Quote from: BTCJamSupport on September 28, 2015, 09:32:04 PM

Quote from: Bourbon44 on September 26, 2015, 07:26:09 AM

Quote from: Wattda on September 25, 2015, 10:45:46 PM

My issue is with your screening process on the borrowers you have listed for us. To me it appears if it is not just about collecting fees then your exposing us (the lenders) to these bad risks looks like you are not doing your do diligence.

The credit rating system over there is laughable. Case in point, take a look at this loan: https://btcjam.com/listings/49296-credit-card-debt---trusted-borrower-

A- Rating on the loan given by BTCJam let's go through the specifics:

late on 12 of 20 payments on loans prior
0 equity in the site - 100% debt, no investments in other listings
this loan is by a multiple larger than any of his previous loans
borrower takes out a loan for credit card debt but does not verify a credit card. hmm, i wonder why that would be?
borrower's prior loans are for repayment of student debt, fix transmission on a car, and security deposit on a rental unit.

think about that last item for a second. assuming he's telling the truth, we know:
1. he has additional debt on top of his monstrous credit card debt,
2. his car is a pos,
3. and he doesn't own real property.

what does that mean?

he's judgment proof. i.e. it means he's broke, he has no assets. so, in the event that he does likely default, and a borrower wishes to try and recoup, they'll get nowhere, because the guy, while he might not be a scammer, clearly does not have the means to pay these loans off. if it goes to court, there will likely be nothing to liquidate to pay off the loans because he owns no assets. thus, judgment proof. THIS IS NOT LEGAL ADVICE.

these are your A- listings at BTCJam folks.

so, if you're on the conservative auto invest, these are the types of loans that btcjam puts you in. loans that that no reputable financial agency or lender would consider "A-."

so what happens when btcjam negligently (although much more likely, recklessly, worst case, fraudulently) assigns these A- ratings to people who would otherwise get laughed out of a loan office or bank?

some poor sap, with no chance of ever seeing a dime of this money should this loan go into default, kicks the guy 18+BTC. don't get me wrong, i'm not about protecting people from themselves. and what is that about a fool and their money? my sympathy is muted. however, if jam is going to post these ratings, they owe it to the people who use the site to back these ratings with some sort of credible criteria. to echo the point above, it's like they're throwing darts at a wall, although cynics might think that they're purposefully pumping up these ratings to get people to invest because listings for borrowers has dropped off precipitously. clearly the 18+BTC sap was not expecting this payment to be late as evidenced by his numerous consecutive comments on the listing. maybe if jam had put some thought into their credit rating it could have given some users a second thought before investing so much, when they are clearly not in a position to invest such amounts in what in reality is a very risky loan to a very risky borrower. but as it stands, there is no counterbalance to some of these so called respected lenders who post crap on the site like they know a borrower is trustworthy because they spew BS about being late on payments better than some other late borrower.

bottom line, if for whatever reason, you do feel the need to invest in BTCJam, NEVER trust a rating on BTCJam. rating methodology has not been released and likely never will because, apparently, there is none. NEVER trust other investors who invest in these loans. they have just as much knowledge, and very possibly, less expertise than you, and the folks at jam, at assessing risk.

peace.

http://imgur.com/VwrOV6z

Where that data came from - https://btcjam.com/stats

Those are actual returns when following the credit ratings. We put a lot of thought into the credit rating, that is why the statistics speak for themselves. I don't know why anyone would make decisions based off other investors.

Every investor is different in the way they invest and their level of risk. I think its fair to say that every investor should do their own research. We never stated that you should follow the other investors on the site as many have different risk built into their strategy that wouldnt work for everyone. We also encourage diversification more so than throwing all your btc into one basket. I think you have a good idea of this given that you looked so hard into this borrower.

The reason AutoInvest exists is to throw very small amounts of BTC into very many listings, a set it and forget it approach for using the site. It's a good way to diversify across the marketplace at very small increments with loss/risk already built in.

Again, another straw man argument to justify an "A-" credit rating to one who shouldn't have one. Just because 10 shitty borrowers come on to your site, doesn't mean that because one is less shitty than the other, said borrower deserves an "A-" rating.

You don't argue the fact that the borrower is judgment proof, nor that he has failed to supply a credit card and is taking out debt specifically for that purpose - to pay off credit card debt. What kind of review do you do over there? Wake up.