We believe the prudent course of business is to not sell at this time. Instead, we are going to consider the loans as charged off, and keep them and continue to try to collect them as charged off debts. You will continue to own the loans as we apply post charge off collection techniques to these accounts.
HAHA! Prosper r0x0rz!!!
So these "charge offs" won't be reported in the default category... and by creating an entirely new category, they won't even effect the stats for lates!
Bet when they tally their stats, they subtract this category first, effectively hiding even more bad loans in the stats. A "charge off," which is basically the same as a "charge back," at least for most accounting purposes, comes off the gross first and then of course isn't counted with returns, disputes, etc.
Moral: Don't make a deal with the devil and not expect to dance.