Complaint Review: Prosper - Internet

I am also a reservist with the Navy and was recently mobilized. I have written a letter to my various creditors, and Prosper Marketplace is one of them. There is no special section on their website dedicated to servicemembers seeking relief under the Servicemember's Civil Relief Act. So I simply sent an email to customer service. I have sent emails to my other creditors that same day (or used their special SCRA forms through their respective websites).

This included companies like Wells Fargo, American Express, USAA, Paypal (which is actually Synchrony Bank out of Utah). Of all these companies, Prosper was the last to respond with an email or notice to me. They asked for a copy of my orders, pretty straightforward. I sent this to them. A few hours later, the loan was adjusted. The payment installments are much smaller (I have two personal loans through them). In comparison, American Express was first to get back to me, but their response was that it could take up to 60 days to process and verify the information.

Every single one of these companies responded, and I consider them all military friendly. But of all of them, Prosper took action the quickest.

Thanks for reading!

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I can understand your confusion as an observer if you are not familiar with what the SCRA is and its purpose and how Reservists or regular active duty members enter service. I will explain the nuts and bolts of it, and I would also recommend using a web search to learn the details. You will see the simplicity of it, and perhaps not accuse me of not being above board once you know what it is.

First, there is no loophole. The SCRA is (thankfully) a very simple process, one that is very black and white. Going on active duty is a well documented process. The documentation that establishes your term of duty is well defined, even for new regular active duty servicemembers. This important piece of paperwork details the start and end date of your term of service (can be as little as one day, or up to 365 days, and then another set of orders will be cut for every additional 365 days thereafter, typically revolving around fisal years) for Reservists. For regular active duty it will define your term in years. This documentation will show where you are working, the type of duty, and sometimes will show the accounting string funding your orders.

Second, the SCRA makes no distinction between types of call ups or activations. There is no spirit of the law being violated here, as this same law protects regular active duty members who join the service for the first time as well. The law is simple: all loans incurred before the active duty date must be reduced to 6% or lower for the duration of the orders. Lenders are under no obligation to reduce it below 6% (although some do), and the interest rate returns to its original state when the active duty period is done; the reduction is not permanent. The lender is not required to reduce anything without legitimate documenation in hand, and rightfully so. Thus, the loan could originate the day prior to activation - it doesn't matter. Mine originated and was funded 30 days prior to the start of my orders. Cut and dry. Every other lender responded promptly in writing and followed the SCRA to the letter.

And sorry, I do not need to explain the mele of my current active duty period to you - a stranger. But to give you a taste of what many Reservists deal with, my particular service moves so slow I didn't have orders until the day I arrived (which left my employer in a lurch; talk about awkward!). Worse yet, they screwed up every paycheck until 1 Nov and every travel reimbursement (I'm still owed $$$ for our of pocket expenses) because they didn't know what they wanted me to do and how long they wanted me on duty... but that's a different issue and not Prosper's fault. I know of a unit that will be deployed soon, but will need volunteers to flesh out their numbers. Based on your logic, anyone who volunteers and invokes SCRA should be denied. Again, the only litmus test is 1) Date of loan origination, and 2) Start date of active duty period. Period.

Third, I cannot use the legal services provided by the military until all efforts to manage the issue with the lender have been exhausted. It would be ludicrous to go into a JAG office before one full billing cycle is complete. Because yes, even I know finding a fix for a problem can take time. But now its at 90+ days, and Prosper's communications and responses have gone south.

So, for the SCRA which, contrary to your opinion, certainly exists (again, look it up, there are other protections included in the SCRA other than protection from lenders)... its been slightly more than 90 days - wouldn't you say nearly 3-4 months is a reasonable timeframe to seek concrete resolution through other more significant means? Consider that each time I have received written communication I am given one negative story, yet when I'm on the phone with a representative I'm given an exact opposite, with all promises guilded in gold and assurances that my issue will be fixed? DOn't you think this is all an unnecessary up-and-down process? And what would you do - go to a lawyer after the first 2 weeks? C'mon, man. From your rebuttal you seem like a logical thinker and I believe that you would check every box and build a case before bringing your timeline of communication, documentation, etc to someone for legal support. In addition, servicemembers are advised to use our legal support resources for SCRA issues. This is not a grand idea that I have recklessly crafted - thats the course of action dictated by the JAG. If I cannot reach a resolution using JAG resources, then servicemembers are advised to route a formal complaint through the Dept of Labor in DC. This isn't the first time a servicemember has had an issue like mine with a lender, and I likely will not be the last.

Okay so I hope that you are on the "up and up" and telling the entire story.  However, the timing of this seems quite interesting.

You state the SCRA provides relief if a Serviceman goes on "active" duty, which is correct at a high level.  But are you going with the "spirit" of the law or did you find a "loophole" that you are trying to take advantage of.

The key comes down to EXACT dates.  That is did you apply for this loan AFTER the date you were notified you were going to go on active duty.  If you applied for it AFTER you were notified, you are techncially still correct that this loan could qualify as you were not on active duty yet.  However, in the "spirit" of the law it was to help people for unforseen circumstances of being called up.  Yet, in this case you would know regardless of what interest rate you got you would be "entitled" to a 6% rate in just a few weeks.

Now, the second part of this is what is the date the SCRA uses?  Does it use the date you applied, date it was approved, date you signed any final agreement(s), or the date you actually got the funds in your account.   Again since we are talking at most an 8 week span the EXACT dates matter.  If for example you applied before you went on active duty, but were approved and got the funds after..one could see that you no longer qualify under the SCRA because you got the funds afterwards.

Also, this happened 4 months ago.  If you are truly entitled to free legal services(which you are)...why haven't you taken them.  Social Media may be a powerful tool, but it can't circumvent laws or make laws where they don't exist.