Prosper and Trust

I recently found out about the website Prosper.com,the idea is quite original though very simple: lend money to those who need to borrow some. Everybody can be an usurer! You even get to choose the interest rate, whether you lend or borrow money.
It is quite strange actually, and the main question to raise here is that of trust:
How can you lend money to someone you have never met? However there are drastic security measures (you have to complete a profile with a security number and your identity), but some people may still find it hard to wholly trust 1) the website itself 2) people who use it.
And if the concept may seem generous at first - those who have money lend to those who need it - look closer and you'll find it's not that ideal: prosper.com claims that "Borrowing money through Prosper is fast and easy, and because you're borrowing from people, the rates may be lower than you'd expect!"
Then if you look at the Borrow page, you'll find interest rates up to 25.61%... Where's generosity in that?