> ## Documentation Index > Fetch the complete documentation index at: https://knowledge.uportal360.com/llms.txt > Use this file to discover all available pages before exploring further. # Recourse ## Recourse + Buybacks Part of our relationship with clients is having a strategic plan in place for the 'what ifs'. The following article will give you a high level perspective of buybacks and recourse, what they mean and what to expect. ## Definitions ### Buyback Buybacks occur when contracts are either canceled/refunded or when required to be repurchased by the Retail Seller due to reasons that fall within the parameters of the recourse defined in their client agreement. In simple terms, the Retail Seller has to buyback the contract from the entity that owned/purchased the contract. The Financial Program Services (FPS) team manages the buyback lifecycle process from buyback origination to legal department handoff. The performance of buyer and client portfolios is dependent on the ability to identify and resolve all unpaid buybacks in a timely and satisfactory manner.​ ### Recourse Recourse is a legal agreement that gives UAS or the Funding Participant the right to pledged collateral if the borrower is unable to satisfy the debt obligation. > What Is Recourse? > A recourse is a legal agreement that gives the lender the right to pledged collateral if the borrower is unable to satisfy the debt obligation. Recourse refers to the lender's legal right to collect. Recourse lending provides protection to lenders, as they are assured of having some repayment, either in cash or liquid assets. Companies that use recourse debt have a lower cost of capital, as there is less underlying risk in lending to that firm. [Investopedia - Recourse](https://www.investopedia.com/terms/r/recourse.asp) #### Reserve Fund A Client Reserve Fund is an amount of money that is held back from the proceeds of the Assignment. If the reserve is client-owned, then the client has uPortal360 [ reports](/uportal-guide/reports-and-reconciliation/reserve-invoice) to give them access to all information on the reserve. Client Reserves are essentially a supplement to the Merchant Discount. This allows a Retail Seller to still recieve the amount held back provided the program's delinquency is better than expected. ### Recourse Roles | Title | Role | | ------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------- | | Funding Participant | Entity that purchases contracts from Retail Sellers (Clients). E.g. Universal Guardian Acceptance, Silver Leaf Acceptance, JCAP, SIMS, etc.)​​ | | Servicing Company | Universal Account Servicing​ it the Third-Party Servicing Company | | Client or Merchant | Retail Seller that originates contracts to consumers | | Consumer | Customer receiving financing and agrees to repayment terms and conditions | #### Buyback Terms Agreement The arranagement for buybacks is defined in the client agreement. Please review your companies agreement for details. #### Unpaid Buyback Customized arrangements will be made between client & Financial Program Services (FPS) on how to resolve unpaid buybacks and determine actions. Unpaid balances will be assigned to the client. The following statuses are used to identify unpaid buybacks | Status | Definitions | | ---------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | New Placement | Apply proceeds from new assignments to buybacks​ that will show up on the Assignment invoice | | ACH Pull | Needs client Authorization – We can initiate ACH payment request​ | | Client-Initiated – Check/ACH | ACH Payment initiated by the client​. Checks should be avoided if possible | | Offset to Reserve​ | value is moved into the reserve account | | Sent to Legal, Demand Letter | Indicates that we have sent the client to commercial collections​. The client still needs to pay us if reserve amounts are deemed bad debt​ and anything outside of recourse would be covered by reserve​ | | Servicing Proceeds | We take servicing proceeds to cover their buyback This is reflected on client invoices | #### Client Communication This is the type of communication a client can expect with buybacks. | When | Format | Communication | Purpose | | ------------------------------------------- | ----------------------------- | ----------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | Every Monday | Email from FPS | Client Summary Reports​ | includes Delinquency, Chargebacks, Autopay Removals, and Open Support Tickets​ | | Every Thursday | Email from FPS | Buyback Invoices​ | Shows all Buybacks that have already been initiated​ | | After Launch | Reporting / Recourse Training | PDF Document | Buyback Resolution Form will be signed that indicates the client understands recourse and unpaid buyback arrangements.​ | | As Requested | Custom Requests | Varies | If the client has a request, it's asked to create a case to be reviewed | | When First Contract Hits Recourseable Event | Phone Call | Verbal Notice of Obligation to Repurchase | Client will be informed that their contract has gone in to a recourseable status, and how you can resolve delinquency to prevent the contract from progressing into a buyback. | | 10 Days Before Buyback Will Occur | Email | Notice of Obligation to Repurchase | Client will be informed that they will be "repurchasing" or buying the contract back, with a 10 day notice to resolve delinquency before the buyback is executed. | #### Consumer Communication This is the type of communication a consumer can expect to receive | When | Format | Communication | Purpose | | ----------------------------------------------------------- | ---------------- | -------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | Once weekly, When consumer account hits 90+ Days Delinquent | Sent by uSupport | Right to Cure Notice | allows one party in a contract, who has defaulted under a contract provision, to remedy their default by taking steps to ensure compliance or otherwise, cure the default | #### Related Articles [Reserve Invoice](/uportal-guide/reports-and-reconciliation/reserve-invoice) [Cases](/support-tickets-and-contract-changes/support-cases) [Client Support](/support/client-help)