Reasons for reversal of payment

Reasons for reversal of payment


Reason Description Action Moment R type
AC01 IBAN incorrect. Recover IBAN or ask debtor for the right IBAN. D+1 Reject, Return
AC04 Account holder has closed the account. Ask debtor for the right IBAN D+1 Reject, Return
AC06 1-Bank of debtor has blocked account for direct debit. If an eMandate was issued, this indicates that the debtor no longer wishes to continue with the authorisation under this eMandate. -2-Account holder has blocked account for direct debit-3-Account holder is a minor. Contact the debtor. Note: If an eMandate was issued, discuss with the debtor why the direct debit was blocked. D+1 Reject, Return
AC13 (B2B) Business account holder has specified a private debit account. Account cannot be used for business direct debits. Contact the debtor. D+1 Reject, Return
AG01 Debit account is no checking account but a savings account. Account cannot be used for business direct debits. Contact the debtor. D+1 Reject, Return
AG02 -1-First, the type “FRST” was used, after the type “RCUR” had already been entered.-2-First, the type “RCUR” was used without using a “FRST” before. -3-The direct debit mandate ID that was used, had already been used for a one-off direct debit. Incorrect transaction type used: use “OOFF”, “FRST’’ or “RCUR”. Payee ID incorrect: select different ID. D+1 Reject,
Return
AM04 Balance is insufficient (sometimes a MS03). Balance is insufficient: contact the debtor. * If desired, a revised direct debit can be executed with this feedback. * The action undertaken by the banks when the balance is insufficient is explained at Resubmitted direct debit banks Van D+1 tot D+5 Reject, Return
AM05 Submitted twice. Check whether it was indeed submitted twice. D+1 Reject, Return, Reversal
BE05 Payee ID modified without amendment indication. Payee ID incorrect: submit with the right ID. D+1 Reject, Return
MD01 (core) -1- Transaction contains “RCUR”, but “FRST” has not been received yet. -2- No authorisation issued. -3- Authorisation not valid. Check your administration, determine the cause and the follow-up action: -1- Submit transaction again as “FRST” -2- Make a direct debit attempt with this authorisation again. Contact the debtor in both cases. D+1 Reject, Return, Refund
MD01 (B2B) -1- Transaction contains “RCUR”, but “FRST” has not been received yet. -2-Authorisation has not been registered at the debtor’s bank yet. -3- The direct debit is not within the specified limits. Check whether the transaction was submitted with the right sequence type. If so, contact the debtor for the right registration at the debit bank. D+1 Reject, Return, Refund
MD02 Authorisation or part of the data of the authorisation is incorrect (B2B). Contact the debtor in order to have the complete and correct authorisation, (specified limits included) registered at the debtor bank. D+1 Reject
MD06 Debtor exercises his right of reversal of payment (8 weeks). Contact the debtor. From D+1 to D+56 days and D+13 months. Refund
MD07 Debtor deceased (sometimes MS03). Do not make direct debit attempt anymore. D+1 Reject, Return
MS02 Debtor refuses direct debit transaction. Contact the debtor. From D+1 to D+56 days and D+13 months. Reject, Return, Reversal, Refusal
MS03 Insufficient balance (or other reason, for example in the event of death). Insufficient balance: contact the debtor. * If desired, a revised direct debit can be executed with this feedback. * The action undertaken by the banks when the balance is insufficient balance is explained at Resubmitted direct debit banks. From D+1 to D+5. Reject, Return, Reversal
RR01 Debtor data unknown or identification not in order. Contact your bank. D+1 Reject, Return
RR02 According to national laws, name and/or address are required, and this information is missing. Contact your bank. D+1 Reject, Return
RR03 According to national laws, name and/or address are required, and this information is missing. Contact your bank. D+1 Reject, Return
RR04 Transaction does not meet statutory requirements. Contact your bank. D+1 Reject, Return
SL01 -1- Limiting values have been exceeded. -2- Account holder has blocked account for direct debit. If an eMandate was issued, this indicates that the debtor no longer wishes to continue with the authorisation under this eMandate. Contact your debtor. Note: If an eMandate was issued, discuss the reason for the direct debit blockage with the payer. D+1 Reject, Return
PY01 Authority does not recognize account number. Ask the consumer whether the account number is correct. Also check whether this account supports SEPA Direct debits/euro payments. D+1 Reject, Return

Reversals of payment types in banking terminology

By whom Before execution After execution
Initiative by payee * Cancellation by payee (Revocation)* Cancellation request by payee (Cancellation) * Reversal by payee, within 5 working days. (Reversal)
Initiative by the bank of the payee * Refusal by payee (Refusal)* Rejection by bank of payee (Reject) * Refund by bank: within 2 or 5 working days (* Refund by payee: within 8 weeks (* Request for refund by payee at Report Unjustified Direct Debit (MOI) within 13 months (Refund)

Reasons for reversals Banks

Before settlement After settlement
-1- Reject (Transaction type: C501) -a- Rejected due to technical reasons and detected by Creditor Bank, the CSM or Debtor Bank (for exampe invalid format, incorrect IBAN check digit). -b- Debtor Bank cannot process direct debit transfer (for example account closed, direct debit blockage or account holder deceased). -c- Debtor Bank cannot process the direct debit transfer in accordance with Article 78 of the Payment Services Directive. -5- Return Refund initiated by the Debtor Bank. (Reject, Return or Refund).
-2- Refusal Refusal initiated by the Debtor. Received by Debtor Bank: -a- Before settlement, then processed as Reject (see 1) -b- After settlement, then processed as Refund (see 6) -6- Refund (Transaction type: N522) Refund initiated by Debtor. Can be executed during the ‘no questions asked period’ of 8 weeks and for ‘non-authorised transactions’ up til 13 months after the direct debit.
-3- Request for cancellation Creditor Bank requests CSM to not perform the direct debit(s). Bilateral agreement between Creditor Bank and CSM. -7- Reversal (Transaction type: C501) Reversal initiated by Creditor or Creditor Bank. Original transaction should not have been executed. Ruleboek does not oblige Creditor Banks to offer a Reversal to payees. Debtor Banks have to be able to process the transactions. Where appropriate, they do not have to perform checks.
-4- Revocation Revocation of the direct debit assignment(s) by Payee. Bilateral agreement between Creditor Bank and payee, among others within which periode this is possible.

Extraordinary reasons for reversal

The reasons below are extraordinary reasons for reversal due to incorrect bank-related data.

Reason Description R Type
CNOR Creditor Bank is not registered under this BIC in the CSM Reject
DNOR Debtor bank is not registered under this BIC in the CSM Reject
ED05 Settlement of the collection failed Reject
FF01 Invalid file format Reject
RC01 BIC incorrect/unknown Reject, Return
DDT Direct Debit Item Not available
FF01 Operation/transaction code incorrect, invalid file format Reject
FF05 Direct debit type incorrect Reject
N064 World payment OUR no BIC Reject
N633 Not in use any more - Removed from transaction list on 19-04-2016 -

Was this article helpful?

What's Next