We need this guy to step up to the plate on collections:
http://desmoinesregister.com/apps/pbcs.dll...10337/1001/NEWS

I'm sure his rudeness inspired countless borrowers to bring their accounts current. (Countless=0).

Updated chart...
(IMG:http://img.villagephotos.com/p/2006-6/1187065/prosper-collections-rates_29592_2007-07-23.gif)

I have changed the vertical scale. I believe that most of the red curve represents bogus data. Prosper has never responded, but I believe that the big jump down on 7/2/07 likely represents them finally fixing the bug in the "net collected" calculation. Because I believe most of the red curve before that date was likely bogus, there is no particular reason to scale the chart so that it can be seen.

A few words about the title of this thread: I used the word "scandal" when I named the thread. My intent was to say that Prosper's collection results are scandalously poor. I still believe these collection results are scandalously poor.

From time to time someone replies on this thread saying that we shouldn't expect better results, because "everybody knows" or "their experience is" that collections normally only collects about 15%. I have not replied to each of these statements, but I do disagree with them. They're usually referring to some statistics from a completely different situation... one where they've given accounts to a collection agency after they are 3 months late or so. That is not what happens on Prosper. On Prosper the collection agency begins their work at 1 month late. When the purple curve (cured in 1st month) is at 8%, that means 92% of folks who are "1 month late" do not pay and thus convert to "2 months late" after 1 month of the collection agency trying to collect. This amazingly high roll rate from 1 month late to 2 months late is scandalously poor.

From time to time, someone replies saying "Well, that's just the way it is and nothing can be done to change it". This often comes with wise old sayings sucha as "You can't squeeze blood out of a turnip." I direct these people to the months of January thru March 2007. The collection statistics improved substantially during that period. (Look at the dark blue "total cured" curve. Ignore the red curve.) Why did that happen? Prosper or Penncro must have changed something! They haven't told us what it was. No matter. It is proof that things can change. We need more of that. On the other hand, from March 2007 until the present it looks like nothing at all has changed. No improvement. Nada. Zip.

Updated chart...
(IMG:http://img.villagephotos.com/p/2006-6/1187065/prosper-collections-rates_29592_2007-09-20.gif)
NB: These stats come from Prosper's collection agency web page.

Recent data shows no change in collections effectiveness.

We hope.

Here's an update thru October 14 2007. This chart shows the disposition of loans that have gone 1 month late, and therefore have been sent to Prosper's collection agency. Conclusion: Collections results continue to be scandalously bad.

Of those loans that go 1 month late, about 13.5% are cured, and the remaining about 86.5% go on to default.

(IMG:http://img.villagephotos.com/p/2006-6/1187065/prosper-collections-rates_29592_2007-10-14.gif)

The data for this chart comes from Prosper's Collection Agency Web Page. I have shown data only for Penncro. Although Prosper has two collection agencies, almost all late loans have gone to Penncro. The other agency, FirstSource, is doing even worse.

I have truncated the red "net collected" curve, because the data Prosper provided prior to 7/4/07 was obviously bogus.


A couple of weeks ago, Shira Levine published an interview with Doug Fuller, the new fellow in charge of Prosper collections. Some snips from that conversation are relevant.

Sounds great. Looking at the collections rates in the chart, I don't see a corresponding improvement in September. How can it be that a 40% improvement in contact rates produces no results in collections?

One way this could happen is if the contact rates were so small to begin with that a 40% increase is insignificant. Prosper has never published "contact rates", so we don't know how big a 40% increase is. If you were only contacting 5 people before, and you added 2, that would be a 40% increase, but the additional 2 contacts wouldn't affect the overal status of the 1148 loans in collections by much.

maybe they redefined what's considered a successful contact.

This plot tracks Prosper's collection performance since the hire of Doug Fuller, their new VP Operations.

(IMG:http://img.villagephotos.com/p/2006-6/1187065/prosper-collections-rates_10814_2007-10-29.gif)

The data for this chart comes from Prosper's Collection Agency Web Page.

For background on Doug Fuller, see Shira Levine's interview with Doug Fuller.

I had to guess the hire date. The first reference to Mr Fuller by a Prosper employee appeared on 9/12.

Edited to fix typos.

If this graph were a cardiogram, what would it say about the patient?

Maybe for the next 2 months, Prosper could try firing Doug Foster and randomly dispersing 2% of his salary to 50 different Prosper lenders.

Doesn't exactly look like he is off to a running start. :( I guess we now know why he is only giving quarterly updates to lenders. :o

But aren't we supposed to wait four months before we begin asking why, what and .....?
I think we just have to trust prosper, they will do whats best for us. :P


(Good lord, I am now a prosper shill and have not even been paid, given any stock options or any type compensation)