[EDU] EXERCISE CAUTION WHEN LENDING TO USERS!

[DiamondCardz]

There has been a massive influx of new users requesting loans lately, and as a result, lots of people being scammed. It seems that Tomatocage's thread isn't enough, so let me just say this:

Do not loan to new users unless you can get collateral OR if they are very trusted due to high-risk services they provide (examples: gambling sites, currency exchange sites), because the chances of them defaulting/scamming are 90%+.

What defines a "new" user?

• Anyone who is a Jr. Member
• Anyone who has registered <1 month ago
• Anyone with less than 100 posts
• Anyone whose posts mainly consist of spam and/or meaningless posts such as "+1" and "nice post"
• Anyone who refuses to provide collateral or ID for large loans (a general guideline is >0.1 BTC) or states that they can not give it may not be new, but is untrustworthy.
• Anyone who you think is a scammer, because in the Lending sub-forum, 90% of the time, you're probably right.

There has been an influx of people giving loans as high as .85 BTC (remember, that's $100! Edit: At $1000 (per BTC), that's $850, at $500, that's $425.) to newbies who have just registered, and shortly after been stabbed in the back. Don't do it.

What is good collateral for a loan? (From best to worst)

• #1: Alternate stable and well acknowledged cryptocurrencies
• #2: Securities and shares such as TAT.ASICMINER
• #3: Anything that can be traded in somewhere for a secure cash/Bitcoin value quickly

• #4: Physical items such as an iPad

Or, if you can not get collateral:

• Identification that is clear, verified and can be linked to you and trace you Note: This has been less and less commonly accepted recently due to the relative difficulty of doing anything productive with a scammer's ID.

If someone is requesting a loan and meets any of the "new" user criteria, do not loan to them unless you can get collateral. For your own sake.

Also: Invaluable advice from Boelens on bad collateral:

Alright, so, many people have been asking for loans, providing completely no collateral, or not knowing what collateral is. I saw Nimda make a small post on it in a loan topic, but figured I've seen this having explained so many times I figured I'd make a quick topic on it.

What does NOT count as good collateral:

• Your accounts on anything like Steam, or any other game site. Why? First of all, it's an account, they're not that easy to sell and while you may have 1,000$ in value on there it is not worth 1,000$. Also, you still most likely have e-mail access to it, and you could go to support saying you got hacked. Also, most Terms of Services do not allow the trading of accounts. This is a bad way to provide collateral and I doubt anyone would accept this.
• ID card, or any other personal identification. This is great information to supply upon getting a loan, but this is NOT collateral. Often people do offer it as collateral but generally it is not worth much, because the worst you could do is find personal information and post it online, which is nasty, but some people won't mind, or use a fake ID.

Tell me if I missed anything. Just figured this is a quick good small guideline.

To add to this: Gift Cards are also terrible collateral. Not only are they hard to sell for their full value (you'll probably get more like 50-80%), like with all GC sales, they can be fraudulently purchased meaning that you either have the GC balance zeroed out before you can use it, or you use it and then get left holding the bag when the police arrive.

22nd of December, 2014: Another extension onto this:

Inspite of the best efforts of the lenders and trusted members, there has been a spate of scams. To prevent that use the trust rating wisely.

[1] When giving out a collateral free loan, give a neutral feedback mentioning the loan.
[2] When you receive a loan request, check the trust rating, click on untrusted feedback, and see if there are any ratings which may be of concern.

It should help to detect loanees who take out multiple loans. This seems to be the recent trend these days.
Warnings may not be given as negative feedback but as neutral, so it will not show up unless you go into their trust rating.

The trust system is invaluable to prevent against scammers. Members may be old but have suspicious trust history, and their trust can help you make a calculated decision.

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[Vod]

What is good collateral for a loan?

• Identification that is clear, verified and can be linked to you and trace you

ID is not acceptable collateral for a loan.

[John (John K.)]

Stickied. With the recent wave of fresh newbies begging to be scammed so that they can cry later in the scammer accusation subforums, warnings like this is greatly appreciated. (though I would bet most newbies do not read stickies....)

[TradeFortress]

Stickied. With the recent wave of fresh newbies begging to be scammed so that they can cry later in the scammer accusation subforums, warnings like this is greatly appreciated. (though I would bet most newbies do not read stickies....)

Hey, newbies lending to newbies tend to have a 80% success rate

[DiamondCardz]

What is good collateral for a loan?

• Identification that is clear, verified and can be linked to you and trace you

ID is not acceptable collateral for a loan.

If it can be used to trace someone back to their house or such, then I would consider it acceptable. Proof of ID, not the actual physical ID

[Vod]

What is good collateral for a loan?

• Identification that is clear, verified and can be linked to you and trace you

ID is not acceptable collateral for a loan.

If it can be used to trace someone back to their house or such, then I would consider it acceptable. Proof of ID, not the actual physical ID

It's important we use the same definition, so I look to the dictionary which says collateral is security for a loan.

While identification helps prove a person is who he/she says, it does NOTHING in helping secure the funds.

You don't want to fool new users into thinking it's safe to lend to someone because they know who they are - its NOT. 

Collateral is something to fall back on - something to sell - should the borrower not repay his debt.  ID cannot help with that.

[DiamondCardz]

What is good collateral for a loan?

• Identification that is clear, verified and can be linked to you and trace you

ID is not acceptable collateral for a loan.

If it can be used to trace someone back to their house or such, then I would consider it acceptable. Proof of ID, not the actual physical ID

It's important we use the same definition, so I look to the dictionary which says collateral is security for a loan.

While identification helps prove a person is who he/she says, it does NOTHING in helping secure the funds.

You don't want to fool new users into thinking it's safe to lend to someone because they know who they are - its NOT. 

Collateral is something to fall back on - something to sell - should the borrower not repay his debt.  ID cannot help with that.

Re-defined in the OP.

[bernard75]

What defines a "new" user?

• Anyone who is a Jr. Member
• Anyone with less than 100 posts

Arent those directly connected to each other?
The new limits and activity help a bit, but i still see 1 day old Hero Members.

[Kouye]

Easiest way to spot a scammer is unfortunately listed 4th in Diamond's post.

• Anyone whose posts mainly consist of spam and/or meaningless posts such as "+1" and "nice post"

Just check the post history. No scammer will take time to make decent posts before he can reap off some newbie.

And go to the bottom of it.
Get used to the user written style from the earliest post, then compare it to the one where he asks for a loan.
This protects you against bought accounts, too.

[DiamondCardz]

What defines a "new" user?

• Anyone who is a Jr. Member
• Anyone with less than 100 posts

Arent those directly connected to each other?
The new limits and activity help a bit, but i still see 1 day old Hero Members.

Uh, that's a lie.

The new limits mean you can't be a Full Member for 1 month, you can't be a Sr. Member for 6 months, and you can't be a Hero Member for 1 year.

[cornish_will]

Although i respect diamondcardz advice on lending to new users i think some advice is bit short sighted.

Collateral is fine if someone lives in travel distance but not really if they live abroad.
Also members new and old maybe cautious sending collateral and/or id to members due to bening scammed themselves, not because they r scammers.


Newbies can bé as wise as hero members remember just cause they r new here doesnt mean they are new to lending or bitcoins.

Ultimately ID is better than collateral for borrowers and lenders should never lend more than they could afford to lose in event a user defaults.

There are good rules for lending should i think could bé usul here ;-)

[Sindelar1938]

Excellent advice

Thanks for taking the time to put together

[malevolent]

Collateral is fine if someone lives in travel distance but not really if they live abroad.
Also members new and old maybe cautious sending collateral and/or id to members due to bening scammed themselves, not because they r scammers.
Ultimately ID is better than collateral for borrowers and lenders should never lend more than they could afford to lose in event a user defaults.

Collateral can be mailed and insured.
Collateral can be in a digital form, e.g. alternate cryptocurrencies can be used as collateral.
IDs aren't worth much because they are easy to obtain (by forging, stealing, "borrowing" from someone, or they can be simply bought online).

Not to mention that even if it is possible to ascertain that someone's ID is really genuine, in case of a default it may still be very difficult or impossible (expensive and time-consuming) to recover the money (especially when dealing with someone from abroad).

[Kluge]

Stephanie: It's like when you make a loan to your cousin. Don't loan them anything that you wouldn't consider a gift.

Andreas: Well, I can always track my cousin down and kick him in the nuts.

Stephanie: That's true. You can't do that with a Bitcoin address.

http://letstalkbitcoin.com/e18-its-not-that-simple/#.UodX2flusxk

[Ashbite]

Good thread, very informative and well written.
We need to make a scam free environement. (What is never gonna happen)
So try to use collateral or some form of escrow.(unless trusted)

[Muhammed Zakir]

We need to make a scam free environement. (What is never gonna happen)

A scam free environment can only happen in our dreams!
Scam is like a part of everything. Coin have two sides and it can't exist only with 1 side. Like that for everything there will be scams. Anyway I like to see a scam free environment.

Kindly,
        Muhammed Zakhir

[bigasic]

What is good collateral for a loan?

• Identification that is clear, verified and can be linked to you and trace you

ID is not acceptable collateral for a loan.

Unless the id is made out of solid gold or silver

[Kluge]

Maybe it would be useful to find a real sociopathic scammer and observe what he did (or does?). I don't think I've ever met one (except maybe a wallet-stealing plumber who stole a wallet when daughter was a newborn, a bit before Christmas), and I only happened to "observe" one by looking through a bunch of documents wife had on him while dating.

He was unbelievably resourceful and brazen, making all his own ID, forming dozens of LLCs, and having more paperwork, legit and otherwise, than the VA. Guy (rather, his LLCs) scammed title transfers and "legally" owned dozens of cars. Almost wish I knew him to learn about what to look out for. Almost.

On that note, titles as collateral are a terrifying proposition, even if the person's relatively close (which in this subforum means <300mi away). I took a motorcycle on collateral on one of my first p2p loans -- I'd never do that again, even though it turned out well and he even repaid early. It brings into question whether or not "smart titles" would be good collateral. Depending on how the privkey was acquired, law might still find the current controller to've acquired it illegitimately and so the collateral could be worthless. To a far lesser extent right now, this could extend to cryptos and digital shares/bonds/whatever-they're-being-called-now, but I've never heard of a case, there. I don't actually recall any crypto thief being caught, yet. I guess Pirate & Karpeles count, but they were record-setters.

[topman21]

Maybe it would be useful to find a real sociopathic scammer and observe what he did (or does?). I don't think I've ever met one (except maybe a wallet-stealing plumber who stole a wallet when daughter was a newborn, a bit before Christmas), and I only happened to "observe" one by looking through a bunch of documents wife had on him while dating.

He was unbelievably resourceful and brazen, making all his own ID, forming dozens of LLCs, and having more paperwork, legit and otherwise, than the VA. Guy (rather, his LLCs) scammed title transfers and "legally" owned dozens of cars. Almost wish I knew him to learn about what to look out for. Almost.

On that note, titles as collateral are a terrifying proposition, even if the person's relatively close (which in this subforum means <300mi away). I took a motorcycle on collateral on one of my first p2p loans -- I'd never do that again, even though it turned out well and he even repaid early. It brings into question whether or not "smart titles" would be good collateral. Depending on how the privkey was acquired, law might still find the current controller to've acquired it illegitimately and so the collateral could be worthless. To a far lesser extent right now, this could extend to cryptos and digital shares/bonds/whatever-they're-being-called-now, but I've never heard of a case, there. I don't actually recall any crypto thief being caught, yet. I guess Pirate & Karpeles count, but they were record-setters.

Useful information and feature to improve and develop our private business here. Nice...

[garyramsey389]

There has been a massive influx of new users requesting loans lately, and as a result, lots of people being scammed. It seems that Tomatocage's thread isn't enough, so let me just say this:

Do not loan to new users unless you can get collateral OR if they are very trusted due to high-risk services they provide (examples: gambling sites, currency exchange sites), because the chances of them defaulting/scamming are 90%+.

What defines a "new" user?

• Anyone who is a Jr. Member
• Anyone who has registered <1 month ago
• Anyone with less than 100 posts
• Anyone whose posts mainly consist of spam and/or meaningless posts such as "+1" and "nice post"
• Anyone who refuses to provide collateral or ID for large loans (a general guideline is >0.1 BTC) or states that they can not give it may not be new, but is untrustworthy.
• Anyone who you think is a scammer, because in the Lending sub-forum, 90% of the time, you're probably right.

There has been an influx of people giving loans as high as .85 BTC (remember, that's $100! Edit: At $1000 (per BTC), that's $850, at $500, that's $425.) to newbies who have just registered, and shortly after been stabbed in the back. Don't do it.

What is good collateral for a loan? (From best to worst)

• #1: Alternate stable and well acknowledged cryptocurrencies
• #2: Securities and shares such as TAT.ASICMINER
• #3: Anything that can be traded in somewhere for a secure cash/Bitcoin value quickly

• #4: Physical items such as an iPad

Or, if you can not get collateral:

• Identification that is clear, verified and can be linked to you and trace you Note: This has been less and less commonly accepted recently due to the relative difficulty of doing anything productive with a scammer's ID.

If someone is requesting a loan and meets any of the "new" user criteria, do not loan to them unless you can get collateral. For your own sake.

Also: Invaluable advice from Boelens on bad collateral:

Alright, so, many people have been asking for loans, providing completely no collateral, or not knowing what collateral is. I saw Nimda make a small post on it in a loan topic, but figured I've seen this having explained so many times I figured I'd make a quick topic on it.

What does NOT count as good collateral:

• Your accounts on anything like Steam, or any other game site. Why? First of all, it's an account, they're not that easy to sell and while you may have 1,000$ in value on there it is not worth 1,000$. Also, you still most likely have e-mail access to it, and you could go to support saying you got hacked. Also, most Terms of Services do not allow the trading of accounts. This is a bad way to provide collateral and I doubt anyone would accept this.
• ID card, or any other personal identification. This is great information to supply upon getting a loan, but this is NOT collateral. Often people do offer it as collateral but generally it is not worth much, because the worst you could do is find personal information and post it online, which is nasty, but some people won't mind, or use a fake ID.

Tell me if I missed anything. Just figured this is a quick good small guideline.

To add to this: Gift Cards are also terrible collateral. Not only are they hard to sell for their full value (you'll probably get more like 50-80%), like with all GC sales, they can be fraudulently purchased meaning that you either have the GC balance zeroed out before you can use it, or you use it and then get left holding the bag when the police investigate.

is it id only and you can have loans?

[DiamondCardz]

Quoted this:

Inspite of the best efforts of the lenders and trusted members, there has been a spate of scams. To prevent that use the trust rating wisely.

[1] When giving out a collateral free loan, give a neutral feedback mentioning the loan.
[2] When you receive a loan request, check the trust rating, click on untrusted feedback, and see if there are any ratings which may be of concern.

It should help to detect loanees who take out multiple loans. This seems to be the recent trend these days.
Warnings may not be given as negative feedback but as neutral, so it will not show up unless you go into their trust rating.

And re-titled the thread to make it a tad more intimidating, so that people actually read it.

[bitkilo]

Because your thread is a sticky so lots of lender/borrowers read it i thought it may be helpfuf to others if you add my suggestion regarding the lender leaving netural trust on the loanee's trust profile once a loan has been taken and only removed when the loan is fully repaied.
This would be another way someone could check if the member has a outstanding loan before buying their account, lending them BTC  or just conducting any business with them.

You can see an example of what i am talking about on my profile that was left by tm2013.
Please let me know what you think of this idea.
Thanks.

Edit: i just seen the post above mine quoted in the OP, the leaving of netural trust by a lender needs to be made clearer i think, no many lenders i have spoken with know they could do that.

[Muhammed Zakir]

@DiamondCardz: First of all, thank you for putting effort on creating this thread! Can you make a note about 'Steam' saying that "if the borrower moves the game or weapons to lenders or a trusted person's wallet, it can be used as collateral".

P.S. Can you also tell the lenders to check their posts and also to ask a signed message from one of their old address(1-2 months)?

   -MZ

[DiamondCardz]

@DiamondCardz: First of all, thank you for putting effort on creating this thread! Can you make a note about 'Steam' saying that "if the borrower moves the game or weapons to lenders or a trusted person's wallet, it can be used as collateral".

I'm not adding that simply due to credit card fraud.

[UserVVIP]

The thing is, if you really need money to pay your bills or whatnot, get a loan from the bank.

Bitcoin is not big enough yet to have service providers accept it as payment.

[erickimani]

There is no way to be sure if someone is genuine. don't depend on the ID because it might be fake. sometimes we just need to trust someone blindly hoping for the best.

[DrthCaedus]

Although i respect diamondcardz advice on lending to new users i think some advice is bit short sighted.

Collateral is fine if someone lives in travel distance but not really if they live abroad.
Also members new and old maybe cautious sending collateral and/or id to members due to bening scammed themselves, not because they r scammers.


Newbies can bé as wise as hero members remember just cause they r new here doesnt mean they are new to lending or bitcoins.

Ultimately ID is better than collateral for borrowers and lenders should never lend more than they could afford to lose in event a user defaults.

There are good rules for lending should i think could bé usul here ;-)

So I know this is almost 3 years old, but I agree with this 100%. I'm new to this particular community, but I have been around bitcoins for over 2 years. I decided that this would be a great place to begin getting more involved. I can't wait to get more involved in this particular community.