Books

  • Jeff Michael: Repair Your Credit and Knock Out Your Debt

    Jeff Michael: Repair Your Credit and Knock Out Your Debt
    I highly recommend this book because I wrote it.

  • Edie Milligan: Tips from the Top: Targeted Advice from America's Top Money Minds

    Edie Milligan: Tips from the Top: Targeted Advice from America's Top Money Minds
    I have about a dozen entries in this book.


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Comments

Hi,

I'm the CTO here at Prosper.com. You raise excellent points. Here is the detail of exactly what we do regarding collections.
http://www.prosper.com/public/help/topics/borrower-payments_delinquency_fees.aspx

When the collection agency has to become involved, the agency will do everything on behalf of the lenders they would do if they were contracted with a bank or credit card agency.

The key is that they are knowledgeable in federal and state laws, and have well-established processes that protect both the lender and borrower from legal risk associated with inappropriate collection-related activities.

When a loan does finally go to a collection agency, there is a servicing fee (which we detail here):

http://www.prosper.com/public/help/topics/lender-collection_agencies.aspx

So that fee will impact lenders' ultimate returns. But it's worth noting that we do not profit from the collection agency fees in any way.

Hope this helps.
-john

Thanks for posting, John! I look forward to seeing how Prosper.com works out. One hopes the lenders at your site will rarely have to take advantage of your collection services. I bring it up because, as you can imagine, we spend a fair amount of time here moaning about how evil those creditors and collection agencies are.

I think Prosper might just teach people that creditors and collectors aren't necessarily evil, provided they follow the rules (federal and state laws you mention) and in fact, provide a valuable service.

Thanks for writing this as I was researching P2P loans and how that works for an article. Great resources you have for them. A little dated, but good for the history behind how it works.

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