Just a touch of back story is needed on this one…

Travler505 bought it to Prosper’s attention that the way they were acting on payments in delinquent accounts was not in line the agreements that were in place at the time…

In my opinion, he took an extreme route to bring it their attention by sending letters certified mail and ccing many people…  (Required reading for the full back story: here and here and here).

Today Prosper via the Prosper Blog addressed all 3 issues, publicly thanked travler505, and went above and beyond by paying interest (Refunds to Lenders and Group Leaders).

Interest paid on all refunds

Also, because Prosper was clearly in error the application of all of the above payments in question, and our error involves a time delay between when Prosper should have made payments to lenders, Prosper will pay interest at California’s legal rate of 7% on all amounts due to the affected lenders or GLs, from the date the payment should have been made. Interest will be paid in all 3 situations mentioned above.

Again we apologize for these errors and appreciate these matters being brought to our attention.

While I disagree with the extreme approach (just my opinion), I am very happy that our community is aware and active and with Prosper for addressing the issues promptly, completely, and openly. 

P2P lending will change consumer finance, but to change a paradigm it will require active participation by all members of the community: borrowers, lenders, evangelists, ombudsmen, watchdogs, and even jesters.  The future is bright!

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