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Direct Debit Issues (R-Transactions)

Introduction

Like any payment method, SEPA Direct Debit may experience unsuccessful transactions. These are called R-transactions. There are 4 types of R-transactions that can happen at various stage of the SEPA Direct Debit timeline (SDD Flow article here).

R-transactions

  • Reject (REJ): The debtor bank rejects the SEPA Direct Debit (SDD). This may happen if the bank account is closed, invalid or does not exist. A SDD can have the status REJ between D-0 and D+5.

 

  • Return (RET): The debtor bank returns the SDD because there was an issue while processing the SDD. The vast majority of returns are because of insufficient funds on the debtor account. A SDD can have the status RET at D-0 only.

 

The R-transactions can have various root causes. Here is an overview of the most common type of R-transactions:

(These reason codes are extracted from the EPC guide on R-transactions)

Code Reject Return Refund Reason specified in the Rulebook Suggested Creditor action
AC01 YES YES   Account Identifier incorrect (i.e. invalid IBAN of the Debtor)
  • Contact the Debtor in order to confirm the correctness of the Debtor's IBAN
  • In case of mandate amendment: check the data provided by the Debtor
  • Verify the database used for the BBAN conversion into IBAN
AC04 YES YES   Account closed
  • Contact the Debtor for the new account
AC06 YES YES   Account blocked
  • Contact the Debtor for alternative account/solution to pay
AC13 YES YES   Debtor account is a consumer account (For SDD B2B collections only)
  • Contact the Debtor for clarification and to agree on another means of payment
  • Conclude SDD Core mandate with Debtor
AG01 YES YES   Direct Debit forbidden on this account for regulatory reasons
  • Contact the Debtor in order to get information about the payment account to be used
AG02 YES     Operation code/transaction code/sequence type incorrect, invalid file format
  • Correct the wrong information
AM04 YES YES   Insufficient funds
  • Contact the Debtor to ensure that the Debtor provides funds on his account
AM05 YES YES   Duplicate collection
  • Check if the collection is really duplicated
BE05 YES YES   Identifier of the Creditor Incorrect
  • Correct the CI
CNOR YES     Creditor Bank is not registered under this BIC in the CSM
  • Creditor to contact the Creditor Bank
DNOR YES     Debtor Bank is not registered under this BIC in the CSM
  • Ask the Creditor Bank for checking the reachability of the Debtor Bank
  • Contact Debtor to agree on another means of payment
FF01 YES     File format incomplete or invalid
  • Repair the XML file
FOCR YES     Following a cancellation request (by the creditor)  
MD01 YES YES YES
No mandate
(For SDD Core collections only)
No mandate or unable to obtain mandate confirmation from the Debtor
(For SDD B2B collections only)
Unauthorised Transaction
(For Refunds of SDD Core collections only)
  • To analyse the characteristics of the SDD transaction
  • To contact the Debtor in case of refund
MD02 YES     Mandate data missing or incorrect
  • To repair the way to amend the mandate information or the amended information
MD06     YES Disputed authorized transaction
(For SDD Core collections only)
  • To contact the Debtor
MD07 YES YES   Debtor Deceased
(Only for SDD Core collections)
  • To close the agreement with deceased Debtor
MS02 YES YES   Refusal by the Debtor
  • To contact the Debtor
MS03 YES YES   Reason not specified
  • To contact the Debtor
RC01 YES YES   Bank Identifier (BIC) Incorrect
  • To contact the Debtor for the correct BIC
RR01 YES YES   Regulatory Reason
  • To repair the SDD collection in order to complete the Debtor account information
  • To contact the Creditor Bank
RR02 YES YES   Regulatory Reason
  • To repair the SDD collection in order to complete the Debtor name information
  • To contact the Creditor Bank
RR03 YES YES   Regulatory Reason
  • To repair the SDD collection in order to complete the Creditor name information
  • To contact the Creditor Bank
RR04 YES YES   Regulatory Reason
  • To contact the Creditor Bank
SL01 YES YES   Specific Service offered by the Debtor Bank
  • To contact the Debtor

Find out more technical details about R-transactions codes here or on the EPC website.  

If you want to learn more about the subject, read our blogpost here

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