is holding back borrower payments are correct, Penncro is breaching its contract with Prosper.
Appendix B
Technology Requirements
• Technology requirements may be modified by the mutual written consent of the Parties.
• Data transmissions to and from P2P Credit will occur via a secure FTP server on a daily batch basis using a P2P Credit approved format.
• “Diff” files on P2P Credit account information to be transmitted from Collector to P2P Credit daily. Complete P2P account information to be transmitted on a weekly basis.
• Borrower account information to be maintained will include, among other items, number and mode of contact attempts, successful contacts and content of interaction, and repayment information.
So as I've previously speculated, Penncro provides Prosper electronic data daily detailing all its collections activities. So why hasn't Prosper made that information available to us? It would be easy for Prosper to make that information visible to the lenders on a loan in collections.
ADDENDUM NUMBER ONE TO COLLECTION SERVICE AGREEMENT
Prosper pays Penncro $.20 per account to make telephone calls on Prosper's behalf to borrowers who are 1-30 days late. I didn't see a date on the addendum, so I wonder when this started? Perhaps when Prosper brought CS in house from overseas. And how does Penncro make any money at this price? If it made 1 call attempt per minute, it would be paid $12 per hour. Sure, a lot of calls may result in the borrower not being home and a quick message being left, but some calls must take several minutes (especially if a payment is made).