Account as collateral - How it reflects the forum rule?

[mdayonliner]

On the lending section I have seen lenders are offering accounts as collateral, I did the same on my lending service topic following their examples. However, I need a bit of clear understanding.

When a lender ask an account as a collateral for the loan then how does the deal work?

• a) Do the lender takes control of the account of borrower before lending the loan? or
• b) It's just a written contract that the account is the collateral and if the borrower default the loan then the lender will ask for the account credentials. (this will be a stupid move IMO, the borrower can deny to give the credentials later)
  

Let's say the answer is "a". In that case - since account selling/buying is prohibited or technically speaking the DTs don't like it - so, if a borrower default a loan and the lender have his/her account in control then how would the lender use the account?

[hilariousandco]

There are no forum rules on this. You can accept whatever you want as collateral and is entirely up to you to secure.

[Chaki_]

I think Jr. Member account is not accepted.

I think High Ranking account would be best as collateral to hold for people who will avail your loan and you don't know them well...

[TheUltraElite]

-snipping this because the answer is given below in total-
Let's say the answer is "a". In that case - since account selling/buying is prohibited or technically speaking the DTs don't like it - so, if a borrower default a loan and the lender have his/her account in control then how would the lender use the account?

Generally the lender and the borrower contact on another messaging system like telegram and then the borrower gives the lender the ID and password. But please read this :

Account are not accepted as collateral. Period.
Now a person who has a high reputation in the forum can offer their account as collateral just as a sort of security for the lender in order to secure a loan. Of course that account is having a value because of the reputation. Again this reputation is subjective and thus one should not take for granted that a reputed member will always return a loan in time.

What can a lender do with the account in case of default?
Selling accounts is looked down upon and if that account is sold, then possibly the lender will be a interrogated and marked red in case evidence stacks up on them having sold their account (because they were in possession of that account post-loan default)
In other words lets just keep it simple and short : Do no accept accounts as collateral. (in future)

[LoyceMobile]

Think of it this way: of someone is willing to give his account as collateral, the account and reputation don't mean anything to him.
I wouldn't trust anyone with my account.

[Quickseller]

Think of it this way: of someone is willing to give his account as collateral, the account and reputation don't mean anything to him.

I would disagree with this logic. 

If someone needs $100 today, and is expecting to receive $120 in two weeks, but no lender is willing to lend more than $20 based on their word, this person will either be unable to meet their $100 need, or will need to give the lender a valuable asset to hold (aka collateral) while the loan is outstanding. This person can either post/browse from an alternate account while the loan is outstanding, or take a two week break from posting until the loan is repaid.

[mdayonliner]

There are no forum rules on this. You can accept whatever you want as collateral and is entirely up to you to secure.

I understand that part however my question was about the afterwards, precisely if they default... This become an alt of mine? Let's say I will not sale it since selling accounts are unofficially (I guess) prohibited.

I wouldn't trust anyone with my account.

For me it depends. If someone is from the family like brother or wife then I will but with no outsider for sure.

Account are not accepted as collateral. Period.

This does not match with hilariousandco's statement.

In other words lets just keep it simple and short : Do no accept accounts as collateral. (in future)

This is really a safe zone so far however it really does not work sometimes. Not all people have alts or other stuffs as collateral.

~

I kinda agree with Quickseller. When someone desperately needs money to resolve something - everything else is secondary then.

[Welsh]

I understand that part however my question was about the afterwards, precisely if they default... This become an alt of mine? Let's say I will not sale it since selling accounts are unofficially (I guess) prohibited.

Probably. If it's provable that the account has changed hands then any rules that you break will likely have an effect on that. Your unlikely to get an official answer on this though. Probably case by case.

[AdolfinWolf]

There are no forum rules on this. You can accept whatever you want as collateral and is entirely up to you to secure.

I understand that part however my question was about the afterwards, precisely if they default... This become an alt of mine? Let's say I will not sale it since selling accounts are unofficially (I guess) prohibited.

Well, yes. If someone defaults on their loan and has no interest in paying it back it becomes yours for taking.

Let's say I will not sale it since selling accounts are unofficially (I guess) prohibited.

I'm not too sure how frowned upon it is to sell accounts that you've received through lending as collateral. I've seen quite a few high-trusted members in the past that sold accounts that they received through lending w/out any repercussions.

[Welsh]

I'm not too sure how frowned upon it is to sell accounts that you've received through lending as collateral. I've seen quite a few high-trusted members in the past that sold accounts that they received through lending w/out any repercussions.

Yeah, a few years ago it was kind of accepted. At least it wasn't enforced like it was today. However, these days I think users have become aware of the problems with selling these accounts, and are now actively fighting against it via the trust system. A few high ranked members have been tagged recently even when selling accounts received through collateral.

[aoluain]

My thought on offering an account as collateral is that it could be looked on as
account selling by stealth.

If I really want to sell my account I could apply for a loan and offer the account
as collateral and just not pay the loan back so in effect I have sold my account!

On the issue of selling an account received as collateral, I dont have an issue.
I these transactions are allowed the lender has to retrieve their funds and the
buyer of the account can potentially rank up.

[pugman]

Account are not accepted as collateral. Period.

So long as this forum allows free speech and has no rules against such, account sales, or accepting accounts as collateral is allowed. What the community thinks is however different, and subjective.

I understand that part however my question was about the afterwards, precisely if they default... This become an alt of mine? Let's say I will not sale it since selling accounts are unofficially (I guess) prohibited.

Yes, they become an alt.
Example: Tavos was an alt of DarkStar_ back in 2016, and is no longer his alt, as the account was sold.
Refer: https://bitcointalk.org/index.php?action=trust;u=507936

In sent feedback.

[Welsh]

My thought on offering an account as collateral is that it could be looked on as
account selling by stealth.

If I really want to sell my account I could apply for a loan and offer the account
as collateral and just not pay the loan back so in effect I have sold my account!

On the issue of selling an account received as collateral, I dont have an issue.
I these transactions are allowed the lender has to retrieve their funds and the
buyer of the account can potentially rank up.

This has happened in the past no doubt in my mind. Even, though I don't have any specific threads to pull up this is definitely still going on. In fact Vod, and a few others have been trying to protect against this for as long as I remember now. 

[TheUltraElite]

This has happened in the past no doubt in my mind. Even, though I don't have any specific threads to pull up this is definitely still going on. In fact Vod, and a few others have been trying to protect against this for as long as I remember now.  

Exactly the reason why I discouraged @mdayonliner from accepting accounts as collateral is that DT is keeping an eye out for accounts being sold. Of course the lender has to cut his/her loss on a default and hence they would try to use that account to get some financial gain,, either by doing enrolling it in some campaigns (farming of account) or selling it.

There is no guarantee that the borrower will come back if they were actually going to sell the account in the pretext of getting a loan in the first place.

Both of these are now discouraged in the forum and thus I was doing my part in warning a new lender not to fall prey of such deals.
But it seems like OP does not care about my opinion.

[Quickseller]

~

I kinda agree with Quickseller. When someone desperately needs money to resolve something - everything else is secondary then.

It is not necessarily a function of being desperate, it is a function of market economics. People in happy marriages pawn off their wedding rings all the time to meet current financial needs, and pawn shops lend out amounts in line with what they can sell them for at a profit if/when the loan goes into default (although someone pawing off their wedding ring is probably in a desperate situation, so maybe this is a bad example). Other examples of people taking out loans similar to "account loans" would include people taking title loans against their car, and home equity loan against their homes. They also pawn valuable property that is not as sacred as a wedding ring.

I'm not too sure how frowned upon it is to sell accounts that you've received through lending as collateral. I've seen quite a few high-trusted members in the past that sold accounts that they received through lending w/out any repercussions.

Yeah, a few years ago it was kind of accepted. At least it wasn't enforced like it was today. However, these days I think users have become aware of the problems with selling these accounts, and are now actively fighting against it via the trust system. A few high ranked members have been tagged recently even when selling accounts received through collateral.

This shows the importance of not accepting collateral at a value the lender is not confident he can sell quickly for the amount lent, plus interest, plus the value of his time selling the collateral. A smart lender will be familiar enough of the market of whatever he is accepting as collateral to know how much he can sell whatever he is accepting as collateral, and lending out sufficiently less than a quick liquidation value so the borrower has sufficient incentives to repay his loan. In other words, the lender should only lend out so much based on the collateral he is receiving so he will profit if the borrower defaults on the loan.

[Welsh]

This shows the importance of not accepting collateral at a value the lender is not confident he can sell quickly for the amount lent, plus interest, plus the value of his time selling the collateral. A smart lender will be familiar enough of the market of whatever he is accepting as collateral to know how much he can sell whatever he is accepting as collateral, and lending out sufficiently less than a quick liquidation value so the borrower has sufficient incentives to repay his loan. In other words, the lender should only lend out so much based on the collateral he is receiving so he will profit if the borrower defaults on the loan.

My stance on it is an account should not be accepted under any circumstance anymore. I guess there's a valid reason if you believe that the person highly values the account, but you never know what sort of situation they are in financially, and it doesn't really mean much. There's just better ways to go around it.

You could also run into problems from a moderation point of view if an admin isn't aware its changed hands, and the user that gave it to you for collateral gets banned it could be a problem.

[sunnybeacher]

Account collateral isn't a bad collateral at all.
I doubt a Lengedary user would want to waste his account for example for a 50$ loan when most signature campaigns here pay them 100$+/week

[Welsh]

Account collateral isn't a bad collateral at all.
I doubt a Lengedary user would want to waste his account for example for a 50$ loan when most signature campaigns here pay them 100$+/week

Its bad because you don't know their circumstances. For example, some one not planning on ever returning might see $50 as a good deal for their account. Its just not good collateral, because if it does fall through then you can't offload the account, and recuperate your losses.

[digaran]

Anybody accepting, escrowing forum accounts should receive negative trust, accepting accounts as collateral is another way of buying them. I urge the forum admin to please ban account sales. I know that you can't find them all and ban them but when you just say that selling accounts is banned then nobody would publicly escrow or take them as collateral because there is the possibility of defaulting and therefore having the accounts changing hands.

#Banaccountsales.

[mdayonliner]

But it seems like OP does not care about my opinion.

LOL you are wrong. I did care. But when hilari says this...

There are no forum rules on this. You can accept whatever you want as collateral and is entirely up to you to secure.

...then I wanted to clear that I asked on my OP.

I can see clearly that we have different opinions on this subject. What everyone suggesting is a safer approach which is ok but as a lender I get asked from users to accept their account as the collateral. In some cases these members do not have anything else to offer but they need the fund desperately. I found few of them are legit users and they have no intention to default the loan. How do you deal with them? Don't they deserve a fair deal since the forum has not such rules which stops account taking as collateral.

PS: I see someone has expressed his aggressive stance which was expected