As observed in the prospers.org forums and blogged about by ZCommodore, Prosper has begun migrating collections accounts away from Penncro over to their newest collections agency, AmSher. Prosper had previously announced that this transition would be occurring in an e-mail to some lenders (not all received it) allowing them to opt-out of the transition:
We have received a number of complaints about the effectiveness of PennCro as a collection agency for Prosper loans. Over the past few months we have worked intensively with PennCro to improve their collections, however, the results were not to our expectations, and more importantly, to the expectations of Prosper lenders.
One common way to improve collections is to do “champion/challenger” testing, where some accounts are sent to one collection agency (the “champion”) and a similar number and quality of accounts are sent to another agency (the “challenger”). To date, Prosper does not have a large enough pool of delinquent accounts to conduct traditional champion/challenger testing on a side-by-side basis. However, a key aspect of champion/challenger is that the agency losing the challenge is penalized by accounts being removed from them.
In this instance, PennCro has not achieved our monthly production targets, and we are therefore recommending that accounts currently designated for PennCro be re-designated to AmSher. The compensation percentage paid to AmSher on these existing accounts will be the same as the percentage paid to PennCro. You may, however, elect to keep your delinquent accounts with PennCro.
If you wish your existing Notes to remain at PennCro, please send an email to firstname.lastname@example.org with subject of “Retain PennCro” by Monday, February 4, 2008, otherwise all your existing Notes designated for service by PennCro will be automatically transferred to AmSher and no further action is required. As usual, if there are multiple Lenders on a loan to a borrower, Prosper will use the selected collection agency common to the Lender or Lenders who have the greatest ownership interest in the loan. In the event of a tie among the Lenders as to their choice of a collection agency, the account will be re-designated to AmSher.
During the process, it looks like loans (even very late ones) that were in collections will drop out for a bit. The new collection agency will be assigned, and the game will be afoot once again. I, for one, welcome our new collections overlords.