A return debit note or direct debit return occurs when a direct debit transaction cannot be executed. The direct debit is then reversed in a procedure defined by the direct debit agreement. In this process, the corresponding amount is credited back to the account of the party obligated to pay and the account of the recipient is debited. Since a direct debit is a so-called “pull” payment, i.e., the payee initiates the payment transaction, the return debit procedure is necessary, among other things, to prevent misuse.
Reasons for direct debit return
There are several reasons for a return debit note. Frequently, a direct debit is reversed because the debtor’s account has insufficient funds. In this case, the return debit note is issued if the credit balance on the account or the overdraft facility granted by the credit institution is insufficient and the bank would therefore have to extend the overdraft facility. Another reason for a return debit note can also be an incorrect account connection or the fact that the specified account no longer exists. A direct debit is also returned if the debtor’s account is a savings account or if there is no direct debit request. In addition, a return debit note can also be obtained by the holder of the debited account. To do this, he must object to the direct debit. In the event of a returned direct debit, the payee will be informed of this and the payer will also receive a notification, unless his objection was the reason for the returned direct debit.
Direct debit return due to objection by the debtor
If money was wrongly debited from the payer’s account as part of a direct debit procedure, the payer can object to the transaction and thus trigger a direct debit return. To do this, he must submit an objection to his bank, which will then reverse the transaction. A statement of reason is not necessary. As a rule, a short application must be filled out at the customer’s own bank. In the case of the national direct debit authorization procedure, a period of six weeks applies for this. However, this period does not begin until receipt of the statement of account, which can be at the end of the month or even the quarter. If it is an unauthorized direct debit, an extended period of up to 13 months is relevant.
Charges for returned direct debits
In the event of a returned direct debit due to insufficient funds or incorrect account details, the creditor is entitled to charge the debtor the actual costs of the direct debit reversal as compensation. The situation is different in the case of bank charges levied for this purpose at the expense of the debtor. In May 2012, the Federal Court of Justice ruled that the fees charged by banks for years were unlawful, whereupon bank customers can have all fees charged between October 2009 and July 8, 2012 refunded. However, the situation changed in July 2012: With the introduction of the new Sepa regulations, banks are amending their General Terms and Conditions (GTCs) and in doing so can again set fees for return debit memos.
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