Effective February 16, 2016 Prosper [www.Prosper.com] one of the largest peer to peer marketplaces “increased its estimated loss rates and the price charged for risk on the loans originated through the platform.” Prosper and its competitors like Lending Club [www.lendingclub.com] are platforms that allow people to borrow money from investors. Prosper described peer-to-peer (P2P) lending as “a popular alternative to traditional loans and investing options. We cut out the middleman to connect people who need money with those who have money to invest.” Prosper has funded more than $ 5 billion in loans. Lending Club the largest P2P platform has funded over $15 billion in loans since it started.

Now, Prosper is seeing increased risk in its borrowers. While it is impossible to analyze the demographics of the borrowers on Prosper, if the platform is as wide as it claims to be then it may well be a sign that the American consumer is coming under financial strain. If there is increased risk involving the American consumer all industries but especially retail and non-essential service industries must be prepared for economic headwinds, as consumer spending is the largest driver of the American economy.