CNBC has a reality show called American Greed. I confess I have never watched it but apparently it profiles people who are out to make a quick buck, often at the expense of others and often in illegal ways.
Last night they aired an episode about James Lull, who allegedly ran an investment scam in Hawaii that bilked 50 investors out of millions of dollars. I have no problem with the TV show, but they wrote this article yesterday “Private Lending: High Reward, Higher Risk?” that was essentially a promotion for the show. In this article they also discussed Prosper and p2p lending. You can find a link to this CNBC article on the American Greed website.
Making a Very Dubious Connection
When you read the article it starts off as your standard p2p lending piece about matchmaking borrowers and lenders. There are some quotes from Joseph Toms, the Chief Investment Officer from Prosper.com as well as an official at the Securities and Exchange Commission. But halfway through the article, the focus suddenly switches from p2p lending to the allegedly illegal activity of James Lull. The reporter then switches back to p2p lending, as if the two have similarities.
I found this incredible. To me, this is like doing an article on drug use in baseball and then including a piece about NFL quarterback Peyton Manning (I read somewhere he may have signed with the Broncos :-)). Sure it is all sports but one has very little to do with the other. And the casual reader may be left wondering if Peyton Manning uses performance-enhancing drugs. Of course I am not suggesting that here.
I spoke with Joseph Toms yesterday and he said he was stunned about the implied comparison. He happily agreed to an interview with CNBC – both Prosper and Lending Club do these kinds of interviews all the time – but he had no idea his comments would be used in a promotional piece for American Greed. In fact, as he recalled the depth of conversation he had with the reporter about the steps the company takes to provide full transparency of data, it seemed astonishing to him that an attempt at this connection would be made by such a reputable news organization.
If I was at Prosper I would be hopping mad. Suffice it to say that private lending of hundreds of thousands of dollars for real estate loans has as much in common with Prosper as Jose Canseco has with Peyton Manning.
I’ll admit skimming this piece – it’s “internet journalism”, written by a (likely unpaid, 12 year old) production assistant, after all – but my impression was that Prosper came out of it rather as an authority on doing things the right way… and that’s IF the reader didn’t tune out well before the odd connection to the TV show that they were trying to plug, which popped up in, like, what – paragraph 14? Ohwell… C’est la vie.
I read it more like PeerLend, the article seems to show Prosper as a regulated platform that would be less risky to invest in. They were shown as an example of something Positive.
It’s a newer industry, so the main players may not be as obvious to newcomers. And there will be some who start out with something like Prosper and want to get into higher risk / reward investing like real estate loan notes.
@Peerlend/@Brady, It was a positive article for Prosper if you read every word but not everyone will do that. And having Prosper even peripherally related to a show like American Greed rubbed me up the wrong way.
The CBS piece was ridiculous, considering CBS to be reputable is insane. Lol
They are serious, and stop calling them “Shirley”… couldn’t help it =)
@RealDeal, It was actually CNBC and whether or not they are reputable is certainly up for debate.
@Shawn, I was waiting for someone to chime in with the Airplane quote…
It looks like I picked the wrong week to stop sniffing glue.
I swear any idiot can write, but are they astute with finances? As this article shows most often no.