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Author Topic: Possible to Inflate NAR by Selling on FolioFN?

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Possible to Inflate NAR by Selling on FolioFN?
OP: July 15, 2014, 11:00:00 PM
I see people post screenshots of their Lending Club NAR.  I think it would be possible to artificially boost this using FolioFN.  Here is what someone could do.

1) Open two accounts on Lending Club
2) In first account buy lots of loans with high interest rates, 20-25%
3) Anytime a loan is moved to 30-60 days late classification list it on Foliofn with 0% discount
4) In 2nd account, buy that note.

Account 1 would have no defaults or late loans so NAR would equal the weighted average interest rate.  Screenshot would look really nice.

Account 2 would have all the loses.

I am not advocating this, it would be fraudulent, but want to know a) is this possible?  and b) if so, give people caution when looking at a NAR screenshot.
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Possible to Inflate NAR by Selling on FolioFN?
#1: July 15, 2014, 11:00:00 PM
Only thing is Lending Club says the graphs don't include data points for anyone who has traded on Foliofn. Don't know if that's actually true though. What do Folio traders see when they try to look at graph?

Not sure doing this would be fraudulent?  You'd be selling to yourself at face'd have no gain in the selling account; you only avoid having losses....but then you would pick up those losses in your other account.  It would be fraudulent if the selling account were an IRA and you were trying to move losses to a taxable account so you could deduct them.  Assuming that wasn't happening, what would be the point?  Just to have bragging rights of having the top dot (while simultaneously having one of the bottom dots on the other account)?

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Possible to Inflate NAR by Selling on FolioFN?
#2: July 15, 2014, 11:00:00 PM
Good to know about chart only showing non-foliofn accounts.

My account is only 2 months old on average so I don't appear on the chart at all, but I assume your own account performance would show up even if others who have traded on foliofn do not.  Someone else who has an older account AND has traded on Foliofn should be able to confirm the behavior.

It wouldn't be fraudulent for your own income or taxes.  The loses would still be yours to bear.  It would just be an accounting trick to give bragging rights or potentially worse if someone tried to use a "fake" NAR screenshot to get other people to use their service, investment fund, or some other product.
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Possible to Inflate NAR by Selling on FolioFN?
#4: July 16, 2014, 11:00:00 PM
You don't even need to use photoshop.  Using Chrome's Developer Tools, you can easily manipulate the displaying of your NAR (blue circle) within the chart (svg).  Simply alter the circle tag with the class attribute value of "point circleMe".  Just for fun, I gave myself a NAR of ~22%....
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