Originator group commission claw backs
Brokers / originator groups can have a claw back provision in their strategic alliance agreement where the broker must repay the finance company a percentage of the brokerage paid in respect of a contract, where the contract is terminated or written off as a result of the customer committing a material breach (per the agreement terms and conditions, this would be failure to pay or insolvency) within a certain period.
The commission claw backs are defined against each of the commission rate card tiers which will allow for difference claw backs to be defined for different tiers of commission against each originator group product.
1. To create commission claw backs navigate to Configuration -> Setup
2. Select Commission Rate Cards under the products section.
3. Navigate to the specific commission rate card that the claw backs apply to and click on the "commission claw backs" menu under the hamburger menu.
4. Provide the claw back details
Percentage of commission to claw back: The percentage value of the commission amount that will be clawed back
If the status of the finance agreement becomes: The claw back will only take place if the finance agreement status is changed to this status. The possible statuses that can be selected are "Written Off", "Matured', "Settled"
And the age of the finance agreement is less than: The claw back will only take place if the age of the finance agreement is less than X days
And the outstanding balance is greater than: The claw back will only take place if the outstanding balance of the finance agreement is greater than $X. Only applies if the status is "Written Off"
5. After providing the details click 
to create the new claw back.
If the criteria of the finance agreement meets more than one commission claw back defined, only one claw back will be used based on the following rules:
- First the age will be used to further refine, and it will use the claw back closest to the age of the finance agreement, using all ages that are greater than the age of the finance agreement.
- If there is still more than one the outstanding balance will be used to further refine and it will use the claw back closest to the outstanding balance of the finance agreement, using all outstanding balance that are less than the outstanding balance of the finance agreement.
- If there is still more than one it will use the one with the highest “Percentage of commission to claw back” value.
Example the following has been captured:
Status age is less than outstanding balance > than % to claw back
Written off 90 100 25%
Written off 60 40 50%
Written off 60 30 35%
Written off 60 30 20%
Written off 60 20 15%
The finance agreement is written off and at the time the age is 40 days and the outstanding balance is $35.
More than one claw back meets the criteria so it will refine by first applying the age. The age of the finance agreement is 40 days so it finds the closest age, using all ages that are greater than the age of the finance agreement and refines to:
Status age is less than outstanding balance > than % to claw back
Written off 90 100 25%
Written off 60 40 50%
Written off 60 30 35%
Written off 60 30 20%
Written off 60 20 15%
More than one claw back meets the criteria so it then refines using outstanding balance, using all outstanding balance that are less than the outstanding balance of the finance agreement. The outstanding balance of the finance agreement is 35 so it finds the closest outstanding balance and refines to:
Status age is less than outstanding balance > than % to claw back
Written off 60 30 35%
Written off 60 30 20%
More than one claw back meets the criteria so it then refines using the greatest claw back %
It will use 35% claw back
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