Single account worked example
Purpose. Walk one unsecured retail loan through the contingent path after write-off. Numbers are rounded and simplified. The point is to show how CP balance, DCA-reported state, recalls, and governance connect across time.
Starting position
Account REF-4471. Customer had a term loan. After prolonged delinquency the CP moves the account through the recoveries decision. Strategy selects contingent debt after accounting write-off rather than immediate debt sale, based on segment economics and conduct profile.
At write-off, the core loan is closed for normal servicing; operational truth moves to the CP recoveries book as described in Source of Record.
Timeline table
| Date (illustrative) | Event | CP recoveries balance | DCA reported balance | Status / notes |
|---|---|---|---|---|
| T0 | Accounting write-off posted; operational record opened in recoveries book | 18,400 | n/a | Recoveries status: eligible for contingent path |
| T0+5d | Placement file to DCA1 (R1); refer amount 18,400 | 18,400 | 18,400 | R1_Refer_Date captured; strategy code STANDARD_R1 |
| T0+40d | Customer makes partial payment to DCA channel | 16,200 | 16,200 | Payment file reconciled same day; dual state aligned |
| T0+90d | DCA requests recall (RQT): proposes move to specialist second tier | 16,200 | 16,050 | Small mismatch logged; see break below |
| T0+92d | CP approves recall; stop work to DCA1; cooling-off 5 days | 16,200 | recall pending | CP recall reason: STRATEGY_REALLOCATE_R2 |
| T0+99d | Placement to DCA2 (R2); refer amount 16,200 | 16,200 | 16,200 | R2_Refer_Date; R1 closed with recall balance snapshot |
| T0+210d | R2 underperforms versus cohort; governance review | 14,800 | 14,800 | Monthly pack shows weak contact rate; no policy breach |
| T0+240d | CP decides terminal abandon (economics) | 14,800 | closed at DCA | Recall from DCA2; CP end state ABANDON per policy |
The small balance break (T0+90d)
For a few days the DCA’s reported balance was 150 below CP after a fee dispute on whether a pass-through cost posted correctly. This is exactly the kind of dual-state break weekly reconciliation should catch. Until resolved, outbound scripts should use CP authoritative balance feeds, not DCA’s lower figure, to avoid under-collection or wrong settlement offers.
Resolution path: operations agrees adjustment rule; finance confirms pass-through; both systems align. See Reconciliation and exception management.
Governance touchpoints
- Monthly pack: REF-4471 appears in R1 cohort then R2 cohort; recovery cash and fee lines must not double-count across recall.
- Recall approval: second line may sample recalls where STRATEGY_REALLOCATE applies, to ensure it is not used to hide poor DCA1 performance without analysis.
- Abandon decision: evidence of proportionality and any hardship check completed even when economics drive exit.
Alternative ending: debt sale
If instead the CP chose sale at T0+200d, you would expect recall from DCA2, final reconciliation, buyer handoff, and customer notices per deal. The operational story changes; trace fields still matter for audit.
Related: R1 / R2 traceability · End states · Back to pack home