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She went by Citigirl, and she needed to borrow $4,000 (U.S.) fast.
Her credit rating was in the tank and, as her online profile explained to prospective lenders, she needed to pay for legal fees and fines related to a drinking-and-driving charge she faced in New Jersey.
"I had only had a drink ... but I'm so small and I hadn't had anything to eat," she wrote, adding, "I'm responsible and dependable."
Citigirl is one of thousands of people who have turned to total strangers for money on the Internet with tales of woe and optimism - and found many lining up to bid on the chance to lend them cash.
The sharing of money between individuals rather than through a financial institution is nothing new. Facilitated by the Internet, however, person-to-person loans are emerging anew and on their way to Canada.
The practice, known as social lending, is already exploding in Europe and the United States, where people are increasingly sidestepping banks in favour of going hat in hand into cyberspace through websites such as Zopa.com and Prosper.com.
It's a fertile market. Since going live last year, San Francisco-based Prosper has amassed 340,000 members and generated $71-million in loans. A recent study found that 74 per cent of Britons polled would rather borrow money through a website such as Zopa than go to a bank.
Social lending companies make money by charging borrowers a fee for generating their loan, and lenders a fee to service the loan. Overdue debts are reported to a collection agency and, in some cases, sold to debt buyers for pennies on the dollar.
In the case of Prosper, the identities of members are confirmed using their names, addresses and Social Security numbers, but identities are not revealed to borrowers or lenders. The company also provides lenders with borrowers' credit ratings, past delinquencies, open credit lines and other financial data.
The rest of the information lenders get is whatever borrowers or other members who "endorse" them provide.
In most cases, that includes their income, monthly expenses and personal anecdotes ranging from regretful ("I made a few bad mistakes with my credit four-five years ago.") to fantastic ("My daughter was kidnapped by her biological mother. This caused me to use everything I had to find her.").
Many post photos of themselves, their pets, their grandchildren and anything else they presumably believe will project an image of trustworthiness or evoke sympathy from a potential lender.
One borrower, Baseball32, claimed to be a retired Major League Baseball pitcher with two World Series rings who landed himself in debt supporting a daughter and her two children after their father ran off. His request for $13,000 was funded by over 300 people at an interest rate of 19.13 per cent.
Within a week of posting her request on Prosper, Citigirl had met her goal thanks to 55 people who offered up between $50 and $450 each with the promise that they would get a 24-per-cent return on their investment over three years.
Corey Whitlaw, 31, a software engineer in San Mateo, Calif., who has lent close $7,000 to 125 people on Prosper deliberately bypasses the personal stories.
"I feel they could be made up, so I go by the numbers - income-to-debt ratios, previous delinquencies, credit ratings," said Mr. Whitlaw, who blogs about his Prosper experience at Lazymanandmoney.com.
"The numbers are a better indicator of an ability to pay back than whether they're a good wordsmith."
He chooses high-risk borrowers in an effort to maximize his return. Three of his borrowers have defaulted and three others are almost four months behind. With all Prosper loans repayable over three years, he is still waiting to realize a profit.
Toronto-based CommunityLend.com hopes to tap the estimated $110-billion (Canadian) unsecured consumer debt market in Canada as soon as this fall.
"You don't have to get dressed in a suit and sit in a stuffy office in front of a banker asking you all kinds of questions," said Michael Garrity, a former vice-president of marketing at Canada Post's online bill-payment division who co-founded CommunityLend with Colin Henderson, former head of online banking at Bank of Montreal.
"We provide an alternative with a rate that is completely formed by a free market," Mr. Garrity said. The company is awaiting licensing under a host of federal and provincial regulations.
Banking analysts praise the innovation of the infant industry, but say its success will depend on how well it safeguards against fraud and provides lenders with tools to spot deadbeat borrowers.
CIBC World Markets banking analyst Darko Mihelic said the "unknowns" of the industry are still too numerous to threaten the dominance of banks.
"You can look at these stories and say, 'Look what happened to this person,' but how do you really know they haven't fabricated these stories?" Mr. Mihelic asked. "Nobody who could get a loan at a bank would be here."
Indeed, most of the borrowers on Prosper have bad credit. But lenders can seek to clarify ambiguities in a borrower's request by posing questions to them. Fewer than 2 per cent of its borrowers have defaulted, while close to 3.5 per cent are at least three months late on payments, according to the company.
Mike Héroux, 25, a Montreal banker who runs Thefinancialblogger.com and is hankering to get into the social lending game in Canada, said credit ratings and the ability to make inquiries is reassurance enough for him to lend.
"You can't fake a credit bureau report, and knowing about someone's credit tells you a lot about a person," Mr. Héroux said. "You can see that people went through a bad period of their lives and that affected their credit. It doesn't mean they'll default. You only have to be late for a $10 phone bill to get bad credit marks."
