[Akanner]

lololol! its a risk/reward decision. The reward is far greater as a funder! Which is why there are funders at all. I am a broker not an underwriter. Please do not make me responsible for your sub-par underwriting skills. I don't work with any lender whos claw back period exceeds 30 days ( not 30 business days 30 regular old days).We work really hard to get deals submitted and performance on a deal should not be the brokers responsibility( obviously if the broker double funded or took a large PSF that is a different story and deserves to be clawed back) ! In a perfect world there would be no clawbacks for honest,hardworking non-psf charging, non -stacking ISOS!!

In a perfect world i would agree with you. there would not be a need for CB since brokers are acting in good faith and the onus is on the UW. Unless an unforeseen circumstance were to occur like a natural disaster or a merchant suddenly having no income a deal should not default. And if it does, one cannot blame the broker.

But since we do not live a perfect world. An UW can make a great decision and fund a deal and it can go bad due to PSF, Stacking, double funding, lying to a merchant etc. Therefore causing a funder to want a commission back

[RickyR3712]

In a perfect world i would agree with you. there would not be a need for CB since brokers are acting in good faith and the onus is on the UW. Unless an unforeseen circumstance were to occur like a natural disaster or a merchant suddenly having no income a deal should not default. And if it does, one cannot blame the broker.

But since we do not live a perfect world. An UW can make a great decision and fund a deal and it can go bad due to PSF, Stacking, double funding, lying to a merchant etc. Therefore causing a funder to want a commission back

This is the truth. Claw back should only happen if the broker did something wrong.
Is this your claw back policy?

[Akanner]

This is the truth. Claw back should only happen if the broker did something wrong.
Is this your claw back policy?

To be fully honest, that is not my policy.

1. Very often it is very hard to find out what went wrong and why the deal went bad, especially if the merchant has gone MIA.
Every so often, you get updated docs and find out that you were double funded, stacked etc. Or eventually, you hear from the merchant that he defaulted on your MCA since the SBA or LOC he was promised never came.

2.I have a few isos that i have full trust in and if a deal comes bad every so often it can slide and not clawback a cm.
But there are other isos that pretty quickly you notice that all their deals go a bit sour and you see that they are just trying to shovel whatever they can at you (most deals are previous defaults, funding mtd that they knew about, hidden accounts). in a case of a day one default, we would be more inclined to take our cm back and either be more cautious with them or no longer fund for them.

Obviously, there are shops that fit between those 2 types.

[alexd12345]

In a perfect world i would agree with you. there would not be a need for CB since brokers are acting in good faith and the onus is on the UW. Unless an unforeseen circumstance were to occur like a natural disaster or a merchant suddenly having no income a deal should not default. And if it does, one cannot blame the broker.

But since we do not live a perfect world. An UW can make a great decision and fund a deal and it can go bad due to PSF, Stacking, double funding, lying to a merchant etc. Therefore causing a funder to want a commission back

I very clearly stated Im ok with a no stack no psf no false promises as a clause in the no clawback policy .

[alexd12345]

I very clearly stated Im ok with a no stack no psf no false promises as a clause in the no clawback policy .

I think if funders put the following into their iso agreement that if at any time there is irrefutable proof that an iso either lied to merchant, charged a psf or double funded/ stacked a merchant, the iso can be clawed back immediately, even without a default, it would cause alot less of this kind of activity and clean up this industry in a major way ! Als we ISos would not t have to be responsible for crappy underwriting.

[Akanner]

I think if funders put the following into their iso agreement that if at any time there is irrefutable proof that an iso either lied to merchant, charged a psf or double funded/ stacked a merchant, the iso can be clawed back immediately, even without a default, it would cause alot less of this kind of activity and clean up this industry in a major way ! Als we ISos would not t have to be responsible for crappy underwriting.

I hear, but i think that would be almost to impossible to enforce. Each clawback will be like a court case with each side presenting their evidence.
Also, the same brokers that will do the grey area tactics are not the type that will honor a clawback for getting caught. It will most likely lead them to fund side accounts, pull psf under entity and all sorts of other tricks to skirt getting caught.

I think a clear cut 30 day (usually 20 payments) policy is clear cut and leaves less room for debate. Sometimes you make it by one payment/day sometimes you lose it by one payment/day no matter if its a 40 day deal or 140 days. It can be like football; a game of inches.

An iso and funder can make up their own agreement or own deal by deal basis. whether it is a period of time or out of principle on the deal.