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Social Finance Deadbeats: Worse Than a Photo on the Wall
When I was a little kid growing up on the mean streets of Brooklyn, the corner candy store had a big sign with photos of anyone who stole from them. Then as I grew up, the video store had a sign with the bad checks they received with the name of the person in large type for all of the customers to see. And we all remember the Seinfeld episode all about a bad check to a grocer.
So what happens today when a person gets stiffed on a social finance site such as Prosper, Zopa or Lending Club? You guessed it – they blog about it! And if the blog is popular, it will be worse than a bad check posted on a wall. (of course if the person is a scammer, they won’t care)
Yesterday Andy Swan posted about just such a deadbeat. He notes:
I loaned the guy $500 through Prosper. Apparently he is involved in some type of credit crunch situation. Probably some type of adjustable rate mortgage that just rolled over to 24% APR on his delinquent ass.
Now he’s stiffing me and everyone else on Prosper that fell for his enthusiasm and sparkling smile. I just hope he’s driving around in a sweet ride with a hot girl and the money’s not rotting away in some casino coffers right now.
In hindsight, the “endorsements” from his friends should have been a tip off.
You can click over to the profile and photo of the man called "Slim123". I am confident we will see more of public humiliation payment tactics as social finance and social lending explodes.
For more information about social lending and social finance, check out our 3-part series.
I think that’s exactly where a lot of this stuff belongs. Social stigma and shame are great motivators in a lot of cases, and it leaves legislation and regulation out of the mix so there can actually be new services like Prosper and the like.
My company borrowed $25,000 through Prosper, and I believe we just paid it all back. It’s a great service.
We did the same thing on our company (MyFreeImplants.com) blog when we got hit by a loser/scammer that was just trying to scam a few ladies out of some pics by using a stolen credit card.
A filty post. Low down dirty scum.
The interesting thing that I’ve found after having worked on several startups is that there is a lot less fraud and chargebacks when they are actually interacting online with each other like in these social network situations. Especially in our case where you are donating money to a specific person.
I guess it’s similar to real life… it’s gotta be a lot more scary and difficult to walk into a store with a stolen card than to type in the stolen digits on a computer terminal.
Reminds me of that story about how people will generally tip more if there is a photo of a persons eyes near the tip jar.