DFC guides – Direct Debit reports and messages

When you are using Direct Debit, you may receive several messages, reports, or updates from Bacs. These could be anything from notifications about changes in your Direct Debit Instructions, Direct Debit indemnity claims, or notifications about payment failures. Knowing what messages you can expect to receive will help you know how to deal with them.

Messages from Bacs

If the banking system has any messages or notifications for you, they will make new reports available to you at 6 am each working day. You can either download these manually from the Bacs payment services site or your Direct Debit software can download them automatically.

 

What are Bacs reports?

Bacs reports are reports regarding your Direct Debit Instructions, payment requests, or anything else related to your Direct Debit collections. Each notification type will generate a separate report and contains a line for each event of that type.

There are several different messages that you could receive from Bacs.

 

Direct Debit Instruction notifications

There are two different types of notifications you can receive about DDI. These are in AUDDIS (Automated Direct Debit Instruction Service) or ADDACS (Automated Direct Debit Amendment and Cancellation Service) message form.

 

AUDDIS Reports

AUDDIS messages are to do with setting up and cancelling DDI. If there have been any problems setting up or cancelling a Direct Debit Instruction, you may receive this type of message.

These usually come from your customer’s bank three working days after a DDI is submitted (for more information on Direct Debit timelines, see our guide). In some cases, though, an AUDDIS message can be sent immediately. This is usually when Bacs has identified a problem with your payment submission before it’s been sent to your customer’s bank.

You may receive an AUDDIS message for a variety of reasons.

 

There are errors in the bank account details that you provided

 

Code Bacs reason for failure Details
2 Payer deceased This is very rare. This error code means that you have tried to set up a DDI on the account of someone deceased.
3 Account transferred You have tried to set up a DDI using a customer’s old bank details. You will have to submit a brand new DDI using their new details.
5 No account The account number that your customer has used doesn’t match any bank details at their specified branch. Their branch is identified via their sort code.
B Account closed You have attempted to set up a DDI on a closed account.
C Account transferred This is similar to error code 3, but the customer has provided new bank details. You can just update your DDI and don’t need to resubmit.
L Incorrect payer’s account details The sort code and account number provided by your customer has failed the “modulus check” top check whether they’re possibly valid. This is a publically available test which you can also conduct yourself before submitting to Bacs.

 

There are errors in the DDI or errors in the way you submitted it

 

Code Bacs reason for failure Details
7 DDI amount is not zero The ‘amount’ of any DDI submission should be zero as DDIs are always for an unlimited amount.
I Payer reference is not unique The reference field on the DDI you have submitted is already being used for another DDI you have with the same customer.
M Transaction code/user status is incompatible Transaction codes have been submitted which are not allowed whilst the customer is in this status. This is only an issue when converting from standing orders to Direct Debit.
O Invalid reference The reference field on the DDI doesn’t comply with AUDDIS rules. For example, when special characters have been used.
P Payer’s name not present A name for the payer hasn’t been included in the DDI.
Q Service user’s name blank You haven’t put your business name down on the DDI.

 

Direct Debit Instructions can’t be set up on the account you’ve requested

 

Code Bacs reason for failure Details
F Invalid account type The account is a type which can’t have DDIs set up on them. Some savings accounts, for example, can’t have DDIs set up on them.
G Bank will not accept Direct Debits on the specified account Direct Debits are disabled for this specific account. This could be because the customer has specifically requested this.
N Transaction disallowed at customer’s branch Direct Debits can’t be collected from the customer’s sort code. This sort code could be reserved for savings accounts, for example.

 

Errors cancelling a DDI

 

Code Bacs reason for failure Details
1 Instruction cancelled by payer This error code is often received when cancelling a DDI which has already been cancelled by the customer. They can also be sent if a customer cancels their DDI soon after set up, though this is rare.
6 No instruction There was no DDI to cancel which matched the details you gave.
H Instruction has expired The DDI you requested to cancel has already expired.
K Instruction cancelled by customer’s bank The DDI you are trying to cancel has already been cancelled by the paying bank.

 

ADDACS Reports

ADDACS messages are to do with customer amendments or cancellations to DDIs. You cannot control or avoid these in the same way as you may be able to with AUDDIS messages, as they are triggered by your customers and not by you. Still, some of them require you to take further action so you should still pay attention to these.

ADDACS messages neatly fall into those relating to amendments and those regarding cancellations.

 

The DDI has been amended

 

Code Bacs reason for failure Details
3 Account transferred to a new bank or building society The customer has transferred their account to a new bank. This particular code means that they have new bank details, which you will need to send a new DDI to.
C Account transferred to a different branch of their bank or building society Same as above, but this code means that you can just update your records of the DDI instead of submitting a new one.
E Instruction amended You customer has changed some details on their DDI, such as their name. You should update your records but you don’t need to send a new DDI.
R Instruction re-instated A previously cancelled DDI has been re-instated by your customer’s bank.

 

The DDI has been cancelled

 

Code Bacs reason for failure Details
0 Instruction cancelled – refer to payer Encompasses all cancelled instructions.
1 Instruction cancelled by payer Your customer’s bank has cancelled the DDI at the customer’s request.
2 Payer deceased Your customer is unfortunately deceased.
B Account closed Your customer has closed their bank account, thus cancelling your DDI.
D Advance notice disputed Your customer has notified their bank that they dispute the amount of notice you have specified for their DDI. Further payments should not be taken until the dispute has been resolved.

 

Payment request notifications

You may also receive notifications about payment requests you’ve submitted. These messages are usually received as either ARUDD (Automated Return of Unpaid Direct Debit) or DDICA (Direct Debit Claim Advice) messages. If your payment requests are successful, you won’t receive any of these messages from Bacs. However, if they are unsuccessful, you may receive either type depending on the reason.

 

ARUDD Reports

ARUDD messages are to do with automatic faults with payment requests. You can mostly avoid these kinds of messages by following simple processes, which will be shown in the below lists of failure reasons.

 

Customer has insufficient funds

 

Code Bacs reason for failure Details
0 Refer to payer The payer’s bank could not pay the Direct debit. This is usually due to insufficient funds and constitutes 90% of the ARUDD messages you’ll probably ever receive. You should contact your customer and arrange to try taking the payment again.

 

Mandate is not up to date

 

Code Bacs reason for failure Details
1 Instruction cancelled The DDI which you tried to collect payment against has been cancelled.
2 Payer deceased Your customer is sadly deceased and their DDI will also have been cancelled.
3 Account transferred Your customer’s DDI has been transferred over to a new bank account, but you tried to submit a payment request to the old account.
5 No account/wrong account type The customer’s bank didn’t recognise the account number you submitted, so it’s probable that there’s no DDI set up.
6 No instruction There’s no DDI set up.
B Account closed Your customer’s closed their bank account so their DDI has been cancelled.

 

Payment request submission contains mistakes

 

Code Bacs reason for failure Details
8 Amount not yet due This is either caused by submission of a payment request before a DDI is fully set up (less than 2 working days after submission) or when you try to take a payment before the date which your customer was notified of.
9 Presentation overdue You tried to collect a payment too late – more than 3 working days after the date which you notified your customer of.
A Service user differs Your details don’t match the details on the customer’s DDI.

 

Your customer disputes payment

 

Code Bacs reason for failure Details
4 Advance notice disputed The customer disputes having been notified of this Direct Debit.
7 Amount differs The customer disputes the amount taken is different from the amount they were notified of.

 

DDICA Reports

You will receive a DDICA report if an indemnity claim is raised against one of your payments.

There are a few reasons for indemnity claims, which can be neatly grouped into three problems:

  • Problems with a specific payment collection
  • Payments collected after a mandate has been cancelled
  • Problems with the payer disputing having set up a mandate

There is also a reason code for indemnity claims which the merchant can raise, making this the safest and most hassle-free way to refund a payment taken by Direct Debit. This is because the code ensures a further indemnity claim cannot be raised, so the same refund cannot be paid twice.

 

Input Reports

This will be your most common report. Every time you submit a payment request or DDI to Bacs, you’ll receive a summary report of your submission. These are Input Reports and they can be a valuable check that you’ve submitted all the correct details as you think you have. This report is the definitive version of the information that Bacs has received.

 

About DFC

DFC is part of Transaction Services Group (TSG), a leading revenue management solutions provider across Australasia, the UK, Europe, and the USA. DFC offers a full revenue management service across the customer journey. Its purpose is to drive up customer acquisition as well as manage and maximise customer revenue.

As Direct Debit experts, DFC takes pressure off organisations by handling billing, customer service and credit control, whilst offering cutting-edge solutions that benefit businesses and customers. DFC reduces the Direct Debit joining process to just three minutes for customers, whilst increasing the average length of membership by three months.

For more information on how DFC can help your business, visit debitfinance.co.uk