It is possible that a direct debit transaction has failed. A direct debit transaction due to, for example, insufficient funds can be returned as unsuccessful up to 5 working days after the direct debit date.

If you are curious about the exact reasons for this, then it is possible to request them. You will then receive a reason code. The reason code explains why a failed direct debit transaction has taken place.

These are the most common reason codes as determined by the European Payments Council. This document also contains the follow-up actions for failed European direct debits.

Reason code

Reasoning

AC01

Incorrect IBAN number. You can ask for a correct IBAN number!

AC04

Closed IBAN number. You can ask for a different IBAN number!

AC06

Blocked IBAN number. You can ask for a different IBAN number!

AG01

A direct debit from this IBAN number is blocked. You may be trying to collect money from a savings account. You can ask for a different IBAN number!

AG02

The details of the collection are not correct. For example, you specified that the transaction is an initial payment (FRST) instead of a recurring payment (RCUR). Or maybe you have forgotten a unique authorization number?

AM04

Insufficient balance on the IBAN number. You can try to collect once more or ask for a different IBAN number!

MD01

The direct debit turns out to be invalid. This may be because no first transaction has taken place (FRST), because the authorization has expired, or because there is no authorization at all. You can try the direct debit again through an FRST transaction or contact the customer.

MD06

The collection has been reversed. We call this a cancellation. It can be reversed within 56 days of the direct debit. You can contact the customer if you do not know why a reversal has taken place.

MD07

The customer has passed away. This reason may be indicated by an MS03 (other reasons). In this case, no longer carry out direct debits.

MS03

MS03 is used for other reasons. MS03 is also sometimes used for reasons for which there is already another code, such as insufficient balance. You can contact the customer if you do not know why a failed collection has taken place.

SL01

The bank has refused this direct debit. This may be because the IBAN number has been blocked for direct debits and/or that a limit has been reached. You can contact the customer if you do not know why a failed collection has taken place.

If you want more information about the other reason codes, including an explanation regarding the next steps, we recommend that you take a look at the 'European Payments Council' document.

For all other articles about Recurring & SEPA direct debits, click here.

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