SEPA reason codes: what the return codes on your direct debits mean
Last updated: 27 October 2026
If a direct debit cannot be collected, your bank debits the amount back and gives a return code: four characters such as AM04 or MD06. This page explains what each code means, what you can do and which deadlines apply.
At a glance
- Common codes are AM04 (insufficient funds), MD06 (refund requested by the payer), AC04 (account closed), MD01 (no valid mandate) and MS03 (reason not specified; some banks use it for insufficient funds).
- Under SEPA Core the payer can request a refund for 8 weeks, or for 13 months if there was no valid mandate. Under SEPA B2B there is no refund right for authorised collections.
- If the bank rejects the whole file when you upload it, that is not a return code but an error in the file.
Where the return code appears
You will find the code in the transaction description of the return. On the bank statement of an association that collected its November membership fees, it can look like this:
| Date | Transaction | Amount EUR |
|---|---|---|
| 3 Nov | SEPA direct debit collection, 214 itemsMembership fees 11/2026 | +8,560.00 |
| 6 Nov | SEPA direct debit returnMandate M-0412, membership fee 11/2026Return reason AM04 Insufficient funds | −40.00 |
| 6 Nov | Return fee | −3.00 |
All return codes at a glance
The codes are the same throughout the SEPA direct debit schemes. The table shows what each code means and what you can do as the creditor. “Payer” means the debtor, whose account is debited.
| Code | Meaning | What you can do |
|---|---|---|
| AC01 | Incorrect IBAN | Ask the payer for the correct IBAN and have the change confirmed. |
| AC04 | Account closed | Ask the payer for the new IBAN and have the change confirmed. |
| AC06 | Account blocked, by the bank or by the account holder | Contact the payer and agree on another payment method. |
| AC13 | Account not suitable for this collection, e.g. a consumer account for a B2B direct debit | Ask for a business account. The payer must register the B2B mandate with their bank. |
| AG01 | Direct debit not allowed on this account, e.g. a savings account | Ask for the IBAN of a current account. |
| AG02 | Wrong type of collection or wrong format, e.g. a one-off mandate used again | Check the sequence type. A mandate for a one-off collection (OOFF) is valid for one collection only; for further collections you need a mandate for recurrent collections. |
| AM04 | Insufficient funds | Contact the payer. Send an invoice or resubmit the direct debit later. |
| AM05 | Duplicate collection | Check whether the first collection has already been processed. |
| BE05 | Creditor identifier incorrect, or changed without the change being indicated | Use the creditor identifier from your direct debit agreement and resubmit. |
| CNOR | Creditor's bank not reachable under this BIC | Contact your bank. |
| DNOR | Payer's bank not reachable under this BIC, e.g. because it does not offer B2B direct debits | Contact the payer or your bank. |
| ED05 | Settlement between the banks failed | Contact your bank. |
| FF01 | Invalid or incomplete format | Check the file and contact your bank. |
| MD01 | No valid mandate | Do not collect again without a valid mandate. Obtain a new mandate; for B2B the payer must register it with their bank. |
| MD02 | Mandate data missing or incorrect | Check the mandate reference and signature date; for B2B also the registration with the payer's bank. |
| MD06 | Refund requested by the payer | Contact the payer. |
| MD07 | Payer deceased | Stop collecting and update your records. |
| MS02 | Refused by the payer | Contact the payer and agree on another payment method. |
| MS03 | Reason not specified; may also mean insufficient funds | Contact the payer. |
| RC01 | Incorrect BIC | Check the BIC. For direct debits within the EEA the IBAN is sufficient. |
| RR01 | Payer's account or identification missing (regulatory reason) | Resubmit with complete details. |
| RR02 | Payer's name or address missing (regulatory reason) | Resubmit with the name and, if required, the address. |
| RR03 | Your name or address as creditor missing (regulatory reason) | Resubmit with complete details. |
| RR04 | Regulatory reason | Contact your bank. |
| SL01 | Specific service of the payer's bank, e.g. a direct debit block or a maximum amount | Contact the payer. |
The most common codes explained
AM04: insufficient funds
There was not enough money in the payer's account. Contact the payer. You can send an invoice or resubmit the direct debit later. Announce a new collection with amount and date in advance (pre-notification, at least 14 calendar days before unless agreed otherwise). Your bank usually charges a fee for each return; you will find the amount in its list of charges. Some banks, for example in Germany, report insufficient funds as MS03 instead of AM04.
MD06: refund requested by the payer
The payer has asked their bank for a refund. Under the SEPA Core scheme the payer can do this within 8 weeks of the debit without giving a reason. The refund does not affect whether the payer owes you the amount. Under the SEPA B2B scheme this refund right does not exist. Ask the payer why they requested the refund and how they will pay.
MS03: reason not specified
The payer's bank gives no reason. In some countries, banks withhold certain return reasons on data protection grounds. Sparkasse KölnBonn in Germany, for example, reports insufficient funds (AM04) and the death of the account holder (MD07) as MS03. Contact the payer and keep in mind that one of these reasons may be behind it.
AC04: account closed
The account no longer exists. Ask the payer for their new IBAN and have the change confirmed in writing. In your next direct debit the mandate amendment must be indicated in the file.
AC01: incorrect IBAN
The IBAN is wrong. Ask the payer for the correct IBAN and have the change confirmed. You can spot a typo in an IBAN in advance with the free check: it verifies the check digits of every IBAN.
MD01: no valid mandate
There is no valid mandate. Either none was given, or it has expired because no direct debit was collected under it for 36 months. For a collection without a valid mandate the payer can request a refund up to 13 months after the debit. For B2B direct debits, MD01 often means that the payer has not registered the mandate with their bank.
MD07: payer deceased
The account holder has died. Stop collecting, update your records and settle open amounts in another way.
SL01: specific service of the payer's bank
The payer's bank did not pay the direct debit because of an arrangement with the payer, for example a block on your creditor identifier or a maximum amount. Contact the payer.
Reject, return and refund (R-transactions)
A direct debit can come back in three ways. The codes come from the same list; what differs is the timing.
| Type | Who and when | Typical reasons |
|---|---|---|
| Reject | Your bank or the payer's bank, before the debit | Wrong IBAN, invalid format, account closed |
| Return | The payer's bank, shortly after the due date | Insufficient funds, account blocked, direct debit block |
| Refund | At the payer's request: SEPA Core up to 8 weeks after the debit, without a valid mandate up to 13 months | MD06, MD01 |
Errors such as a wrong IBAN or missing mandate data can be found before you submit the file. The free check verifies the check digits of every IBAN and checks the creditor identifier, mandate reference and signature date.
Frequently asked questions
What is a returned direct debit?
A direct debit that the payer's bank did not pay or that the payer asked to have refunded. Your bank debits the amount back from your account and gives a four-character return code, for example AM04.
How long can a direct debit be returned?
Under SEPA Core the payer can request a refund within 8 weeks of the debit without giving a reason. If there was no valid mandate, they can request it up to 13 months after the debit. Under SEPA B2B there is no refund right for authorised collections.
Can I collect again after a return?
After AM04 (insufficient funds) you can resubmit the direct debit, preferably after contacting the payer. Announce the new collection with amount and date in advance; unless agreed otherwise, at least 14 calendar days before. After MD01, MD06, MS02 or AC04 you should not collect again without clarifying the situation: without a valid mandate, against the payer's will or from a closed account the direct debit will usually come back again.
Where do I find the return code?
In the transaction description of the return on your bank statement or in the transaction details in online banking. If you process your transactions electronically (camt.053 or camt.054), the code is in the return reason field.
My bank rejects the whole file. Is that also a return code?
No. A return code concerns one direct debit. If your bank rejects the whole file when you upload it, the error is in the file itself, for example in the format or the totals. Check the file for free; you see at once where the error is.
Sources
- European Payments Council: 2025 SDD Core Rulebook, version 1.1 – rules of the SEPA Core scheme, deadlines, pre-notification
- European Payments Council: 2025 SDD B2B Rulebook, version 1.1 – rules of the SEPA B2B scheme
- Sparkasse KölnBonn: SEPA-Rückgabe-Codes bei Lastschriften – in German; AM04 and MD07 reported as MS03 for data protection reasons
- Atlar: Errors & Return Reasons – MS03 where national rules restrict codes; 8 weeks and 13 months