Prosper.Com Scam – What Should Be Believed? (Prosper Loans Marketplace, Inc. based in San Francisco) is now the leading group in the emerging peer-to-peer lending industry. is officially an online auction site where people can buy loans and request to borrow money.

Ever since it started, Prosper had acted like an eBay style online auction marketplace. The auction-style of lending and borrowing had the borrowers and lenders determine the actual loan rates using a Dutch auction-style system. But does the system make scam?

New Prospectus
Effective December 2010, Prosper filed with SEC a new prospectus changing their business model into that which uses fixed rates based on the formula evaluating the borrower’s credit risk.

With the new ruling, the lenders do not determine anymore the loan rate. Instead, they now can choose whether to invest or not at the offered rate styled like the one developed by the peer-to-peer lender Lending Club. This according to scam reviews online.

Prosper gets its revenues from the collection of a one-time fee on funded loans from borrowers. There are also fees for assessing an annual loan servicing fee to loan buyers.

This service fee was thought to be conceptualized from group banking concepts like the rotating savings and credit associations. Some of the ideas were derived from the concept of micro lending.

New Business Model
Prosper also has a transaction-based business model where the company will collect revenue by taking a fee on its customers’ transaction. Borrowers who receive a loan pay an origination fee of one to three percent, depending on the borrower’s credit grade, while the lenders will pay a 1% annual servicing fee.

Prosper might have a conservative, if not cautious, approach to their business, but at the moment they have the most solid reputation among many others in the same business. To know the truth, why not check out scam reviews and see for yourself?

Patty Bender

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