Service Model


The illustration above requires explanation of the (5) stages that a company or financial institution has to manage in order to secure or retain new and existing customers and recover what is due to them. Those stages are:

STAGE 1: New Credit. This is the stage in which the customer account is acquired. The prospective customer requests credit from the Client and therefore an underwriting process takes place to gather the necessary information from internal and external source to make an informed decision. The results should help decide on the viability and credit worthiness of the account.

The client has to go through many steps internally to verify that prospective customers (or existing customers requesting credit limit increases) are credit worthy and providing accurate information in their application process. Once this stage is complete, it leads up to what is known as the transaction or COMMERCE TRANSACTED or the point in which commerce is transacted. This also known as the “front-end” of the process where risk management, quality information sources and financial discipline are crucial.

STAGE 2: Receivables. Now that a transaction has been made, this stage is where payment is sought for non-cash transactions. This usually requires an invoice or bill to be prepared and delivered to the customer. A normal cycle time for this stage is from zero (0) – thirty (30) days before cash is received. If the cash is not received within that cycle, then it will usually be considered DELINQUENT.

STAGE 3: Delinquency. This is the stage in which the account is either cured from its delinquency status or the cash is lost. Depending on the industry, a normal cycle time for this stage will be form thirty (30) to one hundred twenty (120) days past the date of the original TRANSACTION invoice or bill. The recovery effort involved in this stage is where CAMDEUS has traditionally become involved in the client’s process.

STAGE 4: Recovery. This stage is where the chance of recovery for any or all of the cash due is in doubt. In fact, the doubt of the recovery debt is so large in some industries (such as banking), that banks are required to officially “write-off” the value of the cash due on these severely delinquent account from their accounting books. The chances of recovery vary depending on the techniques and experience of the credit and collections department or their external recovery service provider.

If cash is recovered within this stage, a premium is usually applied to the recovery as a special incentive to recover some or the entire amount due. The chances of recovery are next to the worst in this stage.

STAGE 5: Bad & Written-off. This final stage is where all written-off receivables are deemed unrecoverable. This is the point of “no-return” for the creditor as they have exhausted all efforts to recover this money either internally or externally. By packaging up these debts for sale into the open market, the possibility exists that some company (like CAMDEUS) or a Special Purchase Vehicle (SPV) may come along and buy the portfolio “as is”.