Direct debit return

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  1. Statement of defence
  2. Third-party debtor declaration
  3. OPOS
  4. Injunction
  5. Claim amount
  6. Assignment
  7. Direct debit return
  8. Retention of title
  9. Trustee
  10. Consumer insolvency
  11. Standard insolvency
  12. Foreclosure
  13. Payment term
  14. Payment plan
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  17. Base interest rate
  18. Credit Score
  19. Liquidity
  20. Affidavit
  21. Credit insurance
  22. Factoring
  23. Objection
  24. Foreclosure
  25. Default of payment
  26. SCHUFA
  27. Enforcement Officer
  28. Opposition
  29. Dunning notice
  30. Statute of limitations
  31. Receivable
  32. Enforceable title
  33. Debtor
  34. Creditor
Table of contents:
  1. What is a direct debit return?
  2. When does a direct debit return occur?
  3. How does a direct debit return work?
  4. Who is involved in a direct debit return?
  5. Where is a direct debit return recorded or displayed?
  6. What deadlines apply to a direct debit return?
  7. What role does a direct debit return play in debt collection?

What is a direct debit return?

A direct debit return refers to a failed payment in cashless transactions. This means a previously debited amount is reversed and does not reach the creditor. In practice, the transaction is undone.

In debt collection, this process plays an important role. It indicates that the outstanding claim has not been settled, despite the attempted withdrawal. The reversal is often the first step in a disrupted payment process, which may later lead to a judicial dunning process.

When does a direct debit return occur?

A direct debit return occurs whenever a SEPA direct debit is not completed or is reversed. It shows that the expected payment did not successfully reach the creditor.

Common reasons for such reversals include:

  • The account has insufficient funds.

  • The bank account is no longer valid.

  • The debit was rejected or revoked.

  • The SEPA mandate is missing or has expired.

In receivables management, it is important to identify such notifications early, as they may signal an impending payment delay.

How does a direct debit return work?

The process is standardized: A company or service provider attempts to collect an outstanding amount from the debtor’s bank account via direct debit. The bank reviews the request. If there is an issue – such as insufficient funds or an objection – the amount is automatically returned.

Here’s how it works in detail:

  • The debit is initiated and initially charged to the debtor’s account.

  • The bank identifies that the debit is not authorized or not possible.

  • The amount is returned—this is known as a direct debit return.

  • The payee is notified that the collection attempt has failed.

For companies, this is a clear signal: The invoice remains unpaid, despite the debit attempt. This often leads to further steps in receivables management, such as sending a reminder or initiating a debt collection process.

Who is involved in a direct debit return?

Several parties are involved in this process:

  • The debtor: the individual or business whose account was to be debited.

  • The creditor: the company that is entitled to receive the payment.

  • The debtor’s bank, which reviews the debit and may reject it.

  • The creditor’s bank, which is expecting the funds.

  • A payment service provider, if one is handling the technical processing.

In the context of a debt collection case, it is often important to document which party rejected the debit and why. This information can be relevant in later steps, such as the judicial dunning process.

Where is a direct debit return recorded or displayed?

The reversal appears on both sides:

  • In the debtor’s online banking, as an additional entry following the direct debit.

  • On the account statement, often marked as “direct debit returned.”

  • In the creditor’s accounting system, where it is noted as a failed transaction.

  • In many cases, also within the reminder or debt collection system, which responds automatically to payment failures.

This helps a company recognize early on that a claim remains unsettled and initiate appropriate measures.

What deadlines apply to a direct debit return?

Different deadlines apply depending on the situation:

  • Return by the bank: A direct debit can be reversed by the bank for technical reasons within 5 banking days.

  • Right of revocation for authorized debits: The debtor has 8 weeks to raise an objection to the payment.

  • Without a valid mandate: In this case, the deadline extends up to 13 months.

In debt collection and dunning procedures, observing these deadlines is important to identify defaults in time and to document subsequent steps properly.

What role does a direct debit return play in debt collection?

In debt collection, a direct debit return often marks the start of the entire process. It shows that the agreed payment has not been received, despite an active collection attempt. Many companies automatically evaluate such reversals and initiate an internal reminder process.

If the debtor does not respond to reminders, or if direct debit returns occur repeatedly, the case is often handed over to a collection agency. The claim is then pursued professionally—initially out of court, and later in court if necessary.

The direct debit return itself is neither a dunning notice nor a lawsuit, but it is a clear signal: The payment remains outstanding, and the risk of total default has increased. That is why it is a central trigger for further action—for both debt collection service providers and creditors.