Finance Contract Offer Termination

A finance contract product offer terminates either when the contract term ends or when the subscriber terminates the contract early through a cancel offer operation.

Finance contract product offer termination occurs when the contract term expires or when the subscriber requests cancelation. A contract can be terminated early if the principal has been paid off early and no outstanding principal exists, if there is outstanding principal but no charges in the debt balances, or if there is both outstanding principal and charges in the debt balances.

If a subscriber requests cancelation, the finance contract offer can only be canceled through a SubMan API. When a finance offer is canceled, the charges are applied based on the termination penalty terms in the contract and any outstanding principal and late charges.

Through the SubMan API, early termination can be generated in the following modes:
  • Normal — The subscriber pays early termination charges and all accumulated debts. If the subscriber cannot pay early termination charges and all accumulated debts, the transaction is canceled.
  • Partial write-off — The subscriber pays as much of the early termination charges and accumulated debt as possible with the available balance, and the remainder is written off.
  • Complete write-off, unconditionally — Regardless of the available balance, no early termination charges are paid and no debt is written off.
  • Pay None — No debt payment is made at the time of cancelation. The early termination and cancelation charges are charged to the debt balance and all accumulated debt remains in the debt balance after the cancel operation.
Optionally, you can use the IsWaiveEarlyTerminationCharge parameter in the SubMan Cancel API to waive early termination charges upon cancelation. For more information, see the discussion about MtxCancelOfferData in MATRIXX Subscriber Management API.
Early termination charges are applied to the debt balance which holds the missed recurring charges. Early termination charges are calculated based on the outstanding principal:
  • Percent of early termination charge — Percentage multiplied by the outstanding principal.
  • Fixed early termination charge — Fixed amount.
  • Fixed plus percentage of early termination charge — Fixed amount plus the early termination charge percentage multiplied by the outstanding principal.
Note: In versions before 5110, any outstanding principal (not already in the debt balance) and termination penalties were treated as a single charge record with impact type early termination charge. In version 5110 and later, the outstanding principal (not already in the debt balance) is a separate charge record with impact type charge and early termination charges are a separate record with impact type early termination charge.

Contract expiration without cancelation means that the debt in the two debt balances remains unpaid. If the contract offer is configured for expiration to trigger cancelation, the debt is paid off, or written off, upon expiration. If the debt remains after expiration, it can be explicitly paid off or written off through the ContractDebtPayment API.

At the end of the finance contract term, whether through termination or cancelation, the contract status is set to Terminated.

Events and Notifications

Finance contract offer events and notifications are generated when processing finance contracts. For example, an event is generated with an updated contract state. When you renegotiate a contract, an MtxPurchasedItemModifyEvent Event Detail Records (EDRs) is generated that includes the owner ID of the owner of the contract and arrays of offers and bundles that have been modified. For information about finance contract events, see the discussion about event fields in MATRIXX Integration. For information about finance contract notifications, see the discussion about notification message fields in MATRIXX Integration.