BACS may cancel a Direct Debit when the bank details provided are incorrect or cannot be validated. One message you may see is “Contract Cancelled because of Input Rejection Report (0N): REJECTED – Transaction Code Unacceptable for Destination Sorting Code.” This occurs when the sort code is not valid for Direct Debit transactions, does not exist, or was entered incorrectly. To resolve this, check that the sort code and account number have been entered accurately. If anything appears unclear or inconsistent, contact the customer to confirm their details. Once you have the correct information, amend the bank details and restart the Direct Debit to ensure payments can be collected properly.
Modulus Check Failure
Another common rejection is “Contract Cancelled because of Input Rejection Report (0N): REJECTED – Destination Account Number did not pass Modulus check.” A Modulus check is used to validate whether a sort code and account number combination could be genuinely paired. It does not confirm the account owner, but it ensures the numbers follow the correct format. If this message appears, it means the customer’s bank has determined that the combination provided is not valid. Contact the customer to confirm their bank details, amend them if needed, and then restart the Direct Debit before attempting further collections.
📌Note: For customers who sign paper mandates, if the original mandate contained incorrect bank details, a new mandate must be completed and signed with the correct information. This is required before restarting the Direct Debit to ensure compliance and accuracy.