Title: can LC & P manipulate data to show borrower is late or in default even if not?
Post by: ybsad on January 03, 2013, 11:00:00 PM
Post by: ybsad on January 03, 2013, 11:00:00 PM
i started low-scale investing in 2011 to test the water and to move some of my bank's money that was only earning 1% interest (now 0.1%). and since the time i got my first statement from prosper then lendingclub, i've been asking myself the above subject.
what do i mean? can these two sites "play" (once in a while to not be obvious) with payment data they give the lenders? can they write that borrower is late or on default even if he/she isn't? can they write the borrower is under collection even if they're not actively pursuing the collection? in these cases, the borrower's payment goes to LC's or P's bank without the lender's knowledge. if $25 loan "is late or defaults", the lender writes it off with no question. but thousands of that a month from different lenders is a lot of money.
or is the borrower's payment automatically registered to the corresponding lender so there's no chance that the admins can manipulate payments? how can the SEC know that everything they're doing is legit? how can the lenders or the borrowers know? are they both transparent?
if the questions are far from remote to even take place, is there anything fishy that can happen in p2p lending?
thanks much!
what do i mean? can these two sites "play" (once in a while to not be obvious) with payment data they give the lenders? can they write that borrower is late or on default even if he/she isn't? can they write the borrower is under collection even if they're not actively pursuing the collection? in these cases, the borrower's payment goes to LC's or P's bank without the lender's knowledge. if $25 loan "is late or defaults", the lender writes it off with no question. but thousands of that a month from different lenders is a lot of money.
or is the borrower's payment automatically registered to the corresponding lender so there's no chance that the admins can manipulate payments? how can the SEC know that everything they're doing is legit? how can the lenders or the borrowers know? are they both transparent?
if the questions are far from remote to even take place, is there anything fishy that can happen in p2p lending?
thanks much!
Title: can LC & P manipulate data to show borrower is late or in default even if not?
Post by: AnilG on January 03, 2013, 11:00:00 PM
Post by: AnilG on January 03, 2013, 11:00:00 PM
It will be reckless for Lending Club or Prosper to do something like that. Consider the risk of getting discovered by an auditor and criminal repercussions to the Executives. There are easier way to chip pennies off the top by taking little bit longer to pay lenders after receiving payment from borrowers instead of doing something as outlandish and criminal as falsifying records.
Title: can LC & P manipulate data to show borrower is late or in default even if not?
Post by: Zach on January 03, 2013, 11:00:00 PM
Post by: Zach on January 03, 2013, 11:00:00 PM
Title: can LC & P manipulate data to show borrower is late or in default even if not?
Post by: SeanMcD on January 03, 2013, 11:00:00 PM
Post by: SeanMcD on January 03, 2013, 11:00:00 PM
Title: can LC & P manipulate data to show borrower is late or in default even if not?
Post by: william on January 03, 2013, 11:00:00 PM
Post by: william on January 03, 2013, 11:00:00 PM
^^^God that is hilarious. 
Title: can LC & P manipulate data to show borrower is late or in default even if not?
Post by: flyp52 on January 03, 2013, 11:00:00 PM
Post by: flyp52 on January 03, 2013, 11:00:00 PM
ybsad, if you're worried about how the p2p lenders could game you, think about what the big banks already did to you - pay you nothing on your deposits, leverage and lend recklessly, destroy the economy.
Title: can LC & P manipulate data to show borrower is late or in default even if not?
Post by: Peter on January 03, 2013, 11:00:00 PM
Post by: Peter on January 03, 2013, 11:00:00 PM
ybsad, as others have suggested I think it is highly unlikely for something like this to happen. If something like this was discovered it would risk their very existence. Not to mention the fact that it would have to pass scrutiny of all internal checks as well as outside auditors. Is it impossible? No. But it is very unlikely IMHO.
Title: can LC & P manipulate data to show borrower is late or in default even if not?
Post by: DanB on January 03, 2013, 11:00:00 PM
Post by: DanB on January 03, 2013, 11:00:00 PM
Is it my imagination or does the cat look a bit embarrassed to be in that photo?
Title: can LC & P manipulate data to show borrower is late or in default even if not?
Post by: AmCap on January 12, 2013, 11:00:00 PM
Post by: AmCap on January 12, 2013, 11:00:00 PM
It would be securities fraud, so I doubt it.