What happens if a direct debit fails?
We’ll receive a notification of a Direct Debit failure within 24 hours of when the payment was due to be received, along with the cause.
At this point, we’ll notify you, so that you can speak to the client, arrange for the collection to be re-presented the following month (if appropriate), and perhaps to arrange a one-off bank transfer in the meantime.
Why might it have failed?
There are a number of reasons a Direct Debit might fail. In our experience, it’s most commonly because there aren’t sufficient funds in the client’s account; they’ve cancelled the mandate; or that the mandate hasn’t been properly set up because the bank in question doesn’t support Direct Debits.
If a Direct Debit payment fails, we’ll receive a report which lists one of twelve possible reasons, listed below:
- Refer to payer – the bank isn’t in a position to pay the Direct Debit, probably because there are insufficient funds in the client’s account
- Instruction cancelled – either by the bank or the client
- Payer deceased
- Account transferred – the account has been transferred to a new bank
- Advance notice disputed – the client disputes the time, amount or frequency of the Direct Debit instruction and has asked for the single payment to be cancelled
- No account or wrong account type – the account number isn’t recognised by the bank
- No instruction – the bank doesn’t recognise the DD mandate
- Amount differs – the client is suggesting that the amount that’s been collected is different to that shown in the DD instruction
- Amount not yet due – the client is suggesting that the collection date is in advance of the due date specified in the advance notice to the payer
- Presentation overdue – the client is suggesting that the collection date is more than three working days after it was due to be collected
- Service user differs – the company collecting the payment is different to the one shown on the Direct Debit Instruction
- Account closed – the client has closed their account for an unknown reason