9/9/2011 edits to the Terms of Use

[Guest]

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[JohnAtKiva]

This week was my last week at Kiva, so I'm officially working pro bono from now on (my choice, just to free up some budget).

I haven't been keeping track of these things as closely, but wanted to give a heads up that some changes to the Terms were posted tonight:
http://www.kiva.org/legal/terms

ChangeDetection.com will track each and every change (the link isn't available yet, but I'll post it when it is), but here are some highlights:

* References to "entrepreneur" have been changed when appropriate to "borrower", since we're now offering student loans and green loans.
* Some words were made more consistent: for example, references to loans are now more consistently capitalized as Loans.
* In order to better enable partnerships with potential field partners that offer agricultural training and support to farmers, we added this sentence: "In certain cases, Borrowers may receive goods and services funded by Loan amounts, such as agricultural packages, from Field Partners, instead of the monetary amount of the Loan."
* There was some language protecting Field Partners from liability in the event that less than 100% of a loan is repaid (for example, if a borrower defaults on a loan).  We broadened that to cover any "related Field Partner entity" - such as, for example, a local Kiva City partner that's not the official financial partner listed as our field partner.
* This sentence was added: "In addition, in such cases of User inactivity, Kiva may elect to automatically terminate the inactive User account."  User inactivity here, as I understand it, is defined as 24 or more consecutive months where you don't make loans don't even receive repayments.  Here's the existing definition in the terms:

"there may be occasions when a User becomes "inactive" for an extended period of time –  i.e., a User does not log in to his or her Kiva account or there are no credits/withdrawals made to such User's account"

 Not sure exactly what termination would involve though: I'm assuming that the users' loan profile would still show up on loans that they made, so maybe the lender profile wouldn't be linked?  In any case, this clause just reserves the right to terminate accounts; at this point, there are no plans to terminate accounts.
* Kiva added some language to more explicitly support Free Trial loans: e.g. "Kiva may offer certain promotional products (for example, free trial credits) for Users.  Due to the promotional nature of these products, Loan repayments collected with respect to these promotional products will not necessarily be repaid to the applicable User".  More in section 1.9.
* This language was added to better protect borrower privacy.  For example, if a borrower's full name was listed during fundraising but then the loan went into default... a site using the API might still display the full name.  This language would allow Kiva to ask that site to update their website:

"In addition, to the extent you receive information from Kiva, its Field Partners or the Borrower with respect to any Borrower, and that information is later removed from the Website (including, without limitation, due to the Loan delinquency or default of a particular Borrower or the sensitive nature of particular Borrower profiles), you may not further disclose or otherwise provide such information to another party in a way that allows a personal identification of such Borrower, if such Borrower (either directly or through the corresponding Field Partner or Kiva) has opted to have his or her identity withheld on the Website."

* A section on DMCA notification was added that protects Kiva from copyright infringement claims.
* If you're violating copyright rules for example, Kiva reserves the right to remove your content in order to protect itself legally and otherwise: "If you violate this Agreement or if your participation in the Program or registered account is terminated, Kiva has the right to delete your profile and remove your User Generated Content."  (Section 9)

There are some other edits here and there.  Let me know if you have any questions or concerns!

Best,
John

[YowieFreak]

• Why are expired loans going to be treated differently to refunded loans?
• Why are repaid loans going to be treated differently to refunded loans?  (Especially in the cases where the loan was simply refunded because of an error in the original repayment schedule, even though the borrower has made all their repayments so far in accordance with that "incorrect" schedule, and only has one repayment left to make.)
• Are the Ts&Cs of Kiva going to be changed to state that lenders must remove borrower's names from their own records (which may, in some cases, be searchable via the internet) when a loan is delinquent or defaulted?  Or will lenders only be required to remove details of refunded loans from their own records?
• Will the various internet "time machines" be modified to ensure that they do not display the earlier pages showing the borrower's actual name?

We are treating refunded loans differently because loans are often refunded because there is an issue with the loan or because the borrower didn't know that he/she was on the website. When loans are refunded, lenders no longer hold a share of that loan, so information about that borrower doesn't need to be shared with them.

We haven't changed the terms to require that lenders remove borrowers' names from their own records. This is something that we can talk about as we continue to roll out these borrower privacy improvements, but right now, we aren't asking lenders to make any changes to their own records of their loans outside of Kiva.

In the same way, we are still working on figuring out the best way to anonymize these loans. We've changed what we have control over, but we'll certainly work to be more thorough in making changes to internet "time machines" if possible.

...
* This language was added to better protect borrower privacy.  For example, if a borrower's full name was listed during fundraising but then the loan went into default... a site using the API might still display the full name.  This language would allow Kiva to ask that site to update their website:

"In addition, to the extent you receive information from Kiva, its Field Partners or the Borrower with respect to any Borrower, and that information is later removed from the Website (including, without limitation, due to the Loan delinquency or default of a particular Borrower or the sensitive nature of particular Borrower profiles), you may not further disclose or otherwise provide such information to another party in a way that allows a personal identification of such Borrower, if such Borrower (either directly or through the corresponding Field Partner or Kiva) has opted to have his or her identity withheld on the Website."

I assume we now DO have to remove borrower's names from our own records, unless we can provide an absolute guarantee that no person other than ourself will ever see those records, e.g. if my wife looked at my computer I would be in breach of Kiva's Terms of Use.

I also assume Kiva will be placing something extra on every web-page to indicate whether the removal of the borrower's details was at the request of the Borrower (either directly or through the corresponding Field Partner or Kiva), or whether it was at the request of the Field Partner (either directly or through Kiva) without any request from the Borrower, or even whether it was at the request of Kiva without any request from the Borrower or the Field Partner.

[David2051]

I still think all repayment information for all borrowers should be available only to lenders on the loan.  Then there would be no need for borrowers to become anonymous if they become delinquent. 

Can you imagine how you would feel if your loan repayment information was made available online, even if you are current on your repayments?  I know I would not want my car loan or mortgage repayments available to anyone besides my lender. 

Delinquency information would still be available aggregated to the field partner level, which is all anyone needs to see when choosing new loans.    This after the fact anonymizing of loans is just ridiculous. 

[JohnAtKiva]

I assume we now DO have to remove borrower's names from our own records, unless we can provide an absolute guarantee that no person other than ourself will ever see those records, e.g. if my wife looked at my computer I would be in breach of Kiva's Terms of Use.

Hello YowieFreak.  As mentioned earlier, we've designed our borrower profile display features to follow the best practices as outlined by the Fair Debt Collection Practices Acts.
http://www.kivafriends.org/index.php/topic,5313.msg91397.html#msg91397

Any changes to our terms of use on this subject are designed in part to sync up with these recommended best practices, around how other industries like banks handle the publishing of borrower information about delinquencies and defaults.  In other words, if you're not a fan of the best practices recommended by the Fair Debt Collection Practices Acts... you may want to talk to the U.S. Congress. :-)

I also assume Kiva will be placing something extra on every web-page to indicate whether the removal of the borrower's details was at the request of the Borrower (either directly or through the corresponding Field Partner or Kiva), or whether it was at the request of the Field Partner (either directly or through Kiva) without any request from the Borrower, or even whether it was at the request of Kiva without any request from the Borrower or the Field Partner.

If a borrower is delinquent or defaulted, the removal of any identifying borrower details is done by Kiva in order to be in line with our borrower privacy policy.  Wasn't sure what you meant by requests from borrowers... if you have any examples, let me know and I'd be happy to ask about it!

John

[YowieFreak]

Hello YowieFreak.  As mentioned earlier, we've designed our borrower profile display features to follow the best practices as outlined by the Fair Debt Collection Practices Acts.
http://www.kivafriends.org/index.php/topic,5313.msg91397.html#msg91397

Any changes to our terms of use on this subject are designed in part to sync up with these recommended best practices, around how other industries like banks handle the publishing of borrower information about delinquencies and defaults.  In other words, if you're not a fan of the best practices recommended by the Fair Debt Collection Practices Acts... you may want to talk to the U.S. Congress. :-)

I'm not particularly concerned one way or the other - I was just trying to clarify whether there has been a change to what we as Lenders are now required to do in order to comply with Kiva's requirements.

Ali stated that we didn't have to update our records.  (Which was probably correct at the time.)  The new Terms of Use say we do have to update our records or stop using Kiva.  Am I correct in my understanding of the intent of the change?

If a borrower is delinquent or defaulted, the removal of any identifying borrower details is done by Kiva in order to be in line with our borrower privacy policy.  Wasn't sure what you meant by requests from borrowers... if you have any examples, let me know and I'd be happy to ask about it!

You said that the Terms of Use state "if such Borrower (either directly or through the corresponding Field Partner or Kiva) has opted to have his or her identity withheld on the Website", so it appears we only have to update our records if the Borrower asks us or Kiva or the Field Partner to have the information withheld, but obviously we don't have to update our records if the Borrower does not submit such a request - i.e. before we can tell whether we need to update our records or not we need to know whether the request has come from the Borrower (directly or indirectly), or whether the request to withhold information is simply the Field Partner's or Kiva's idea.

If Kiva includes, in its Terms of Use, a requirement for the Lenders to perform an action in certain specific conditions, it is incumbent upon Kiva to provide Lenders with sufficient information to know when those specific conditions have occurred.

[JohnAtKiva]

Thanks YowieFreak, I better understand your concerns now.  I will take them back to the legal team and highlight your concerns... thanks!

[AccountAbility]

Hello YowieFreak.  As mentioned earlier, we've designed our borrower profile display features to follow the best practices as outlined by the Fair Debt Collection Practices Acts.
http://www.kivafriends.org/index.php/topic,5313.msg91397.html#msg91397

Any changes to our terms of use on this subject are designed in part to sync up with these recommended best practices, around how other industries like banks handle the publishing of borrower information about delinquencies and defaults.  In other words, if you're not a fan of the best practices recommended by the Fair Debt Collection Practices Acts... you may want to talk to the U.S. Congress. :-)

John - Thanks for your continued pro bono efforts.  However, this is one that Kiva and its attorneys need to revisit  As David points out, the whole concept of publishing repayment records to the general public should be seriously re-thought. 

As far as the legal requirements you cite, unless Kiva is seriously concerned that the whole peer to peer lending concept cannot be legally supported, then the Fair Debt Collection Practices Act would NOT apply to information shared with the underlying "participating lenders" on the loan.  The secondary market is filled with parties who routinely continue to get detailed payment and delinquency data.  In fact it is Kiva itself that jeopardizes the borrowers' privacy by announcing to those not participating that a loan is delinquent.

Dan

[JohnAtKiva]

Here's that change link I mentioned in my first post on this threead:
http://www.changedetection.com/log/org/kiva/terms_log.html

John - Thanks for your continued pro bono efforts.  However, this is one that Kiva and its attorneys need to revisit  As David points out, the whole concept of publishing repayment records to the general public should be seriously re-thought.  

I respect your and David's thoughts, which he posted about more extensively last month:
http://www.kivafriends.org/index.php/topic,5313.msg91418.html#msg91418

There were some counterpoints posted by a number of KivaFriends here:
http://www.kivafriends.org/index.php/topic,5313.690.html

I think the counterpoints raise a good point: hiding repayment records would have an impact on the overall transparency of the site that can't be ignored.  Happy to continue that discussion on the other thread...

As far as the legal requirements you cite, unless Kiva is seriously concerned that the whole peer to peer lending concept cannot be legally supported, then the Fair Debt Collection Practices Act would NOT apply to information shared with the underlying "participating lenders" on the loan.  The secondary market is filled with parties who routinely continue to get detailed payment and delinquency data.  In fact it is Kiva itself that jeopardizes the borrowers' privacy by announcing to those not participating that a loan is delinquent.

I think we both agree that the FDCPA's restrictions around the publication of a list of delinquent borrowers does not apply to the participating lenders in a loan!  The participating lenders would have a "legitimate business need" to see the "publication of a list of consumers who allegedly refuse to pay debts."  I mentioned earlier that this is an exception to the FDCPA:
http://www.kivafriends.org/index.php/topic,5313.msg91397.html#msg91397

I believe that YowieFreak's question was around whether or not he would have to edit his own personal records with borrower information, in the off chance that his wife saw the records and may not have the same legitimate business need that he would have.  He also had some questions about the language in the Terms itself that I thought were very interesting, and that I plan to take to our legal team.

Best,
John

[AccountAbility]

Here's that change link I mentioned in my first post on this threead:
http://www.changedetection.com/log/org/kiva/terms_log.html

I respect your and David's thoughts, which he posted about more extensively last month:
http://www.kivafriends.org/index.php/topic,5313.msg91418.html#msg91418

There were some counterpoints posted by a number of KivaFriends here:
http://www.kivafriends.org/index.php/topic,5313.690.html

I think the counterpoints raise a good point: hiding repayment records would have an impact on the overall transparency of the site that can't be ignored.  Happy to continue that discussion on the other thread...

I think we both agree that the FDCPA's restrictions around the publication of a list of delinquent borrowers does not apply to the participating lenders in a loan!  The participating lenders would have a "legitimate business need" to see the "publication of a list of consumers who allegedly refuse to pay debts."  I mentioned earlier that this is an exception to the FDCPA:
http://www.kivafriends.org/index.php/topic,5313.msg91397.html#msg91397

I believe that YowieFreak's question was around whether or not he would have to edit his own personal records with borrower information, in the off chance that his wife saw the records and may not have the same legitimate business need that he would have.  He also had some questions about the language in the Terms itself that I thought were very interesting, and that I plan to take to our legal team.

Best,
John

I understand your points, but in a discussion on Kiva's Terms of Use, the legalities of issues clearly take precedence to marketing and lender preferences. 

The key issue lies in the definition of "publish".  While potential lenders can weigh in on whether delinquency data is of use to them, that preference has little bearing if their ability to see such data moves Kiva's web information into "publishing" as opposed to simply keeping participating lenders informed.  The latter is clearly established as acceptable while the former moves into murky areas which ultimately will be subject to litigation (hopefully by parties unrelated to Kiva).

While it might be a subject for attorneys to parse and dice, I think the accidental viewing by a spouse of a delinquency record hardly constitutes "publishing".  Kiva Lenders have a duty not only to not publish, but to give those records a level of security they would employ on such things as their own confidential data.  Subsequent removal of data by Kiva to avoid "publishing" should have no effect on records of participating lenders and therefore there can be no legitimate requirement for them to remove the same data--unless the lender was engaged in "publishing" the data themselves (in which case they must simply cease "publishing").

Dan

[YowieFreak]

While it might be a subject for attorneys to parse and dice, I think the accidental viewing by a spouse of a delinquency record hardly constitutes "publishing".  Kiva Lenders have a duty not only to not publish, but to give those records a level of security they would employ on such things as their own confidential data.  Subsequent removal of data by Kiva to avoid "publishing" should have no effect on records of participating lenders and therefore there can be no legitimate requirement for them to remove the same data--unless the lender was engaged in "publishing" the data themselves (in which case they must simply cease "publishing").

Many Lenders "publish" (on publicly viewable websites) lists of Borrowers that they have loaned to, showing the Borrowers names (as originally supplied by Kiva) and links to the relevant Kiva web-page (which may indicate that that Borrower is now delinquent).

The fact that Kiva frequently breaks those links by changing the URLs would not be sufficient for those Lenders to avoid violating the new Terms of Use.  Kiva will need to actively notify Lenders each and every time that the Borrower opts to withhold his / her details, so that the Lenders can remove the necessary information.  And, obviously, Kiva will also have to notify Lenders each and every time that Borrowers withdraw their request to withhold information so that Lenders can restore their lists.

Does that last situation ever occur?  I notice that several previously delinquent loans, where the Borrower opted to have their information withheld, subsequently reverted to showing full details (including the fact that the Borrower had been delinquent in the past!!) so I assume the Borrower in those cases must have changed their mind - or else Kiva has violated their privacy without permission.  But, then again, maybe the Borrower never opted to withhold their information in the first place.  John, does Kiva have any stats on how many Borrowers have elected to have their information withheld, excluding those who never allowed that information to be provided in the first place.

P.S.  Here's an interesting question - in the case of a group loan, do all the individuals comprising the group have to opt to have their identities withheld, or does each individual have the right to withhold the identities of all the individuals, or does each individual have the right to have their own identity only withheld?