Print

[xraider]

Gog, why shouldn't id theft claims be enforced against a spouse or, as is more usual, a former spouse?  They're accepted between parent and child, between those in a relationship etc etc.

The easy answer, to me, is require Prosper to enforce its guarantee then seek repayment from BOTH spouses, to the extent that what the law is.  We lenders lend based solely on the data of the ID theft victim, and sometimes based on a description.  Prosper then takes whatever steps IT takes to verify the identity of the borrower.  If that effort fails, why should lenders be stuck with the consequences?  Since Prosper determines what is enough to protect our money, when it is wrong, it should honor its guarantee.

The flip side, of course, is that the guarantee is unconditional.  Prosper easily could have said that it would honor ID theft guarantees only upon prosecution, or civil judgment, or whatever other conditions it wanted to impose.  Right now, that guarantee SHOULD be worded as something Prosper honors only if lenders discovery ID theft and make a big enough stink about it that someone at Prosper deems it prudent to repurchase.

[Nora_Lenderbee]

I think there are two separate issues here which are being confused.

1. Was the loan obtained through ID theft?
2. Prosper's claim that it never made the loan, but that we individual bidders made the loan.

Issue #1 is not one we here on .org can determine. The gaerkes were married and the money went into a joint account. I would say it is at least not *obvious* that it was ID theft, though it certainly *could* have been.

Issue #2 is the one that could make trouble for us bidders ("lenders"). Prosper's LRA said that Prosper was the lender, and we bidders purchased pieces of the loan from Prosper. Prosper's statement in the lawsuit says the total opposite of that. First--both statements can't be true. Second--if we bidders are truly the ones who made the loan, we could all be on the hook for being unlicensed lenders, and Gaerke could come after us, and so on.

Issue #2 is what i care about.

Should the money be repaid? Of course! That is not in question.
Should prosper repurrchase thew loan? Only if it was truly ID theft, which we don't know for sure right now.

Prosper would be justified to argue that it wasn't really ID theft. But they didn't. Instead, they argue that they never made the loan in the first place. That is bizarre.

[Gogmagog]

Gog, why shouldn't id theft claims be enforced against a spouse or, as is more usual, a former spouse?  They're accepted between parent and child, between those in a relationship etc etc.

I was commenting on the likelihood of obtaining solid and actionable proof, not about the moral justification for enforcement.  Spouses, depending on the state, are a single financial entity.  No matter which puts their name on the document.  Parents and children are not the same financial entity.  Neither are people in a relationship.  The only judge that would care about WHICH spouse put their name on WHICH document, would be the divorce court judge. 

The easy answer, to me, is require Prosper to enforce its guarantee then seek repayment from BOTH spouses, to the extent that what the law is.

If Prosper pays out to the Lenders, then they are admitting to the ID Theft.  If Prosper is asserting that there is no ID theft, then they want the debt to be declared legit. If they want their money back, then declaring that there WAS ID theft, hurts their case.  If it IS a case of ID theft, then they will recover $0.  If Prosper has a reason to suspect that it isn't ID theft, then paying out hurts them.

We lenders lend based solely on the data of the ID theft victim, and sometimes based on a description.  Prosper then takes whatever steps IT takes to verify the identity of the borrower.  If that effort fails, why should lenders be stuck with the consequences?  Since Prosper determines what is enough to protect our money, when it is wrong, it should honor its guarantee.

The Lender is always stuck with the consequences in the end.  Lending is about managing risks, including the unknown.  Raise your bid rates if you aren't making enough money to compensate.  If you have, and still don't make enough money, then don't lend.  Credit Card companies are stuck with the problem too.  They sometimes have to choose between chasing the perps, and just eating the loss.  You, of course, can simply demand that Prosper takes care of it. 

The flip side, of course, is that the guarantee is unconditional.  Prosper easily could have said that it would honor ID theft guarantees only upon prosecution, or civil judgment, or whatever other conditions it wanted to impose.  Right now, that guarantee SHOULD be worded as something Prosper honors only if lenders discovery ID theft and make a big enough stink about it that someone at Prosper deems it prudent to repurchase.

You guys make a big stink about everything.  How can Prosper tell the difference? 

[bamalucky]

I pick,don't lend.

Prosper past performance can be relied on to determine future results IMO

[Mtnchick]

You guys make a big stink about everything.  How can Prosper tell the difference? 

 

P----r scews UP everything, lol. If there wasn't anything to make a big stink about, I don't think we'd create them. I've done business with 100's of companies over the years and so far, P----r has beat every single one of them in complete ineptitude. I realize you're an Apple guy, but I've owned at least 10 Dells. They run great. I don't spend one second of time making a stink about them. And I've put more money into them than P----r so it's not the money issue. And that's just one example

Hint: If they were running the company right, we wouldn't have anything to complain about. As it is, they seem to find a way to screw up everything. And to add insult to injury, they're doing it with people who actually know how companies SHOULD run.

[xraider]

Gog, there is no interest rate a borrower could offer me at this point that would mitigate against the risks created by Prosper.  I stopped lending almost a year ago.

I do appreciate you continuing to make your payments, though.

I always understood the risks in lending, but I also thought (until I stopped lending) that Prosper was a collaberation between all concerned.  I stopped lending when it became apparent to me that was no longer the case.

You didn't answer my main questions, though.  (1)  If we make a loan based on one spouse's credit  history, and the loan is really sought by the other, and Prosper doesn't verify, who should bear the risk?  (2)  Why should Prosper add unwritten requirements to the ID theft guarantee, EVER?  (3)  Does it concern you, as a lender, that Prosper lied to the court?

[Mark12547]

Mtnchick, actually, if they were running the company correctly, there would likely be a few complaints, but usually it would be the type of things we would recognize as lending companies typically get (e.g., "I changed banks, forgot to tell Prosper, and they still charged me a late fee when I got it straightened out!").

But it wouldn't be complaints about gross incompetence, being banned for trivial things, changing their agreements without notice, them violating their agreements just for the sake of convenience, false and misleading advertisements, lack of transparency in collections while claiming to be transparent for lenders, or alienating the segment of the customers who bring money to the table.

[ira01]

Gog, why shouldn't id theft claims be enforced against a spouse or, as is more usual, a former spouse?  They're accepted between parent and child, between those in a relationship etc etc.

I was commenting on the likelihood of obtaining solid and actionable proof, not about the moral justification for enforcement.  Spouses, depending on the state, are a single financial entity.  No matter which puts their name on the document.  Parents and children are not the same financial entity.  Neither are people in a relationship.  The only judge that would care about WHICH spouse put their name on WHICH document, would be the divorce court judge. 

This is completely false.  A person has no right to impersonate their spouse in order to deceive third parties, and if they do so, the spouse is not responsible.  Prosper has chosen to not offer joint loans by spouses (despite many lender requests that it do so).  Instead, Prosper only offers INDIVIDUAL loans for which ONE person is responsible, and based on that ONE person's income and credit history.  That is what lenders use in deciding whether to bid.  Just like one spouse with good credit can't put the listing in their name but claim his/her spouse's income (which, actually would make much more sense, especially in community property states like California where employment income belongs to the "community" regardless of who makes it), one person certainly cannot legally impersonate the other spouse and post a listing in that person's name.  That is loan fraud. 

And more to the point, Prosper specifically offers a "100% ID-theft guarantee."  Prosper doesn't do that out of altruism, or as a gift to lenders -- it does so for its own self-interest, in order to dispel the common (and perfectly reasonable) fears of new lenders about the problem of ID-theft when loaning to strangers on the internet.  Unfortunately for those new lenders, Prosper doesn't tell them that its so-called "100% ID-theft" guarantee has been reduced to an essentially illusory promise (or do you really believe that only ONE loan originated in the last year has been an ID-theft loan?).

[Gogmagog]

You didn't answer my main questions, though.  (1)  If we make a loan based on one spouse's credit  history, and the loan is really sought by the other, and Prosper doesn't verify, who should bear the risk? 

The Lender should ultimately bear all risk.  I can't think of too many methods of verification, within the cost parameters of small-scale Internet lending, that can verify the difference between spouses in an Internet financial transaction.  Prosper only came down on the side of "One Loan Per Person" because of Borrower and Lender confusion as to the income/budget numbers they were supposed to use.  I don't condone the Borrower doing an end run around Prosper's one loan per person, but I also can't see a whole lot that Prosper could ever do to prevent it. 

(2)  Why should Prosper add unwritten requirements to the ID theft guarantee, EVER? 

Because only a monkey(And I don't mean a LoanChimp) would allow the ID Theft guarantee to threaten a legal case where Prosper has the potential ability to get the payments back.  It is Prosper's discretion on when to trigger the guarantee.  If you ever thought otherwise, you were mistaken.

(3)  Does it concern you, as a lender, that Prosper lied to the court?

If they are actually lying for the purpose of getting all the Lender's sued, then yes. 
If they are actually lying for the purpose of screwing Lenders and the Plaintiff out of a legit ID Theft claim, then yes. 
If they are splitting legal hairs so as to make it harder for the Plaintiff to get out of paying for a debt that he was aware of, then no.

[phreddy148]

You didn't answer my main questions, though.  (1)  If we make a loan based on one spouse's credit  history, and the loan is really sought by the other, and Prosper doesn't verify, who should bear the risk? 

The Lender should ultimately bear all risk.  I can't think of too many methods of verification, within the cost parameters of small-scale Internet lending, that can verify the difference between spouses in an Internet financial transaction.  Prosper only came down on the side of "One Loan Per Person" because of Borrower and Lender confusion as to the income/budget numbers they were supposed to use.  I don't condone the Borrower doing an end run around Prosper's one loan per person, but I also can't see a whole lot that Prosper could ever do to prevent it. 

Seems to me that a phone call to the home would do it.  Ask to speak to the husband if he is asking for the loan and make sure that you talk to a man.  If the wife is asking for the loan, expect to speak to a woman.

[GLeaderAccountantsChoice]

You didn't answer my main questions, though.  (1)  If we make a loan based on one spouse's credit  history, and the loan is really sought by the other, and Prosper doesn't verify, who should bear the risk? 

The Lender should ultimately bear all risk.  I can't think of too many methods of verification, within the cost parameters of small-scale Internet lending, that can verify the difference between spouses in an Internet financial transaction.  Prosper only came down on the side of "One Loan Per Person" because of Borrower and Lender confusion as to the income/budget numbers they were supposed to use.  I don't condone the Borrower doing an end run around Prosper's one loan per person, but I also can't see a whole lot that Prosper could ever do to prevent it. 

Seems to me that a phone call to the home would do it.  Ask to speak to the husband if he is asking for the loan and make sure that you talk to a man.  If the wife is asking for the loan, expect to speak to a woman.

Stop being practical phreddy.  Geez.   

[Xenon481]

Seems to me that a phone call to the home would do it.  Ask to speak to the husband if he is asking for the loan and make sure that you talk to a man.  If the wife is asking for the loan, expect to speak to a woman.

She'll just put her boyfriend on the phone.

[xraider]

Gog, we disagree.  Prosper didn't say it will honor the identity theft guarantee only when caught.  To me the "guarantee" is akin to strict liability.

As I've said before, Prosper could have imposed parameters on when it would honor the guarantee, but didn't.  It still can on a going forward basis.  On this one, though, Prosper should repurchase if the wife procured the loan.  And, yes, with or without the husband's knowledge.  People loaned to the husband, and if Prosper didn't ensure that happened, Prosper needs to honor the guarantee.

[ira01]

I can't think of too many methods of verification, within the cost parameters of small-scale Internet lending, that can verify the difference between spouses in an Internet financial transaction. . . .  I don't condone the Borrower doing an end run around Prosper's one loan per person, but I also can't see a whole lot that Prosper could ever do to prevent it. 

Then you haven't been paying attention here.  The answer is simple -- require borrowers to print out a form (like they already do to fax documents to Prosper) and get it notarized and send it in.  Many people have access to free notaries through their bank, employer, or elsewhere, and for anyone else, it costs about $10.  

[Gogmagog]

This is completely false.  A person has no right to impersonate their spouse in order to deceive third parties, and if they do so, the spouse is not responsible. 

If the wife applied for the loan, without the husband's knowledge, then this is true.  However, if the wife applied for the loan without the husband's knowledge, but then he found out and took no steps to correct the problem(and even allowed payments to be made), then he would be liable for the debt.  I don't know if this happened in this case or not, but it appears to be what Prosper and the wife are asserting.

Prosper has chosen to not offer joint loans by spouses (despite many lender requests that it do so).  Instead, Prosper only offers INDIVIDUAL loans for which ONE person is responsible, and based on that ONE person's income and credit history.  That is what lenders use in deciding whether to bid.  Just like one spouse with good credit can't put the listing in their name but claim his/her spouse's income (which, actually would make much more sense, especially in community property states like California where employment income belongs to the "community" regardless of who makes it), one person certainly cannot legally impersonate the other spouse and post a listing in that person's name.  That is loan fraud. 

I have no argument here.  However, the husband can still be liable for the loan if he knew this was occurring and did nothing to prevent or report it.  I don't know.  When did the husband actually say he became aware of the loan?  The loan was distributed to a jointly held account, and payments were made from that account. (the complaint isn't clear if this joint account was one of the fraudulent ones the Husband asserted in the first part of his claim)

And more to the point, Prosper specifically offers a "100% ID-theft guarantee."  Prosper doesn't do that out of altruism, or as a gift to lenders -- it does so for its own self-interest, in order to dispel the common (and perfectly reasonable) fears of new lenders about the problem of ID-theft when loaning to strangers on the internet.  Unfortunately for those new lenders, Prosper doesn't tell them that its so-called "100% ID-theft" guarantee has been reduced to an essentially illusory promise (or do you really believe that only ONE loan originated in the last year has been an ID-theft loan?).

I can only assume that Prosper doesn't think it is ID theft, and/or that Prosper doesn't want to prejudice the case by paying out an ID theft claim to the Lenders.  Since Prosper is in the middle of a lawsuit, I don't expect them to do ANYTHING related to changing the state of the loan until the lawsuit is concluded.