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Direct Debit

ARUDD reason codes: Automated return of unpaid direct debit

Receiving failed Direct Debit notifications can be frustrating and disruptive to your cash flow. Understanding why Direct Debits fail, and how to resolve each type quickly, is crucial for maintaining healthy payment collection rates and strong customer relationships.

ARUDD (Automated Return of Unpaid Direct Debit) reports detail any Direct Debit payment that couldn't be processed by the paying bank. Based on our experience processing over 160 million transactions annually, we see these failures impact businesses daily - but with the right knowledge, most can be resolved efficiently. 

Business Advice FAQs

Posted 28/09/2022

ARUDD Reason Codes

What is ARUDD and why do direct debits fail? 

ARUDD reports are usually generated within hours of a collection attempt but can take up to 2 working days and provide specific reason codes explaining why a payment failed. Understanding these codes helps you take the right action quickly, whether that's contacting the customer, updating account details, or waiting to retry. 

Key terms explained: 

  • PSP (Payment Service Provider)

    The bank or financial institution processing the payment 

  • DDI (Direct Debit Instruction)

    The mandate giving you permission to collect payments 

  • AUDDIS (Automated Direct Debit Instruction Service)

    The system for setting up Direct Debit mandates electronically 

Complete ARUDD reason codes reference 

Code Reason  Circumstances  Recommended action 
0 Refer to payer  The paying PSP cannot process the payment, or legal action (Garnishee Order, bankruptcy, liquidation) prevents payment  Most common code: Contact customer within 5 days. Can represent up to one month from original processing day if customer confirms payment ability 
1 Instruction cancelled  Customer or their bank cancelled the Direct Debit mandate  Action required: Must obtain new DDI before collecting further payments. Contact customer to arrange alternative payment method 
2 Payer deceased  Account holder has passed away  Sensitive handling: Stop all future collections immediately. Follow your deceased customer procedures 
3 Account transferred  Customer moved to a new bank or building society  Common issue: Check if you received new bank details notification. If not, contact customer for new account information and set up fresh DDI 
4 Advance notice disputed  Customer disputes the timing, amount, or frequency of the advance notice  Compliance critical: Stop all collections until dispute resolved. Review your advance notice procedures 
5 No account (OR wrong account type)  Account number not recognised or account type incompatible with Direct Debit  Data issue: Verify account details with customer. May need new DDI with correct account information 
6 No Instruction  Bank has no record of the Direct Debit mandate  Setup issue: Check your DDI records and contact customer to confirm mandate was properly established 
7 Amount differs  Collected amount doesn't match the advance notice sent to customer  Process issue: Suspend collections until resolved. Check your payment submission process 
8 Amount not yet due  Payment collected before the due date specified in advance notice  Timing issue: For AUDDIS users: ensure at least 2 working days between DDI lodgement and first collection 
9 Presentation overdue  Payment presented more than 3 working days after due date (fixed DDI) or advance notice date, OR re-presentation more than one month from original processing day  Process issue: Must provide fresh advance notice to customer before collecting payment. Review your payment timing procedures 
A Service user differs  Your identity doesn't match what's on the DDI  Rare issue: Contact your bank or Bacs bureau to resolve identity mismatch 
B Account closed  Customer closed their account  Follow-up required: Contact customer for new account details if payments should continue 

Source: Bacs Payment Schemes Limited - Direct Debit Scheme Rules 

The key to minimising ARUDD impact is speed of response.  Whether through automated represents or workflow systems that trigger immediate customer contact, organisations responding within 24 hours can achieve higher resolution rates.

Jon Reynolds, Head of Product Access PaySuite 
ARUDD Reason Codes

Step-by-step ARUDD resolution process 

Immediate actions (within 24 hours) 

  1. Review the ARUDD report:

    Identify all failed payments and codes 

  2. Categorise by urgency:

    Prioritise codes 1, 4, 7, 8 (require immediate attention) v

  3. Update customer records:

    Mark accounts to prevent further collection attempts 

  4. Prepare customer communications:

    Use appropriate messaging for each code type 

Customer contact strategy (days 1-3) 

For codes 0, 1, 3, 5, 6, B: 

  • Phone contact within 48 hours for high-value customers 
  • Email/letter within 3 days for all others 
  • Offer immediate resolution options 
  • Document all customer interactions 

For codes 2, 4, 7, 8, 9: 

  • Follow compliance procedures first 
  • Formal written communication required 
  • Allow appropriate response time before retry 

Resolution and retry timeline 

  1. Immediate retry:

    Generally not recommended unless the issue is confirmed as resolved (may cause additional fees) 

  2. Next collection cycle:

    Suitable for codes 0, 3 after customer confirmation 

  3. New mandate required:

    Codes 1, 6 - cannot retry without fresh DDI 

  4. Compliance review needed:

    Codes 4, 7, 8, 9 - resolve dispute/timing issues before retry 

ARUDD Reason Codes

How Access PaySuite minimises ARUDD impact 

Our Direct Debit management platform includes: 

  • Automated ARUDD processing

    Instant code identification and customer flagging 

  • Smart retry logic

    Only retries appropriate codes at optimal times 

  • Customer communication templates

    Pre-approved messaging for each ARUDD type 

  • Performance analytics

    Track resolution rates and identify improvement opportunities 

 

Ready to reduce your ARUDD impact?  

Don't let failed Direct Debits disrupt your cash flow. Access PaySuite's intelligent Direct Debit management reduces ARUDD rates and accelerates resolution times.  

Contact our specialist team today to discover how we can help minimise payment failures and maintain stronger customer relationships.  

Contact us

FAQs

How quickly should I respond to an ARUDD?

Within 24-48 hours for best results. Delay reduces customer response rates and lengthens resolution time. 

Can I automatically retry failed payments?

Only certain codes should be retried, and never immediately. Codes 1, 2, 6 require new mandates before any retry. 

What's the cost impact of ARUDDs?

Beyond potential bank charges, the main cost is administrative time and potential customer loss. Quick resolution minimises both. 

How do I prevent future ARUDDs?

Focus on customer communication, account verification, and monitoring payment patterns. 

Should I contact customers immediately after an ARUDD?

For codes 0, 1, 3 - yes, within 48 hours. For codes 4, 7, 8 - review compliance requirements first. For code 2 - stop all contact and follow deceased customer procedures. 

Can Access PaySuite help with ARUDD management?

Yes, our platform automates ARUDD processing, provides resolution guidance, and includes customer communication tools to minimise impact on your business.