Failing to act on these notifications promptly can lead to missed payments, customer dissatisfaction, and compliance issues. This guide breaks down each ADDACS code, including ADDACS code 1, and explains what action you should take.
ADDACS reason codes
Here’s a breakdown of the most common ADDACS reason codes, what they mean and what to do:
| ADDACS code | What it means | What to do |
| 0 - Instruction cancelled – Refer to payer | The bank cancelled the DDI. | You cannot collect via Direct Debit on this account. If collections should continue, obtain a new DDI for a different account. |
| 1 - Instruction cancelled by payer | The payer requested that their bank cancel the DDI. | Liaise with the payer to agree on how to collect any outstanding payments. |
| 2 - Payer deceased | The account holder has passed away. | Cease collections and follow your bereavement process. |
| 3 - Account transferred to a new bank | The payer switched banks. | If both old and new details are quoted, amend your records and send a 0N to lodge the new instruction. If only old details are mentioned, pause collections and obtain a new DDI. |
| B - Account closed | The payer closed their account. | Obtain a new DDI for a different account before collecting. |
| C - Account transferred to a different branch | New account details supplied. | Update your data file and continue collecting. Do not send a 0C/0N pair. |
| D - Advance notice disputed | Payer disputes the time, amount, or frequency of the advance notice. | Pause collections until the dispute is resolved with the payer. |
| E - Instruction amended | The bank has amended the DDI. | Collect using the new details. Do not send a 0C/0N pair. |
| R - Instruction reinstated | The bank reinstated a previously cancelled DDI (within 2 months). | Resume collections under the reinstated instruction. |
Why prompt action matters
ADDACS reports are typically available the day after a change is made. Acting on them immediately helps you:
- Avoid failed collections
- Maintain compliance with Bacs scheme rules
- Improve customer experience
- Reduce administrative overhead
ADDACS Code 1: A closer look
ADDACS code 1 is one of the most common and critical notifications. It means the payer has cancelled the Direct Debit Instruction. This could be due to a dispute, a change in payment method, or simply a decision to stop using Direct Debit.
What to do:
- Contact the payer to understand the reason
- Agree on a new payment method if needed
- Do not attempt further collections without a valid DDI
Best practices for managing ADDACS reports
To stay compliant and efficient:
- Automate ADDACS report retrieval via your Bacs software
- Review reports daily and act within 3 working days
- Train your finance team on ADDACS codes and procedures
Stay ahead with ADDACS code management
Understanding and responding to Bacs reason codes, including ARUDD, AUDDIS and ADDACS is vital for any organisation using Direct Debit. Whether it’s ADDACS code 1 or a less common notification, timely action ensures smooth payment operations and customer trust. Need help updating your Direct Debit processes? Explore our Direct Debit solutions or book a demo.
FAQs
What are ADDACS reason codes in Bacs Direct Debit?
ADDACS reason codes are notifications from Bacs that inform service users when a Direct Debit Instruction (DDI) has been amended or cancelled. These codes help organisations manage payment changes and maintain compliance.
What does ADDACS code 1 mean?
ADDACS code 1 means the payer has cancelled their Direct Debit Instruction. Organisations should contact the payer to agree on a new payment method and avoid further collections without a valid DDI.
How should I respond to ADDACS code 0?
ADDACS code 0 indicates the bank has cancelled the DDI. You must stop collecting via Direct Debit and obtain a new instruction if payments should continue.
Can I still collect payments after receiving ADDACS code B?
No. ADDACS code B means the payer has closed their account. You’ll need to obtain a new Direct Debit Instruction for a different account before resuming collections.
Why is it important to act on ADDACS notifications quickly?
Prompt action helps avoid failed payments, ensures compliance with Bacs rules, improves customer satisfaction, and reduces admin workload.
What should I do if the payer disputes the advance notice ADDACS code D?
Pause collections immediately and resolve the dispute with the payer before continuing. This ensures compliance and protects customer relationships.
How can I automate ADDACS report handling?
Use Bacs-compatible software to retrieve ADDACS reports daily. Automating this process helps ensure timely responses and reduces manual errors.
Is ADDACS reporting relevant for public sector organisations in the UK?
Yes. Any UK organisation using Direct Debit, including councils and public sector bodies, must manage ADDACS reports to maintain payment integrity and compliance.
What happens if I ignore ADDACS reason codes?
Ignoring ADDACS notifications can lead to failed collections, customer complaints, and potential breaches of Bacs scheme rules.