Wednesday, January 30, 2008

Junk Mail Bruhaha

My Microfinance has started a bit of a controversy by claiming that Prosper is selling their personal information to direct-mail marketing organizations.

So recently I’ve had a HUGE surge in junk mail, junk email and junk phone calls from people in the past few months asking for a fictitious company (FANAFI Foundation). When I asked one of them today where they got my business name (FANAFI Foundation) they politely told me it was SOLD to them by Prosper Marketplace, Inc.!

Prosper's Chief Marketing Officer Catherine Muriel wasted no time responding. She quickly denied the charge and promised to investigate:

Prosper would like to confirm that under no circumstances have we or do we ever sell our member names or group names for marketing purposes. How this company - Direct Capital Corp. - obtained the FANAFI name and contact information is something we are looking into and will investigate fully, however, the information was not originated from Prosper.
Catherine Muriel - CMO - Prosper Marketplace, Inc.

The story has captured some imaginations because of Prosper's personally identifiable information crusades. After all, there's nothing more satisfying than catching a corporation acting hypocritical. I was initially skeptical because I could not directly connect FANAFI with a Prosper login in a meaningful way. Traveler505 put together a more well thought out commentary on the .org:

I had seen this earlier, but hesitated before posting a link because, quite frankly, the whole thing doesn't make a lot of sense to me.

AFAIK, the only context in which Prosper would have "FANAFI Foundation" in its member database is that it was Jeff's Prosper ID from March 7, 2007, to January 11, 2008. (He also used it for blogging and website purposes, but that wouldn't normally become part of his Prosper member data.) It's possible that his group was named FANAFI Foundation (as opposed to FANAFI or FANAFI Financial) at some point, but I don't recall it (and there is no historical record of group name changes).

Jeff is a borrower, as well as a lender and GL, so it's conceivable - though highly unlikely, since I doubt that FANAFI Foundation has generated much income - that he listed FANAFI Foundation as his employer when he listed. (He didn't list as self-employed on the second listing.)

If Prosper were to sell member data for marketing purposes, it's hard to believe that they would include User IDs in the database, or that the buyers would want that data, IMO. It just doesn't strike me as an industry norm. This is particularly true, I would think, if the data was filtered through a third party (Experian, as Jeff alleges); I would expect that even if Prosper didn't adhere to list management industry norms, Experian would.

Experian is certainly in the data marketing business. I don't know if they serve as list broker for companies like Prosper, as opposed to collecting and selling their own data. Because Jeff is a borrower, Prosper would have reported his payment history to Experian and, unless he opted out, Experian might sell that data (in some form) for marketing purposes. But the data uploaded from Prosper, AFAIK, would not have included his User ID; the only Experian field I can think of where that could be provided is employer, and, again, I doubt that Jeff claimed to be employed by "FANAFI Foundation."

Like Jeff, I'm a borrower, lender, and GL, but I haven't gotten any junk (mail/phone/email) referencing Traveler505 or Comprehensive Borrower Services. I doubt that anyone is manually cleaning the lists to differentiate between User IDs that sound like a business and those that don't. (However, my main contact is a cell phone, which telemarketers tend not to call, and my other numbers almost always go to voicemail when the Caller ID suggests telemarketer. But that leaves a physical address and unfiltered email mailbox which haven't gotten any junk like he describes.)

Color me confused. I hope that some additional information surfaces about this report.

I'll be watching as more develops, though I'm hoping it is a bit of confusion and not Prosper acting poorly.

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