I don't understand why would people choose to lend online to people they don't know anything about and even that without any collateral. If you lend here on the forum you'd actually get better returns and since there is strict policy of no collateral no loan you'll get better security. Lending money on these lending sites is almost same as throwing it away, you might as well donate it to someone needy or gamble with it and enjoy it atleast imho.
They don't give out collateral, but to get an A+ status, they do have to give out all their personal information...
In case of default, the information goes to an arbitrage company, and after a couple of months, the lender gets the borrower's private info (drivers licence, utility bill, paypal, linkedin, facebook, ebay,...).
So, in case of a small loan, the borrower can lose his reputation amongst his friends, for a big loan, he risks being sued...
Offcourse, the chance of being sued is pretty small, so it's a risk some people are seemingly willing to take.
That all sounds good but do you thing people who take small loans will worry about their online reputation and that is if we believe that they are providing all the legit info, which I doubt they are. And for the bigger loans, even if you find out all the info you need to sue someone, would you take the hassle and funds to sue someone in another country? The costs of doing that might be more than the loaned amount. IMHO it's quite foolish to give loans online without collateral, even with collateral they're not fully safe as the collateral might lose value.
