Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: ktrdsl23 on May 02, 2017, 11:00:00 PM
Post by: ktrdsl23 on May 02, 2017, 11:00:00 PM
Right 
I'm sure they just recently discovered this as it's been discussed around here for months.
Important Account Update
It recently came to our attention that the annualized net return numbers displayed on your account overview page were inaccurate due to a system error. This error only affected the Annualized Net Return and Seasoned Annualized Net Return numbers and has now been fixed.
This error did not impact any other part of your account, including payments, deposits, monthly statements, tax documents, and note and loan level information - including estimated returns.
We sincerely apologize for this error. If you have any questions, please email us at [email protected].
I'm sure they just recently discovered this as it's been discussed around here for months.Important Account Update
It recently came to our attention that the annualized net return numbers displayed on your account overview page were inaccurate due to a system error. This error only affected the Annualized Net Return and Seasoned Annualized Net Return numbers and has now been fixed.
This error did not impact any other part of your account, including payments, deposits, monthly statements, tax documents, and note and loan level information - including estimated returns.
We sincerely apologize for this error. If you have any questions, please email us at [email protected].
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: Eamonnca1 on May 02, 2017, 11:00:00 PM
Post by: Eamonnca1 on May 02, 2017, 11:00:00 PM
Just got it too. My rate has gone from over 10% to 8%.
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: newstreet on May 02, 2017, 11:00:00 PM
Post by: newstreet on May 02, 2017, 11:00:00 PM
If this isn't the final nail in the coffin, I don't know what would be. Misstating returns to investors is huge SEC violation.
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: sean3.eth on May 02, 2017, 11:00:00 PM
Post by: sean3.eth on May 02, 2017, 11:00:00 PM
Um this is kind of a big deal...
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: TravelingPennies on May 02, 2017, 11:00:00 PM
Post by: TravelingPennies on May 02, 2017, 11:00:00 PM
My return went from like 14% to around 7%. I stopped reinvesting and started transferring cash out about 4 months ago when I first investigated this (after somebody around here mentioning it). Shame on me for just assuming that I was getting a higher rate but shame on Prosper x 1000 for misleading investors. As soon as I saw that I knew this wasn't a company I want to do business with. I still have 4.5 years to let the rest of my loans mature but as I get money back it gets transferred straight out.
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: TravelingPennies on May 02, 2017, 11:00:00 PM
Post by: TravelingPennies on May 02, 2017, 11:00:00 PM
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: NYD3030 on May 02, 2017, 11:00:00 PM
Post by: NYD3030 on May 02, 2017, 11:00:00 PM
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: TravelingPennies on May 02, 2017, 11:00:00 PM
Post by: TravelingPennies on May 02, 2017, 11:00:00 PM
Also I'm submitting a complaint to the Consumer Financial Protection Bureau and suggest you all do the same.
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: TravelingPennies on May 02, 2017, 11:00:00 PM
Post by: TravelingPennies on May 02, 2017, 11:00:00 PM
Better hurry before Trump get rid of it.
Prosper just hired a new CFO. It's likely he discovered the error......or wouldn't go along with the misstatements. CFOs are accountable (read-would be thrown under the bus by the CEO). Timing make sense. Really sucks for him to be put in this position-I've been there.
Prosper just hired a new CFO. It's likely he discovered the error......or wouldn't go along with the misstatements. CFOs are accountable (read-would be thrown under the bus by the CEO). Timing make sense. Really sucks for him to be put in this position-I've been there.
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: Gatsby on May 02, 2017, 11:00:00 PM
Post by: Gatsby on May 02, 2017, 11:00:00 PM
I think they used to explain the formula somewhere or maybe that was LC. Can't wait for my remaining loans to mature and never have to hear from Prosper again. Have you seen that returns graph on their site..scary stuff!
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: TravelingPennies on May 03, 2017, 11:00:00 PM
Post by: TravelingPennies on May 03, 2017, 11:00:00 PM
I'm not sure that I have any proof that it showed 14% as it doesn't appear to show it on the statements. I just know when I logged in I would always see crazy high numbers. I think it was around 16% before I stopped reinvesting my principal into new notes. I guess i should have screen shot the number back then.
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: TravelingPennies on May 03, 2017, 11:00:00 PM
Post by: TravelingPennies on May 03, 2017, 11:00:00 PM
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: Prescott on May 03, 2017, 11:00:00 PM
Post by: Prescott on May 03, 2017, 11:00:00 PM
I lost about 4% on each of my two different accounts I manage.
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: kaw753 on May 04, 2017, 11:00:00 PM
Post by: kaw753 on May 04, 2017, 11:00:00 PM
Hello,
Registered just to discuss this topic.
They sent me an e-mail actually showing me their errors for the past 8 quarters. That was nice of them to provide evidence in an e-mail for the class action lawsuit that is probably already being worked on. In the support case, they asked me if I would like to be contacted by a senior person via phone, which I suggested is a wonderful idea.
My returns went down 4%. I thankfully only purchased 3 year loans, but I am now stuck with below average returns on those loans too. I am going to demand they at least cash me out of those ASAP. We will see. Wiki tells me the are regulated by the SEC, so good luck to them.
Registered just to discuss this topic.
They sent me an e-mail actually showing me their errors for the past 8 quarters. That was nice of them to provide evidence in an e-mail for the class action lawsuit that is probably already being worked on. In the support case, they asked me if I would like to be contacted by a senior person via phone, which I suggested is a wonderful idea.
My returns went down 4%. I thankfully only purchased 3 year loans, but I am now stuck with below average returns on those loans too. I am going to demand they at least cash me out of those ASAP. We will see. Wiki tells me the are regulated by the SEC, so good luck to them.
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: TravelingPennies on May 04, 2017, 11:00:00 PM
Post by: TravelingPennies on May 04, 2017, 11:00:00 PM
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: kaw753 on May 04, 2017, 11:00:00 PM
Post by: kaw753 on May 04, 2017, 11:00:00 PM
The notice said to contact that e-mail address if I had more questions and I did. They then sent me a quarterly breakdown of their errors, so it does exist for each customer.
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: sean3.eth on May 04, 2017, 11:00:00 PM
Post by: sean3.eth on May 04, 2017, 11:00:00 PM
83.5% - The percentage of active investors who received returns that met or exceeded their expectations
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: Fred93 on May 04, 2017, 11:00:00 PM
Post by: Fred93 on May 04, 2017, 11:00:00 PM
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: TravelingPennies on May 04, 2017, 11:00:00 PM
Post by: TravelingPennies on May 04, 2017, 11:00:00 PM
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: policeneauts on May 04, 2017, 11:00:00 PM
Post by: policeneauts on May 04, 2017, 11:00:00 PM
I just called them, they're going to be emailing me my previously misstated return figure(s). I'm pretty certain though it's dropped by 30-50%. I'll be filing with Consumer Financial Protection Bureau.
I'm surprised there isn't more widespread outrage across the internet on this. Maybe it will take a few days, as I ignored the email they sent me two days ago and only in logging in randomly today did I see the note.
I'm surprised there isn't more widespread outrage across the internet on this. Maybe it will take a few days, as I ignored the email they sent me two days ago and only in logging in randomly today did I see the note.
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: bobeubanks on May 04, 2017, 11:00:00 PM
Post by: bobeubanks on May 04, 2017, 11:00:00 PM
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: TWLMG on May 04, 2017, 11:00:00 PM
Post by: TWLMG on May 04, 2017, 11:00:00 PM
Wow, I'm doing something wrong. You're getting over 9% return on A and B loans. I'm trying to get that and I'm funding HR and E loans. Props to you, my good sir.
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: ktrdsl23 on May 05, 2017, 11:00:00 PM
Post by: ktrdsl23 on May 05, 2017, 11:00:00 PM
The Financial Times reported on this issue. They quoted my posts from the first page of this thread in their article.
https://www.ft.com/content/91d9bc96-30f0-11e7-9555-23ef563ecf9a
https://www.ft.com/content/91d9bc96-30f0-11e7-9555-23ef563ecf9a
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: TravelingPennies on May 05, 2017, 11:00:00 PM
Post by: TravelingPennies on May 05, 2017, 11:00:00 PM
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: panther02912 on May 05, 2017, 11:00:00 PM
Post by: panther02912 on May 05, 2017, 11:00:00 PM
ktrdsl23--can you post the article text. I'm getting a pay-wall.
My account has loans mostly 2-3 yrs old, biased towards lower grades. I think my quoted returns dropped from ~12% to about 6%, but am not sure since they removed the old number. I am certain that I made ongoing investment decisions based upon the prior, higher number.
Prosper screwed up, big time IMO. I emailed them requesting:
1 My annualized Return numbers before and after the revision.
2 Details about how theyr evised the calculation to reach the new return numbers. Had they neglected a factor or used an incorrect formula?
3 Details about about how the revision affects theinvestor population overall. For example, a new by old plot of returns and a quantile-breakout of adjustments amount. Was my account's downgrading typical or one of the worst?
My account has loans mostly 2-3 yrs old, biased towards lower grades. I think my quoted returns dropped from ~12% to about 6%, but am not sure since they removed the old number. I am certain that I made ongoing investment decisions based upon the prior, higher number.
Prosper screwed up, big time IMO. I emailed them requesting:
1 My annualized Return numbers before and after the revision.
2 Details about how theyr evised the calculation to reach the new return numbers. Had they neglected a factor or used an incorrect formula?
3 Details about about how the revision affects theinvestor population overall. For example, a new by old plot of returns and a quantile-breakout of adjustments amount. Was my account's downgrading typical or one of the worst?
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: TravelingPennies on May 05, 2017, 11:00:00 PM
Post by: TravelingPennies on May 05, 2017, 11:00:00 PM
Instructions for reading FT.COM (Financial Times) without a subscription...
As you have noted, direct links to FT.COM articles only work for folks with subscriptions (paywall). The secret is to search for the article at google, and then click on the google link. FT allows folks who link from google to read an article without a subscription. Go to google.com, and type the following into the search bar...
prosper admits miscalculation site:ft.com
Google will promptly find articles on FT which contain these words, which will of course include the one linked above. Click on it.
The article doesn't say anything you don't already know from reading this thread.
As you have noted, direct links to FT.COM articles only work for folks with subscriptions (paywall). The secret is to search for the article at google, and then click on the google link. FT allows folks who link from google to read an article without a subscription. Go to google.com, and type the following into the search bar...
prosper admits miscalculation site:ft.com
Google will promptly find articles on FT which contain these words, which will of course include the one linked above. Click on it.
The article doesn't say anything you don't already know from reading this thread.
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: TravelingPennies on May 05, 2017, 11:00:00 PM
Post by: TravelingPennies on May 05, 2017, 11:00:00 PM
I just submitted a complaint to the SEC as wiki indicates this is who regulates peer to peer lenders.
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: TravelingPennies on May 05, 2017, 11:00:00 PM
Post by: TravelingPennies on May 05, 2017, 11:00:00 PM
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: Peter on May 05, 2017, 11:00:00 PM
Post by: Peter on May 05, 2017, 11:00:00 PM
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: TravelingPennies on May 06, 2017, 11:00:00 PM
Post by: TravelingPennies on May 06, 2017, 11:00:00 PM
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: panther02912 on May 08, 2017, 11:00:00 PM
Post by: panther02912 on May 08, 2017, 11:00:00 PM
Well, I got at partial answer to my questions from Prosper: 12.7% before the adjust and 6.45% after. More than 50% lower!
They also provided their intended formula but no details about the mistake they were making:
Annualized Net Return = [ ((Payments Received – Servicing Costs – Charge Offs + Recoveries) / Average Daily Amount of Principal Outstanding) / Dollar Weighted Average Note Age of Portfolio in Days ] x 365
My account skewed several years old and low-grade, so my guess is their mistake had to do with write-offs. I also guess that my risky account took an especially big haircut. That said, if they want to rebuild trust, Prosper still owes us complete answers to questions 2 and 3.
1 My annualized Return numbers before and after the revision.
2 Details about how they revised the calculation to reach the new return numbers. Had they neglected a factor or used an incorrect formula?
3 Details about about how the revision affects the investor population overall. For example, a new by old plot of returns and a quantile-breakout of adjustments amount. Was my account's downgrading typical or one of the worst?
They also provided their intended formula but no details about the mistake they were making:
Annualized Net Return = [ ((Payments Received – Servicing Costs – Charge Offs + Recoveries) / Average Daily Amount of Principal Outstanding) / Dollar Weighted Average Note Age of Portfolio in Days ] x 365
My account skewed several years old and low-grade, so my guess is their mistake had to do with write-offs. I also guess that my risky account took an especially big haircut. That said, if they want to rebuild trust, Prosper still owes us complete answers to questions 2 and 3.
1 My annualized Return numbers before and after the revision.
2 Details about how they revised the calculation to reach the new return numbers. Had they neglected a factor or used an incorrect formula?
3 Details about about how the revision affects the investor population overall. For example, a new by old plot of returns and a quantile-breakout of adjustments amount. Was my account's downgrading typical or one of the worst?
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: kaw753 on May 08, 2017, 11:00:00 PM
Post by: kaw753 on May 08, 2017, 11:00:00 PM
It has been explained to me. Two years ago, they started to sell their charge-offs to a loan collection agency. So, they would get 10 cents on the dollar and give that to the investor. What they forgot to do was subtract the 90 cents on the dollar that was the loss from your returns.
They are doing nothing to compensate people beyond showing people how to turn auto-invest to off. The loans are registered with the SEC, so I am sure everyone can find where to submit the complaint.
My concern is getting my money out before they are shutdown.
They are doing nothing to compensate people beyond showing people how to turn auto-invest to off. The loans are registered with the SEC, so I am sure everyone can find where to submit the complaint.
My concern is getting my money out before they are shutdown.
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: Rob L on May 08, 2017, 11:00:00 PM
Post by: Rob L on May 08, 2017, 11:00:00 PM
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: sean3.eth on May 08, 2017, 11:00:00 PM
Post by: sean3.eth on May 08, 2017, 11:00:00 PM
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: Fred93 on May 08, 2017, 11:00:00 PM
Post by: Fred93 on May 08, 2017, 11:00:00 PM
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: TravelingPennies on May 08, 2017, 11:00:00 PM
Post by: TravelingPennies on May 08, 2017, 11:00:00 PM
There are a few things wrong still:
- My seasoned returns dropped from 9.35% to 5.44%. But I have been at this since 2008. So.... how big was the miscalculation in the last 2 years that 9 years of returns dropped that much. I have invested more lately, but you can see the issue.
- They are advertising expected returns of 8.04% on their website. I am curious what mix of loans I would need to select to get that return?
FYI, I was told one of the issues is that credit card defaults in the US are accelerating rapidly. If that is true at very low interest rates and unemployment, the country has some bigger issues coming.
- My seasoned returns dropped from 9.35% to 5.44%. But I have been at this since 2008. So.... how big was the miscalculation in the last 2 years that 9 years of returns dropped that much. I have invested more lately, but you can see the issue.
- They are advertising expected returns of 8.04% on their website. I am curious what mix of loans I would need to select to get that return?
FYI, I was told one of the issues is that credit card defaults in the US are accelerating rapidly. If that is true at very low interest rates and unemployment, the country has some bigger issues coming.
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: TravelingPennies on May 08, 2017, 11:00:00 PM
Post by: TravelingPennies on May 08, 2017, 11:00:00 PM
Financial Times reported that this glitch has been going on for seven quarters. That takes us to Q3 2015, the same quarter that Prosper's CFO resigned. Notably, from 2014 to Q3 2015, Prosper had continuously been reporting "material weaknesses" in their "Internal Control over Financial Reporting." In future quarters, that disclosure was removed.
In regards to auditing, their 10-Ks say they're "exempt from the requirement that it include in its Annual Report on Form 10-K an attestation report on internal control over financial reporting by an independent registered public accounting firm."
So the "glitch" begins, the CFO resigns, the material weakness disclosure on internal controls disappears and no independent audit attestation is required over internal controls in their 10-K.
I'm not suggesting all these events are definitely related but I mean how did this problem go undetected?!
In regards to auditing, their 10-Ks say they're "exempt from the requirement that it include in its Annual Report on Form 10-K an attestation report on internal control over financial reporting by an independent registered public accounting firm."
So the "glitch" begins, the CFO resigns, the material weakness disclosure on internal controls disappears and no independent audit attestation is required over internal controls in their 10-K.
I'm not suggesting all these events are definitely related but I mean how did this problem go undetected?!
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: rawraw on May 13, 2017, 11:00:00 PM
Post by: rawraw on May 13, 2017, 11:00:00 PM
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: Meta4 on May 31, 2017, 11:00:00 PM
Post by: Meta4 on May 31, 2017, 11:00:00 PM
This explains the delta between my "seasoned" rate (~15%) and the XIRR of my portfolio (~7%).
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: TravelingPennies on June 04, 2017, 11:00:00 PM
Post by: TravelingPennies on June 04, 2017, 11:00:00 PM
I sent an e-mail to [email protected] to request the old calculations. By April 1st, my returns were overstated by a whopping 10.05%. I stopped contributing in March when I crunched my year-over-year XIRR and couldn't come anywhere near what Prosper was telling me I should be seeing.
Here are the old/new calcs Prosper sent to me:
I've stopped my automatic reinvestments and will move whatever I get back to a more traditional investment vehicle.
Here are the old/new calcs Prosper sent to me:
I've stopped my automatic reinvestments and will move whatever I get back to a more traditional investment vehicle.
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: TravelingPennies on June 04, 2017, 11:00:00 PM
Post by: TravelingPennies on June 04, 2017, 11:00:00 PM
That is incredible
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: Tomp on June 05, 2017, 11:00:00 PM
Post by: Tomp on June 05, 2017, 11:00:00 PM
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: TLM on June 06, 2017, 11:00:00 PM
Post by: TLM on June 06, 2017, 11:00:00 PM
I'm still suspicious of their calculations. Prosper now tells me I'm at 7.26% annualized (down from 9.something). XIRR has me at 8.1%, and that's artificially low relative to prosper's formula because it's based on deposit dates, and I've always moved slowly to get my deposits invested.
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: mrwhizzard on June 06, 2017, 11:00:00 PM
Post by: mrwhizzard on June 06, 2017, 11:00:00 PM
Title: "Recently came to our attention" ... net annulaized returns not accurate
Post by: dbsb3233 on July 17, 2017, 11:00:00 PM
Post by: dbsb3233 on July 17, 2017, 11:00:00 PM
Ironically, even with this error, I found Prosper's stated returns to be more accurate than LC's. 