Prosper.com - Doug Fuller's 60 Day Review

A little over 2 months ago, Prosper presented their new VP of Operations, Doug Fuller. He promised serious improvement in Prosper's disasterous collections department. Now that he's been on the job two months, it seems like time for a status check. How's Doug doin'?

Lets look at Prosper's collection statistics for the time since Doug's arrival.

As you can see from the chart, Prosper's statistic for late loans cured has increased by about 1% in the time since Doug joined.

How should we think about that improvement? Remember that in February '07, Prosper increased the lower cuttoff credit score for new borrowers, Because of that change the average quality of borrowers since that time is substantially improved. This change alone should cause the cure rate of late loans to increase slowly over time without any change in collection effort. Indeed, the cure rate has increased gradually since that time. The 1% improvement in the last 2 months is likely due to that effect alone.

What if the 1% improvement is due to Doug's effort. Is that a good result? Suppose he continues on this half-a-percent-per-month slope. It will take two years to get to 26% .

What about the "new agency test?" Dunno. Prosper has decided not to share the data. The only evidence of the test is a cryptic note on a few dozen loans. Dunno 'bout you, but none of my loans with the cryptica "new agency test" note have been cured. If there were great positive results, I'd expect Prosper would have shared them. I'd recommend sharing the results in any case, as the lenders are after all the owners of the loans.

So far Doug is just another disappointment. Hope he produces better results during the month of December. Nothing would make me happier. But frankly I believe structural changes are needed. As long as lenders lose thousands, and the collection agency only loses the opportunity to make a few bucks, the right things aren't gonna happen .

See my writeup from May 2007: Open letter #2 to Prosper.com