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[xraider]

As Ira says, the lenders who are stuck on this one relied on the HUSBAND'S credit.  We don't know the WIFE'S credit. 

Remember, Prosper doesn't allow the borrower to include the spouse's income......  The loan was to the husband.  Since the husband didn't take it out, it's identity theft.

Anyone here ever apply for credit in the name of your spouse or a child, without their knowledge and approval (or with)?

[cowdog]

What would a bank do for example if I called them up and told them a loan was taken out in my name fraudulently? Certainly they arent going to wait around for a court to decide the matter, no?

If it went into a joint account then both account holders are both individually and separately liable for it, and the issue of fraud is another matter which would need to be proven separately.

This isn't true.  Under Federal law, spouses have the right to obtain credit individually in their own name, and the fact that the proceeds were deposited into a joint account does not make the other spouse liable on the debt.  If the husband's allegations in this case are true, he is absolutely not liable for the debt, which is why he is suing all of the creditors for a declaratory judgment that he is not liable and that the creditors cannot report the debt as his to the CRA's.  And if those allegations are true, then this loan was procured through ID-theft, making Prosper liable to all the lenders to repurchase the loan for the full principal amount pursuant to the LRA.

In other words, he is liable for it.

He now has to sue and convince a court that it was ID theft.

[onthefence]

http://www.userinstinct.net/address-21712-54.htm
http://www.reunion.com/ashley-gaerke-VAN-WERT-OH-.FLOWTOCADIPP.-1815937043

[ira01]

What would a bank do for example if I called them up and told them a loan was taken out in my name fraudulently? Certainly they arent going to wait around for a court to decide the matter, no?

If it went into a joint account then both account holders are both individually and separately liable for it, and the issue of fraud is another matter which would need to be proven separately.

This isn't true.  Under Federal law, spouses have the right to obtain credit individually in their own name, and the fact that the proceeds were deposited into a joint account does not make the other spouse liable on the debt.  If the husband's allegations in this case are true, he is absolutely not liable for the debt, which is why he is suing all of the creditors for a declaratory judgment that he is not liable and that the creditors cannot report the debt as his to the CRA's.  And if those allegations are true, then this loan was procured through ID-theft, making Prosper liable to all the lenders to repurchase the loan for the full principal amount pursuant to the LRA.

In other words, he is liable for it.

Are you intentionally being dense for a reason?  How can you construe anything I said as standing for the proposition that "he is liable for it"?  He is NOT liable for it if he wasn't the one who opened the Prosper account and electronically signed the borrower registration agreement.  If this loan were a NAT loan, for instance (instead of being in BK), the burden of proof would be on PROSPER to prove, by a preponderance of the evidence, that this man was the Prosper borrower known as _____.  Prosper could introduce as evidence the fact that the money went into a joint checking account, and this man would tell his story.  At the end of the day, unless Prosper could prove that he was the actual borrower (and not his wife), Prosper would lose.[/quote]  Indeed, I believe that many states have laws that if someone files a police report alleging identity theft, the burden is automatically on the creditors and the CRA's to show that a particular debt wasn't the result of ID-theft.

[onthefence]

So I suspect that prosper's new 'electronic' signature procedure would not help them out of this mess either.

[xraider]

The electronic signature is the dumbest thing in the world for fraud prevention. If someone doesn't care if they are otherwise applying for credit (or insurance, or anything else) in someone else's name, what's going to stop them from typing that other person's name?  A wet, notarized signature would be the only thing that makes sense from a fraud prevention standpoint.  Charge the borrower an extra $25 or $50 to get the loan documents notarized.

Otherwise, actually honor your identity theft guarantee.

[Xenon481]

The electronic signature is likely because somebody (under the old system) could have complained that they didn't get a chance to turn down the interest rate being offered, Prosper just stuck them with the loan.

[cowdog]

Ok, so as it stands now he is liable. Once he gets a judge to agree that he isn't liable, then he wont be.

[Teddie33]

Ok, so as it stands now he is liable. Once he gets a judge to agree that he isn't liable, then he wont be.

+1

[xraider]

Anyone here ever hear that Prosper has required anyone to obtain a judgment or court order before it would honor its identity theft guarantee?  I can't get the TOS on my Treo, but I can't imagine the TOS requires a judgment.

It's not commercially reasonable to require someone to go to court and obtain a court order establishing that a debt isn't his or hers.  The attorneys' fees relating to that undertaking would likely be several thousand dollars or more.   If Prosper won't honor an affidavit of a "borrower" followed, of course, by an investigation, the ID theft guarantee is worthless.  Prosper should immediately notify its borrowers of this.

[Teddie33]

Anyone here ever hear that Prosper has required anyone to obtain a judgment or court order before it would honor its identity theft guarantee?  I can't get the TOS on my Treo, but I can't imagine the TOS requires a judgment.

It's not commercially reasonable to require someone to go to court and obtain a court order establishing that a debt isn't his or hers.  The attorneys' fees relating to that undertaking would likely be several thousand dollars or more.   If Prosper won't honor an affidavit of a "borrower" followed, of course, by an investigation, the ID theft guarantee is worthless.  Prosper should immediately notify its borrowers of this.

So you are suggesting just to write the money off before the legal matter is completed?

[xraider]

Teddie, that's a very interesting question in THIS circumstance.

Keep in mind that we have a man in bankruptcy (OK, chapter 13) who really isn't looking at paying a whole lot on his debt.  He is certainly looking at paying his lawyer a lot for the adversarial complaint. 

We have the husband alleging that Prosper did not contact him to verify that he sought the loan.

We have 2 companies who have determined that the husband did not take out the debt.

We have no information from Prosper on there being suspected identity theft here.

I'd say, given the totality of the circumstances, that Prosper just doesn't want to honor its guarantee.  In this instance, where we are aware of the claimed id theft, we can monitor the bankruptcy case and make sure that if (when) the husband is exonerated of the debt, Prosper makes good on its guarantee.

In the meantime, I take some solace in the fact that with 3!!! law firms representing it, Prosper is likely to pay a LOT of money to lawyers in addition to having to honor the id theft guarantee ultimately.

Let me ask you, though, Teddie:  If Prosper learns that a "borrower" claims identity theft, what do you think Prosper should do about it?  Should Prosper require the "borrower" to obtain a court order that it's not his debt?  If that hasn't happened on the other (small) number of repurchased loans, why here?

[Teddie33]

From what little you have allowed us to see points to a man trying to get his name removed from credit card accounts that will be sticking his wife with them.

I would think each prosper fraud issue would be a case by case issue and not 1 set rule.

[yankeefan]

This case seems to differ from many in that there is no contention that the loan proceeds were deposited in an account that was, indeed his (along with her).   He is claiming, and can presumably demonstrate, that he did not benefit from, and had no knowledge of, the money.  In most cases I would expect there would be an easy demonstration that the account did not belong to the ID theft victim in the first place.  The situation would seem to ask for more proof than your garden variety fraud.

[xraider]

From what little you have allowed us to see points to a man trying to get his name removed from credit card accounts that will be sticking his wife with them.

I would think each prosper fraud issue would be a case by case issue and not 1 set rule.

Teddie, from what little I've allowed you to see??  Wow.  This is all public record.  Go read it for yourself.  And stop with the insinuations.  It's beneath all of us here.