When a customer fails to pay at least the minimum amount due (MAD) by a specified number of days after the due date (determined by the program parameter Number of days to block the account for unpaid statement), the account's collection status changes to OVERDUE, and the account is blocked from doing cash-outs (purchases, cash withdrawals, and so on). For more information about collection statuses, refer to Account collection status.

Some countries/regions, require you to close accounts if they remain overdue for a certain number of days. You can close delinquent accounts manually, or you can configure the Pismo platform to close delinquent accounts automatically.

An account that is overdue, meaning the MAD has not been paid by the due date, is called a delinquent account.

🚧

If a delinquent account is closed, it's permanently canceled and cannot be reopened.

Closing delinquent accounts

When the Pismo platform closes a delinquent account, it follows these steps.

1. Post accrued interest. The delinquent account should have accrued some interest that is in a pending state. This interest is posted to the statement before the account is closed.
2. Advance future installments. If the account has installments in future statements, these are moved to the current statement. This allows the Pismo platform to sum all the debts in the current statement.
3. Zero out the balance. Now that all the debts are in the current statement, a credit transaction is posted that is equal to the current balance, so that the resulting balance is zero.
4. Change account status to the final account status defined by the DELINQUENT_ACCOUNT_CLOSURE_ACCOUNT_STATUS multivalue program parameter.
5. Block account cards. Any credit cards issued for the account must be blocked, so the customer can't keep using them.
6. Generate a Delinquent account closed event.

📘

It's possible for a transaction to be authorized before a delinquent account is closed, but not posted until after it's closed. For information about how the Pismo platform handles this situation, refer to Late transactions.

How to manually close a delinquent account

To manually close an account for nonpayment, use the Close delinquent account endpoint. This endpoint starts the delinquent account closure process for one account.

The Pismo platform needs to make the following validations in order for the request be successful.

• The account must be a credit account.
• If processing_code is not in the body of the request, the endpoint uses the value of the multivalue program parameter DELINQUENT_ACCOUNT_CLOSURE_LATE_TRX_DEBIT_PROCESSING_CODE. If DELINQUENT_ACCOUNT_CLOSURE_LATE_TRX_DEBIT_PROCESSING_CODE is also not set, the endpoint throws an error.
• If reason is not in the body of the request, the endpoint uses the value configured in the multivalue program parameter DELINQUENT_ACCOUNT_CLOSURE_REASON. If this parameter is also not set, the endpoint throws an error.

If Close delinquent account executes successfully, the account status is set to the final account status defined by the DELINQUENT_ACCOUNT_CLOSURE_ACCOUNT_STATUS multivalue program parameter.

How to automate closing delinquent accounts

The Pismo platform runs a job once a day to automatically close delinquent accounts. To activate this job for your program, use the Update multivalue program parameter values endpoint to configure the parameters with the following parameter IDs: 500 - 503, 505, 506, 508 - 511. For more details about these parameters, refer to the table in the Multivalue program parameter guide. Note that the "Applies to" column of the table also indicates which parameters apply to credit liquidation.

If you provide a non-empty array of integers for the DAYS_BEFORE_TO_WARNING_DELINQUENT_CLOSURE parameter, the job generates a Delinquent account warning event for each integer in the array. For example, if the first integer in the array is 5, the job generates a warning event 5 days before the account is due to be closed.

Get delinquent account closure information

If an account is going through the delinquent closure process, use the Get delinquent account closure process information endpoint to get the account closure information.

Late transactions

A late transaction is a transaction that was authorized for an account before the account was closed for delinquency, but wasn't posted until after the account was closed.

When an account is closed for delinquency, the Pismo platform monitors the account for the next 365 days. If a late transaction is posted to the account during this period, the platform posts a credit or debit adjustment to bring the account balance back to zero. The platform then issues a late_transaction-1 event.

📘

The count for the 365 day period begins the day after the account is closed. If a late transaction occurs on the day of closure, the Pismo platform processes it the following day.

Statement cycles after a delinquent account closure

When the Pismo platform closes a delinquent account, it does not automatically stop closing statement cycles for the account. Statements continue to close on their regular schedule, even after the status changes to the final account status defined by the DELINQUENT_ACCOUNT_CLOSURE_ACCOUNT_STATUS multivalue program parameter.

This behavior exists because the platform monitors the account for late transactions for 365 days after closure. Statements must include late transactions as well as the corresponding reversal transactions (credits or debits that bring the balance back to zero). There is always one statement per cycle per account—multiple open statements do not accumulate.

After the 365-day monitoring period ends, the platform stops processing new transactions for the account. However, statement cycles continue to close unless you explicitly stop them.

How to stop statement cycles for a canceled account

To stop statement cycles from closing for a canceled account, use the Configure features by account status endpoint. Map the account's final status in the credit liquidation process to disable the statement-closing feature.

When statement closing is disabled for an account status, the platform stops the following operations for accounts in that status:

• Statement closing events
• Statement update events
• Other balance operations tied to the statement cycle

📘

If the Pismo platform cannot close statement cycles for a canceled account, this means that it also can't create new statements for the account. So, the account is left with one open statment.