Sequencing of Overdue Letters
Purpose
Legally,
Overdue Letters have to be sent to borrowers in a predefined sequence. Timing
of the letters, and number of letters sent may be differed depending on the
module and arrears collection policy.
Timing
Normally
at system setup. These sequences would be rarely changed thereafter.
Access
- Accounts | Edit/View Overdue Letters
Setup
An example stream of Overdue Letters is
shown below. Where appropriate a comment
is made about the features of that letter.
First Missed Payment Letter
1st Severity
This is a special
letter that can be generated if payment is missed for the first instalment only
on a loan, providing the set Letter Indicator is Normal. It is activated from the appropriate system
account type. Note that there is no Next
Letter selected as this is not appropriate.
Reminder Letter
2nd
Severity
This is the First Overdue Letter in the Normal
processing sequence. It will be
activated once the account has been arrears for 7 days. Once it has been created, in the above
example, the Next Letter that will be generated is FLPREPN Prepossession
Notice.
Depending on the business arrears policy,
this letter may not be generated.
Prepossession Notice
3rd Severity
This is the Second Overdue Letter in the Normal
processing sequence. It will be
activated once the account has been arrears for 18 days. This letter will still be created even if
part of the arrears has been paid. The
test is if the account still has an arrears balance. Once it has been created, the next letter
that will be generated is FLWRNT.
Warrant to Repossess
4th Severity
This is the Third Overdue Letter in the Normal
processing sequence. It will be
activated once the account has been arrears for 33 days. This letter will still be flagged for
creation even if part of the arrears has been paid. The test is if the account still has an
arrears balance.
Because the repossession process can take an
undetermined period of time this letter may be set up in a number of different
ways. The method chosen will depend on the business processes of the finance
company. Possible set up alternatives are:
- Set up with the Next Letter specified and the set Letter Indicator set to Normal
This means the Post Possession
letter will be flagged for creation in 15 days (15 is the number entered in the
Days before this letter field for the Post Possession Notice below). This may work as a checklist for the finance
company to check if the repossession process is complete and can therefore send
the letter. If the repossession process
is not complete the account letter can be updated to be flagged for creation at
a specified later date. See Manipulating Account Overdue Letters.
- Set up with the Next Letter blank and the Letter Indicator to Arrangement
This means after this letter has been created the letter will be set to Arrangement. The letter may then be taken off Arrangement,
and returned to the Normal letter sequence, if the account is bought up to
date. The post possession notice would then be created manually when required.
- Set up with the Next Letter blank and the Letter Indicator to Normal
This means this is the last letter in the sequence. The account would have to be monitored
manually and the post possession notice sent when required.
In all of the above situations the Account
Warning Indicator may also be used to monitor the arrears status of the
account.
This communication will often be set up as a
Copy Communication. This means extra
information, that is not held in the system and therefore automatically
included in the communication via a replacement field, can be added.
If the Warrant to Repossess has been set up
in this way and is generated as part of the Review and Create Overdue letters
process, then each time one of these communications is generated, the process
will stop so you can alter the communication with the information required. This may prove annoying. If this is the case this letter should not be
part of the Overdue Letter sequence, or should not be a Copy Communication.
In the Communication System, after the
communication has been created, go into the communication browse, display these
communications by their Communication Type and alter them as required prior to
printing.
Post Possession Notice
5th Severity
This is the fourth overdue letter. It is unusual for this letter to be created
as part of the normal processing sequence.
This letter is normally set up as a Copy Communication
as extra information needs to be added to the letter that is not held by the
system and so cannot be automatically embedded in the letter with a replacement
field.
These letters will be manually created from
an account 
dialog.
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