Ned: Well Fred, I see you haven't updated your blog since the two open letters to prosper.com . Does that mean everything is going along smoothly now?
Fred: Well... not exactly.
Ned: So did Prosper respond to any of the issues you raised?
Fred: There was a little correspondence, but no action.
Ned: So collections hasn't been fixed?
Fred: We haven't seen any change in collections at all. Zip. Nada. Nothing. This is one area where I got some agreement from Prosper management that things were broken. They just don't care. They view themselves as a broker (ala Ebay), and view the loan servicing business as one where you just turn some cranks and money flows thru (or not) and you scrape off some revenue. They don't take ownership of their own performance at all. The entire collections operation continues to be simply an autodialer. This is one of the reasons default performance is so bad. Its not the only reason, but it is a major one.
Ned: Sad. Well what about groups. Are they fixed?
Fred: Well, no. They aren't. There haven't been any substantive changes in groups at all. Prosper management seemed to think that the little change they made in group leader remuneration would have a large effect on group leader behavior. I don't think that's had much fundamental effect. Prosper invented this fabulous friends/endorsement system which has the potential to provide community effects far superior to the silly group system, but they haven't gone anywhere with it. Frustrating to watch.
Ned: So are the issues you raised in your two open letters still valid?
Fred: Generally yes. Especially open letter #2, because it dealt with collections, and collections has been untouched. Letter #1 on the other hand gave a long list of little detailed examples where Prosper misled folks, or allowed group leaders to mislead folks, and some of those have been cleaned up.
Ned: What other subjects did you plan to hit in your letters?
Fred: I had hoped to do one on communication and community. On the other hand, a lot of people are hitting Prosper pretty hard on these issues of late, so it seems like the problems should be obvious. Can I really add any understanding to the issue? Not sure. Also I'd have to work really hard to stay calm while writing on this subject. Also hoped to do one on the math involved in estimating lender performance. Actually have that half written. Just need to find the enthusiasm to finish it.
Ned: Anything else you'd like to say?
Fred: The lendingstats web site is great. I really missed it when it was down for a few weeks. I thank Mr Lendingstats for bring it back up.
Ned: Thanks Fred. We'll check back in another few months.
Fred: See you then.