As the operator of the Marketplace, we take debt collections process very seriously. We follow a financial services industry process, whereby we proactively contact the Borrower whose repayment dishonours via SMS, email, and telephone to attempt to get them back on track. We manage these delinquent accounts based on Debt Collections guidelines prescribed by the Department of Fair Trading, though our own in-house collections team.
A charged off status indicates that a Borrower has defaulted on their loan, usually due to bankruptcy, sickness, job loss, death, or other unforeseen circumstances. Typically, this means that we’ve exhausted our collections efforts and there’s a low statistical likelihood that we’ll be able to collect any funds from the Borrower; resulting in a capital loss for Lenders.
Once the loan is charged off, there may still be some chance of recovery of the outstanding debt via Debt Recovery; you would see this as a loan payment against the existing loan.