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[Fred93]

A number of people have asked what the heck the undefined "post charge off collection techniques" (PCOCT) that Prosper is applying to the "charged off" loans (loans over 4 months late) really are.  Some folks wonder if PCOCT means "let sit on shelf".  Although its been repeatedly asked, Prosper hasn't told us what they're doing with our loans.

Instead of asking over and over, and getting no response, and presuming that the repeated question with no answer will shame them into some different behavior, I have a different idea.

Why don't we discuss and decide what PCOCT should mean.  Then we can tell Prosper what we think PCOCT means, and can look for evidence or lack of evidence of these specific actions, etc.

I think PCOCT should start by

1. calling the whole loan, that is declaring that the amount delinquent is the entire balance of the loan plus back interest rather than the few payments that are overdue. 

2. Reporting this new larger amount delinquent to the 3 credit reporting agencies.

3. ?

[ira01]

3.  Calling each and every one as often as reasonably possible (a few times a week).  Squeaky wheel gets the grease and all that. 

4.  Offering to charge as much as possible to a credit card (let the card issuer get stuck with the default/BK).

5.  For any loan that has indicia of fraud (especially zero to two payments), sue for fraud and seek punitive damages (the nice thing here is that a fraud judgment is generally NOT dischargeable in BK).

6.  Run asset checks on every borrower, and try to find the ones that have equity in a house, equity in a car, or other assets, and file suit.  Most borrowers will probably default, and once Prosper gets a default judgment, it can garnish wages, record liens on real property, and seize personal property. 

[login]

prosper is doing nothing with it so let just sell them off to a debt buyer and move on. i think this is just another scam prosper is doing to give them more time before they go out of business.

[HollowOak]

3. Commence legal action to recover the loan amount. That way there are a few PRs on the credit record as well.

ETA: Not strictly a PCOCT (God, the acronyms we invent), but Prosper should amend the LRA to make borrowers (rather than lenders) responsible for collections costs.

[onthefence]

* Let the debt collection agencies continue to have a crack at it.  (The more the debt is behind, the bigger their reward for collecting, the more their incentive to plug away at those individuals).

[onthefence]

Doug Fuller has some experience at least working with bigger companies that deal with debt.  I wonder what he thinks & I wonder if prosper's management is listening to him.

[112233]

PCOCT = another shell



 .. can you keep your eye on the loan?

[onthefence]

PCOCT = another shell

Post-Coital Obfuscation Connotation Techniques
Post-Clusterfuck Obfuscation Connotation Techniques

[Xenon481]

PCOCT (pronounced like peacock with a t sound at the end) is a fitting acronym as just like it's fowl namesake, they can dress it all up and make it look pretty, but ultimately it means absolutely nothing.

[xraider]

First step (with HO - doesn't fit within thread but absolutely essential first step) - put costs of collection, INCLUDING LEGAL FEES, on borrower.  Amend the promissory note (duh) to say this.  I've advocated this as long as I've been a lender.

Second step (again, doesn't fit within the thread technically) but if a borrower says he is unwilling to pay, or otherwise blows off the collection agency, like 90+% of the borrowers do, accelerate the loan right then.  Amend the promissory note so the note may be accelerated when 30+ late if there is no good faith effort to repay.  That may give an incentive to pay.

Once there is an attorneys' fees clause, sue and garnish wages.  Let the word get out on the CreditBoards of the world that Prosper WILL sue and WILL chase deadbeats.

[Elmslice]

My opinion is that Prosper made a big mistake when they decided to cancel sales to junk debt buyers.   They are a small company with apparently very limited resources, and the idea that they can take on this function and do it well makes no sense to me.   They have lots of other fish to fry, and I suggest they sell their backlog of nonperforming loans for whatever they can get, initiate periodic sales going forward,  and not even try to do this in house.

[onthefence]

My opinion is that Prosper made a big mistake when they decided to cancel sales to junk debt buyers.   They are a small company with apparently very limited resources, and the idea that they can take on this function and do it well makes no sense to me.   They have lots of other fish to fry, and I suggest they sell their backlog of nonperforming loans for whatever they can get, initiate periodic sales going forward,  and not even try to do this in house.

I don't know.  If given the option to take 1% or to just let it ride, I'd let it ride.  Returns on earlier collection efforts were much better.  The question is are those Junk Debt sales methods still available, or are the original Junk Debt purchasers no longer interested at those rates?

[lenderguy]

I don't know.  If given the option to take 1% or to just let it ride, I'd let it ride.  Returns on earlier collection efforts were much better.  The question is are those Junk Debt sales methods still available, or are the original Junk Debt purchasers no longer interested at those rates?

I think the answer is the later... IIRC, Fuller has been on record as saying that the junk debt markets were flooded with credit card debt in March, and the buyers don't want to deal with "unknown" debt when known debt is on the market in such quantities.

After all, as lenders, we've originated some really crappy loans.  If I was a debt buyer, I wouldn't want to touch an HR with 23 CDQ and $100k in delinquent debt.  If a credit card company issued a card to that type of person, they'd give them a limit of $200 and load up that card with $173 in fees.

[Elmslice]

After all, as lenders, we've originated some really crappy loans.  If I was a debt buyer, I wouldn't want to touch an HR with 23 CDQ and $100k in delinquent debt.  If a credit card company issued a card to that type of person, they'd give them a limit of $200 and load up that card with $173 in fees.

I agree -- the loans themselves have very little value, and the structure of the loans when compared to credit cards and other unsecured debt makes it almost impossible to collect.   So why would Prosper want to spend any of its limited resources on this function? 

What I think is beyond dispute is that Prosper is handling this poorly related to lenders' accounts.   There's simply no reason to show these loans as active and accruing interest, and to include loan value and interest in account value calculations.   

I suppose all of this is somewhat off topic from the OP -- but my feeling is that these debts as a group are essentially uncollectable and the less time spent on them, the better.  Sell em for whatever you can get, clean up lenders' account value calculations, and move on.

[ira01]

I don't know.  If given the option to take 1% or to just let it ride, I'd let it ride.  Returns on earlier collection efforts were much better.  The question is are those Junk Debt sales methods still available, or are the original Junk Debt purchasers no longer interested at those rates?

I think the answer is the later... IIRC, Fuller has been on record as saying that the junk debt markets were flooded with credit card debt in March, and the buyers don't want to deal with "unknown" debt when known debt is on the market in such quantities.

After all, as lenders, we've originated some really crappy loans.  If I was a debt buyer, I wouldn't want to touch an HR with 23 CDQ and $100k in delinquent debt.  If a credit card company issued a card to that type of person, they'd give them a limit of $200 and load up that card with $173 in fees.

There are 1,865 loans showing on LS as 4+months late.  Of those, 506 are HR and 18 are NC.  Thus, only 28% of the 4+month lates are HR/NC.  50 of the 4+month lates are AA, 83 are A, and 180 are B.  Another 352 are C.  So it would seem that there is plenty for the JDB's to work with without having to spend a lot of time and effort on the "HR with 23 CDQ and $100K in delinquent debt."