• 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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I'm the CTO here at You raise excellent points. Here is the detail of exactly what we do regarding collections.

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):

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.

Thanks for posting, John! I look forward to seeing how 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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