P2P lender Prosper in firefighting mode following botched platform switch
25 May 2010 | 8013 views | 0
US peer-to-peer lender Prosper is still struggling to reconcile user accounts three weeks after botching a major upgrade to a new loan servicing platform.
The switchover to the new platform was a major project that involved the integration of more than 2 million loan based transactions.
What were initially reported as a number of anomalies and discrepancies after the new platform went live in early May have escalated into a full-time troubleshooting operation, with users unable to access their accounts online and incorrect disbursements made to some to some lenders.
In a blog update to customers, Prosper apologises for the "frustration and inconvenience many borrowers and lenders have experienced".
Most of the problems related to the interface between the Prosper Web site and the new loan servicing platform, which resulted in loan data being inaccurately displayed to users accessing their accounts and, "in a limited number of cases" triggering incorrect payment disbursements to lenders. Prosper says these issues have been resolved and corrections will be made to users' accounts by the end of the next week.
Loan performance data, which is used by investors to determine what kind of loans to take out and analysts to determine the company's growth in loan origination, has been offline since the switch and is unlikely to be restored until early June says the company.
The fiasco hit just two weeks after the company raised $14.7 million in new funding from investors. It follows a difficult two years for Prosper, which only resumed lending last July after being forced to close its doors to new loans the previous November in order to register its business with the SEC.