### Author Topic: LC accounting problems  (Read 7664 times)

#### Fred93

• Hero Member
• Posts: 2221
##### LC accounting problems
« on: April 23, 2014, 05:29:24 AM »
I sent the following message to LC this morning...
Quote
I've found some discrepancies.  Need someone to investigate and provide an answer quickly.

Tonite I tried to do some calculations using my notes.csv file, and noticed some calculations weren't coming out right.  I investigated a few of the numbers, and found what appear to be several problems.

When I compare the notes.csv file downloaded from the LC web site against the information about my notes displayed on the LC web site, I find what appear to be disagreements.  When I compare both to my statements, again I find disagreements.  All these things should agree perfectly.

I will give three examples.  In each case, this is a paid off loan, just to make things real simple.

Loan #367384
The notes.csv file says
Amount Lent = \$756.55
The LC web site says
Loan Fraction = \$800.00
Payments to Date = \$946.46
Obviously these don't agree.  Then I went to my statements, where I found
Principal Invested = \$781.22

So what was the amount I invested?  \$756.55?  \$800.00?  \$781.22?  Why are these numbers all different?  Why do the payments to date numbers not agree?

Loan #373930
The notes.csv file says
Amount Lent = \$391.22
Payments to Date = \$474.06
The LC web site says
Loan Fraction = \$400.00
Payments to Date = \$474.06
In this case, the amount lent doesn't agree, but the payments to date do agree.  How can that be?  Different than the prior case.  I then went to the statements, where
Principal Invested = \$400.00
So in this case the statement agreed with the web site, unlike the prior example.

Loan #374309
The notes.csv file says
Amount Lent = \$195.56
Payments to Date = \$236.68
The LC web site says
Amount Lent = \$195.56
Payments to Date = \$236.68
So in this case, the notes.csv file matches the LC web site.  For a double check I looked at my statements and found... get ready...
Principal Invested = \$200.

In each of these three cases, different things agree, and different things disagree.

If any of you have observed this in the past, perhaps you know the answer.  If not, perhaps you should check some of the older loans in your notes.csv file to see if the numbers make sense.

#### core

• Hero Member
• Posts: 1784
• Your loss is my gain
##### Re: LC accounting problems
« Reply #1 on: April 23, 2014, 08:35:21 AM »
Very interesting.  Please let us know when you hear back from them.  Usually the official response is "It's too complicated, just trust us" or "Small errors accumulate over time, but on Judgement Day corrections will be applied which will reconcile everything".

Between this and the other thread, you're just about at that point where people mysteriously disappear after finding out too much.  Do be careful.  If you see a bunch of Frenchies wearing black hats, run for it.

Me, I see nothing wrong with my statements.  Nothing at all.

#### Fred93

• Hero Member
• Posts: 2221
##### Re: LC accounting problems
« Reply #2 on: April 23, 2014, 12:46:06 PM »
Between this and the other thread, you're just about at that point where people mysteriously disappear after finding out too much.  Do be careful.

What you describe actually happened to some prosper lenders in the early years.  Prosper actually banned some lenders for discovering/reporting borrower fraud, etc.

#### joshmer

• Newbie
• Posts: 17
##### Re: LC accounting problems
« Reply #3 on: April 23, 2014, 01:14:11 PM »
The differences between amount lent and principal invested looks to be their account for the origination fee on the loan to the borrow.  Although 2.2% for the last two loans is lower than their standard fee, maybe it was during a promotional period?  I don't know how to explain the 3 different numbers listed on the first loan.

#### Fred93

• Hero Member
• Posts: 2221
##### Re: LC accounting problems
« Reply #4 on: April 23, 2014, 01:22:11 PM »
They got back to me this morning.  The answer is...

These are notes I bought on folio.  I had forgotten that I ever bought notes on folio, but apparently I did, several years ago.

For loan ID 36784, the web shows \$800 'cause that's the original amount loaned in this note.  My statement says Principal Invested \$781.22 because that's the par value of the note at the time I bought it.  (some principal had been repaid)  Finally, the notes.csv file says Amount Lent \$756.55 because that's the amount I paid for the note on folio.  This explains why the three numbers are different.

Would be nice if there was a data dictionary for the notes.csv file that said what the fields were supposed to mean.

So when calculating from a notes.csv file, I guess you shouldn't be surprised if it appears someone paid you back more than you lent, because the "amount lent" numbers there aren't actually what you lent.

#### core

• Hero Member
• Posts: 1784
• Your loss is my gain
##### Re: LC accounting problems
« Reply #5 on: April 23, 2014, 01:27:51 PM »
These are notes I bought on folio.

Doh!  I hate it when that happens.  Whoops.  I wonder what that investigation time cost them. :-/

Prosper actually banned some lenders for discovering/reporting borrower fraud, etc.

What did they do with the banned members' notes in the accounts?  Did Prosper pay the users full value even for past due notes?  Or were the folks just prevented from buying new notes?

#### Fred93

• Hero Member
• Posts: 2221
##### Re: LC accounting problems
« Reply #6 on: April 23, 2014, 01:47:00 PM »
What did they do with the banned members' notes in the accounts?  Did Prosper pay the users full value even for past due notes?  Or were the folks just prevented from buying new notes?

Prosper simply banned them from buying new notes, banned them from sending messages to other members or participating in the forum (which were features of the prosper platform at that time).  There were forums outside prosper where lenders communicated, so we all kept in touch.

#### rawraw

• Hero Member
• Posts: 2790
##### Re: LC accounting problems
« Reply #7 on: April 23, 2014, 03:35:51 PM »
If you were around for Prosper forums, then you've been around a while.  They didn't exist for much longer after I started investing in LC.

#### Bohb Daishi

• Sr. Member
• Posts: 481
• I eat free lunches
##### Re: LC accounting problems
« Reply #8 on: April 24, 2014, 02:29:24 AM »
These are notes I bought on folio.

I'm a little late to the conversation, but I was going to say for you to double-check if you purchased them on folio. My numbers have never added up since I started trading. Whats worse is that with the new rounding method they use, my total payments are always off by a few cents.

What did they do with the banned members' notes in the accounts?  Did Prosper pay the users full value even for past due notes?  Or were the folks just prevented from buying new notes?
Prosper simply banned them from buying new notes, banned them from sending messages to other members or participating in the forum (which were features of the prosper platform at that time).  There were forums outside prosper where lenders communicated, so we all kept in touch.

Do you have proof of this?
There are three ways to make a living in this business: be first, be smarter, or cheat.

#### Fred93

• Hero Member
• Posts: 2221
##### Re: LC accounting problems
« Reply #9 on: April 24, 2014, 12:51:37 PM »
These are notes I bought on folio.

I'm a little late to the conversation, but I was going to say for you to double-check if you purchased them on folio.

Pretty hard to do.  I eventually found them in a folio statement from 2009.  I'm not going to check >1000 notes vs many years of folio statements.

What did they do with the banned members' notes in the accounts?  Did Prosper pay the users full value even for past due notes?  Or were the folks just prevented from buying new notes?
Prosper simply banned them from buying new notes, banned them from sending messages to other members or participating in the forum (which were features of the prosper platform at that time).  There were forums outside prosper where lenders communicated, so we all kept in touch.

Do you have proof of this?
[/quote]

I was there at the time, engaged in the conversation as it was happening.