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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: The debtor bank rejects the SEPA Direct Debit (SDD). This may happen if the bank account is closed, invalid or does not exist.
• Refusal: There can be a refusal for a single transaction (the mandate remains valid for further transactions) or a revocation of the mandate, meaning additional transactions will be systematically refused.
• Return: 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.
• Refund: Between D and D+8 weeks, the debtor can ask for a refund without any justification. Between D+8 weeks and D+13 months, the debtor can only initiate a refund in the case where they claims to never have signed a mandate.

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				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				Account closed	Contact the Debtor for the new account
AC06				Account blocked	Contact the Debtor for alternative account/solution to pay
AC13				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				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				Operation code/transaction code/sequence type incorrect, invalid file format	Correct the wrong information
AM04				Insufficient funds	Contact the Debtor to ensure that the Debtor provides funds on his account
AM05				Duplicate collection	Check if the collection is really duplicated
BE05				Identifier of the Creditor Incorrect	Correct the CI
CNOR				Creditor Bank is not registered under this BIC in the CSM	Creditor to contact the Creditor Bank
DNOR				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				File format incomplete or invalid	Repair the XML file
FOCR				Following a cancellation request (by the creditor)
MD01				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				Mandate data missing or incorrect	To repair the way to amend the mandate information or the amended information
MD06				Disputed authorized transaction (For SDD Core collections only)	To contact the Debtor
MD07				Debtor Deceased (Only for SDD Core collections)	To close the agreement with deceased Debtor
MS02				Refusal by the Debtor	To contact the Debtor
MS03				Reason not specified	To contact the Debtor
RC01				Bank Identifier (BIC) Incorrect	To contact the Debtor for the correct BIC
RR01				Regulatory Reason	To repair the SDD collection in order to complete the Debtor account information To contact the Creditor Bank
RR02				Regulatory Reason	To repair the SDD collection in order to complete the Debtor name information To contact the Creditor Bank
RR03				Regulatory Reason	To repair the SDD collection in order to complete the Creditor name information To contact the Creditor Bank
RR04				Regulatory Reason	To contact the Creditor Bank
SL01				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.