All,Given the tremendous response to this article: http://www.fool.com/investing/value/2008/08/29/avoid-this-co... and the questions raised in the comments section, I've decided to start this discussion thread. My purpose in starting it is to provide the key source material I used in writing the article. If you wish to do your own investigation and draw your own conclusions, be my guest.Article: "Prosper denied it directly loaned money to either a man who was declaring bankruptcy or to his wife , whom he accused of stealing his identity."Source material: http://www.prospers.org/blogs/media/blogs/Fred93/prosper-gae... , search for "By way of further answer, it is denied that Prosper loaned any money directly to the Plantiff or Defendant"Article: "That may seem straightforward, but it's actually directly contrary to the contract that Prosper had with the people who bought the loans it originated."Source material: http://www.prospers.org/blogs/media/blogs/Fred93/prosper-mid... , read the first paragraph.Article: "In this particular case, whether it was truly identity theft is tough to discern. If it was, Prosper would be on the hook to buy back the loan through its identity-theft guarantee."Source material: http://www.prosper.com/security/identity_fraud_guarantee.asp...Article: "The real problem is this: only Prosper knows the true identity of and has the ability to directly verify any claims (such as income) made by anyone looking to borrow money on its site."Source material: http://www.prosper.com/legal/privacy_policy.aspx , indicates that Prosper does not share any personal information with other members of Prosper unless the member chooses to do so.Article: "With Prosper as the original creditor on its older loans (WebBank originates the newer ones),"Source material: http://www.prosper.com/about/media_market_surveys.aspx?t=Apr... , "Through our agreement, all loans originated through the Prosper marketplace resulting from listings posted on or after April 15, 2008 are made by WebBank under its bank charter". Also, http://www.prospers.org/blogs/media/blogs/Fred93/prosper-mid... , "All loans originated through Prosper are made by Prosper Marketplace, Inc. from its own funds, and then sold by Prosper"Article: "it [Prosper] has rights to attempt to collect under the Fair Debt Collection Practices Act ."Source material: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf , "The term 'creditor' means any person who offers or extends credit creating a debt or to whom a debt is owed, but such term does not include any person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another."Article: "Prosper does administer collections on loans that go sour."Source material: http://www.prosper.com/about/ , "Prosper handles all on-going loan administration tasks including loan repayment and collections on behalf of the matched borrower and lenders."Article: "Fully 18.5% of all dollars loaned on Prosper between its inception and the end of June 2008 have gone delinquent."Source Material: http://www.lendingstats.com/loansFunded , an analysis done based on the table as it appeared when I wrote the article.Article: "More than 35% of the dollars loaned in February 2007 are in some stage of evaporating."Source Material: http://www.lendingstats.com/loansFunded , an analysis done based on the table as it appeared when I wrote the article.Article: "Prosper.com member Fred93, who has apparently invested more than $800,000 in Prosper loans, has repeatedly called into question the efficacy of Prosper's collections."Source material: For the loan amount: http://www.lendingstats.com/lenders/Fred93 (See "Total Loan Amount"). For Fred93's repeated questioning of Prosper's collections, see http://www.prospers.org/blogs/Fred93?cat=42 , http://www.prospers.org/blogs/media/blogs/Fred93/open-letter... , and http://www.prospers.org/blogs/Fred93/2008/05/04/prosper_com_... Article: "Likewise, Prosper.com member ira01, who has also reportedly invested a decent chunk of change, has posted to a discussion forum about several areas in which he says the company is not living up to customer expectations. They include: * Misleading advertising * The (now defunct) process for selling off non-performing loans * Poor identity and income verification * Erasing the old discussion forums where borrowers and loan purchasers could interact "Source material: For ira01's investment, see http://www.lendingstats.com/lenders/ira01 ("Total Loan Amount"). For ira01's comments, see http://www.prospers.org/forum/my_summary_of_prospers_problem... .Article: "A standard Prosper loan lasts three years."Source Material: http://www.prosper.com/help/topics/lender-borrower_payments.... "All Prosper loans are three-year loans."Article: [CD Rates quoted in the table near the end of the article]Source Material: http://www.bankrate.com/brm/rate/high_ratehome.asp?web=brm&a... , an analysis done based on the table as it appeared when I wrote the article.
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