Author Topic: More gaming of the system?  (Read 18849 times)

GS

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More gaming of the system?
« on: August 17, 2013, 09:21:07 AM »
Something strange has happened the last couple of times I tried to buy notes.  At the designated posting time, the notes appear for second, but are gone before I can click through ... which is the new normal for LC ... but, some of the A/B notes reappear after a minute.  I think "big money" is actually "locking up" almost all the new notes temporarily, while they decide which ones to keep and which ones to release.  Anyone else notice?  I've seen this the last two times I've tried to buy off the platform.

brycemason

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Re: More gaming of the system?
« Reply #1 on: August 17, 2013, 09:48:21 AM »
There is absolutely this locking up behavior. I watched one loan in particular today that was "closing" for 10 minutes (or more, I stopped observing) with 50% of the note in shopping carts (presumably one). If your bank account is big enough you could indiscriminately hold all the loans and review them in a relaxed way for about 25 minutes (LC appears to remove any fractions in the shopping cart after about 30 minutes after the hour).

investforfreedom

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Re: More gaming of the system?
« Reply #2 on: August 17, 2013, 09:50:30 AM »
Yup. I have seen this happening numerous times--in fact just now when the new listings came out at 8:00AM, CST. 


Something strange has happened the last couple of times I tried to buy notes.  At the designated posting time, the notes appear for second, but are gone before I can click through ... which is the new normal for LC ... but, some of the A/B notes reappear after a minute.  I think "big money" is actually "locking up" almost all the new notes temporarily, while they decide which ones to keep and which ones to release.  Anyone else notice?  I've seen this the last two times I've tried to buy off the platform.

brycemason

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Re: More gaming of the system?
« Reply #3 on: August 17, 2013, 10:00:32 AM »
The fairer policy is not to have the concept of a lockup period. Buy your fraction and if it's no longer available in the size you wanted, oh well, you waited too long. Just because you have a large cash balance doesn't mean you get to dominate.


investforfreedom

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Re: More gaming of the system?
« Reply #4 on: August 17, 2013, 10:06:28 AM »
The fairer policy is not to have the concept of a lockup period. Buy your fraction and if it's no longer available in the size you wanted, oh well, you waited too long. Just because you have a large cash balance doesn't mean you get to dominate.

Bryce, what if you have 3 or 4 big investors who will buy 25% of each loan?  We would still be left with nothing or next to nothing.   My recommendation is a lockout period on large investments--for say, the first 15, 20 or 30 minutes.
« Last Edit: August 17, 2013, 10:25:23 AM by investforfreedom »

GS

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Re: More gaming of the system?
« Reply #5 on: August 17, 2013, 10:16:07 AM »
Thanks for confirming this ... apparently the strategy of logging on a 9-1-5-9 ET and hoping to get something is dead ... unless you want to keep refreshing your browser for several minutes to see what gets thrown back ...

mo

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Re: More gaming of the system?
« Reply #6 on: August 17, 2013, 11:03:04 AM »
You guys should report this to LendingClub.  Their API doesn't have the concept of locking up a loan by adding it to an order so who ever is doing this is likely abusing LendingClub's website to achieve this which is probably against their terms of service and they might be willing to ban the person or other wise take some measure to make it stop.

On the other hand if you want to try the trick yourself what's probably going on is they are using a page scrape based library like https://python-lendingclub.readthedocs.org/en/latest/ and they will start an order and add every note to it like so...

order = lc.start_order()
order.add(0000001, 25)
order.add(0000002, 25)
...


Once they are ready to order for real they remove all the loans they don't actually intend to buy and then execute the order with only the notes they want left.


order.remove(0000002)
order.execute()


This effectively means they have however long LC will hold an order to examine the notes.  Clever trick.  Competition is really heating up.

Terms of Service: https://www.lendingclub.com/info/terms-of-use.action
« Last Edit: August 17, 2013, 12:36:28 PM by mo »

Lovinglifestyle

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Re: More gaming of the system?
« Reply #7 on: August 17, 2013, 11:19:59 AM »
I put $25 portions of loans straight from my LC filter into the basket and they stay there for a reasonable amount of time.  Then I add more from other sites' access functions.  At the end, the ones that went directly from LC to the basket are still there.  I do not want that convenience to go away! 

If there is an abuse problem that needs to be solved I hope the remedy won't be worse than the "disease"!

Rob L

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Re: More gaming of the system?
« Reply #8 on: August 17, 2013, 11:27:04 AM »
I can also confirm your observation and add a few comments of my own.

It is not possible to do this using the API as I understand it. If you use the API you bought it, you own it. There is no concept of an API shopping cart. There are a couple of possibilities. One is that this behavior is some artifact of the LC software during heavy activity and loans nearing 100% funding. Something going on to prevent deadlocks, complex semaphore management, etc.

The other obvious possibility is auto-investing by one or more well funded entities through the normal website portal (call it screen scraping or its equivalent if you will). With a computer rather than a human at the other end there's no reason this shouldn't be just about as fast as going in through the API, but with the advantage of the shopping cart lock out period. If this is what is going on then LC could, if it wanted, put a stop to it quickly simply by limiting the amount that can be purchased in any single loan at one time via the web portal (say $200); or I should say this would make it much more difficult.

I've seen a single loan quickly disappear, re-appear after a minute or so, then disappear and reappear again. Not enough time for any manual screening of the loan, which would be the only point of using the shopping cart lockout period. This is puzzling and argues for the LC software artifact possibility.

What is very clear is that the pattern of loan availability isn't a step-function up at loan release, followed by a water fall downward as loans are purchased, but a series of downs AND ups during the first few minutes after LC releases new loans.
« Last Edit: August 17, 2013, 11:43:54 AM by Rob L »

Rob L

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Re: More gaming of the system?
« Reply #9 on: August 17, 2013, 11:50:10 AM »
I put $25 portions of loans straight from my LC filter into the basket and they stay there for a reasonable amount of time.  Then I add more from other sites' access functions.  At the end, the ones that went directly from LC to the basket are still there.  I do not want that convenience to go away! 

If there is an abuse problem that needs to be solved I hope the remedy won't be worse than the "disease"!

I don't understand this. Please describe what the "add more from other sites' access functions" means?

GS

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Re: More gaming of the system?
« Reply #10 on: August 17, 2013, 11:55:31 AM »
So, the game has changed from "filter, then add to order", to "add to order, then filter".  I agree, it is clever, and one more nail in the coffin for the small investor.

I really need to learn this python scripting thing...

brycemason

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More gaming of the system?
« Reply #11 on: August 17, 2013, 12:11:56 PM »
Yes, GS, well put!

core

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Re: More gaming of the system?
« Reply #12 on: August 17, 2013, 12:22:58 PM »
You guys should report this to LendingClub.  Their API doesn't have the concept of locking up a loan by adding it to an order so who ever is doing this is likely abusing LendingClub's website to achieve this which is probably against their terms of service and they might be willing to ban the person or other wise take some measure to make it stop.

I don't know.  The abuse here is abusing the shopping cart lockup, not abusing screen scraping.  So if I was working there at LC, my fix would be to get rid of the lockup loophole altogether.  If the loan sells out while it's in your cart, so be it:  You can get a notification of that at the end.  Yes, Lovinglifestyle, I know you like being able to lock notes up.  Who wouldn't?  It's abusing the system though.  The fact that you limit yourself to $25 doesn't really change the fact that it's still abuse.  IMHO.

Edit-  I do like Rob's idea of a dollar limit for the cart though.  That would at least limit the damage in the short term.

On the other hand if you want to try the trick yourself what's probably going on is they are using a page scrape based library library like https://python-lendingclub.readthedocs.org/en/latest/

I highly doubt "big money" is using some freebie 3rd party library and it's also unlikely they are using some toy scripting language.  If they're going to play $big then they're going to use serious stuff and shave the milliseconds.
« Last Edit: August 17, 2013, 12:25:04 PM by core »

berniemadeoff

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Re: More gaming of the system?
« Reply #13 on: August 17, 2013, 12:23:15 PM »
I stand by my "LC RIP - Aug 2013" for retail investors prediction... maybe IR keeps some in the game for longer but nothing gets better until LC and Prosper decide to level the playing field somehow.

When these guys go public in a year or two, it will be a sham for them to claim this is P2P lending anymore.  They will probably try to market themselves as the "Facebooks of Banking" and we will all know it to be a flat out lie.

At the rate they're going, these sites will be reduced to nothing more than online consumer loan underwriting platforms for institutional investors. 
« Last Edit: August 17, 2013, 12:32:46 PM by berniemadeoff »

Lovinglifestyle

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Re: More gaming of the system?
« Reply #14 on: August 17, 2013, 12:38:45 PM »
I put $25 portions of loans straight from my LC filter into the basket and they stay there for a reasonable amount of time.  Then I add more from other sites' access functions.  At the end, the ones that went directly from LC to the basket are still there.  I do not want that convenience to go away! 

If there is an abuse problem that needs to be solved I hope the remedy won't be worse than the "disease"!

I don't understand this. Please describe what the "add more from other sites' access functions" means?

Sorry to be unclear.  I meant clicking on "Invest" manually on either IR or PeerCube on their respective filtered results page. Sometimes I click Invest for the same loan twice, unintentionally because it's in a couple of filters, and then I have to remember to decrease the $50 to $25.  Practice has made me better at that than I was, lol.

Core, I could live with any dollar limit for the cart that would buy a few seconds of time.  However, minutes are better.
A minimum waiting period for large investors would be even better.