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Guide

SEPA direct debit at school, and what to do when the bank returns a payment.

Reviewed on

The short answer

To collect fees by direct debit, a school needs a mandate signed by each account holder, must tell the family the amount and date before the debit (14 calendar days, unless another period has been agreed) and sends the bank one file with all the month’s collections: the batch, or remesa.

A family can ask its bank to refund an authorised direct debit for 8 weeks without giving a reason, and for up to 13 months if the debit was not authorised. A refund reverses the payment but not the debt: the school still has to collect it another way.

What you need before the first batch

  • The school’s SEPA creditor identifier, issued through its bank. It goes on every mandate and every batch.
  • One mandate per paying account, signed by the account holder. It states who collects, from which account, whether payments recur, and carries a unique reference. Regulation (EU) 260/2012 requires it for euro direct debits.
  • Enrolment terms stating what the school will charge, when, and how it will give notice. A notice period shorter than 14 days has to be agreed here.

The month, step by step

  1. The school office prepares the month’s charges: fees, lunch, breakfast club, after-school activities, discounts and bursaries.
  2. Each family receives the pre-notification with the amount and the debit date. The SEPA Core rulebook of the European Payments Council sets 14 calendar days unless the parties agree otherwise.
  3. The batch is generated: an ISO 20022 XML file uploaded to the school’s online banking.
  4. A second person reviews and approves it. Whoever generates the batch should not be the one who approves it: it is the simplest safeguard against an error repeated a thousand times.
  5. The bank debits the accounts on the given date. Payments that cannot be collected come back with a reason code.

Returns: who can reverse a payment, and for how long

Under the SEPA Core scheme, the one schools use with families, the payer may ask their bank to refund an authorised debit for 8 weeks after it was taken, without giving a reason. If the debit was not authorised (no mandate, or an invalid one), the period is 13 months. The Banco de España customer portal explains this under Royal Decree-law 19/2018.

A refund says nothing about the debt. If the fee was owed, it is still owed. The Banco de España notes that returning a bill can make the creditor think the service has been cancelled, and that it is worth explaining why (source).

What to do, by reason code

The code the bank sends back says what happened. Not every return is handled the same way:

The most common return reasons and what to do with each
CodeMeaningWhat to do
AM04Insufficient funds.It can be presented again, with fresh notice to the family. A retry limit avoids a chain of bank fees.
MD06The family asked for a refund.Do not present it again without talking to them. It may be a wrong amount or a disagreement.
MS02The customer refused payment, no reason given.As with MD06: someone in the office calls or writes.
AC04Account closed.A new account and a new mandate are needed. Presenting it to the same account only adds another fee.
MD01No mandate, or an invalid one.A signed mandate is needed before collecting by direct debit again.

Return fees and collecting another way

The school’s bank charges a fee for each returned payment. Passing it on to the family only has a basis if the enrolment terms the family accepted say so, and only for the actual amount.

If the family pays at the school office, remember the Spanish cash limit: 1,000 euros when one party acts as a business or professional (Law 7/2012, art. 7). Above that, bank transfer.

Frequently asked questions

Can a family return the lunch bill without saying why?

Yes. For 8 weeks after an authorised SEPA Core debit, the family’s bank must refund it without asking for a reason. The debt does not disappear: the school collects it another way.

How much notice do we have to give before a debit?

14 calendar days, unless the terms the family accepted set another period. Many schools announce the calendar and fixed amounts once at the start of the year, then only notify changes.

Are paper mandates signed years ago still valid?

Yes, if they have been used. According to the Banco de España, a mandate lapses after 36 months without any collection. The school must keep the original while it uses it.

Do separated parents who each pay half need two mandates?

Yes. Each parent pays from their own account, with their own mandate and bill. If one returns their share, the other half stays collected.

Can we charge the family the fee our bank charges us?

Only if the enrolment terms the family accepted say so, and only for the actual fee.

How Auladia does it

Each month it prepares the bills with fees, discounts, bursaries and the split between parents: if each pays half, each share is exact to the cent and the odd cent goes to the main payer. The pre-notification goes out with the amount and the date, with the notice period the school has agreed (14 days by default), and the batch is the file the office uploads to the bank. Whoever approves it cannot be whoever generated it.

When you upload the bank’s returns file, each returned payment is recorded with its reason and sent down the right path: a retry for insufficient funds, review by a person if the family refused payment, a new mandate if the account was closed. Paper mandates are imported and valid from the first month, once the school records where it keeps the original.

Card and Bizum payments and the screen to revoke a mandate are in preparation. Today a returned payment is collected at the school office or by bank transfer.

The school office’s day with Auladia

Sources

The rules and official documents this guide cites.

  1. Regulation (EU) No 260/2012 establishing technical and business requirements for credit transfers and direct debits in euro EUR-Lex
  2. Royal Decree-law 19/2018 on payment services (Spanish, official text) BOE
  3. SEPA Direct Debit Core Rulebook European Payments Council
  4. SEPA direct debits (Spanish) Banco de España, SEPA España website
  5. Direct debits (Spanish) Banco de España, Portal del Cliente Bancario
  6. What happens if I return a bill? (Spanish) Banco de España, Portal del Cliente Bancario
  7. Law 7/2012, article 7: limits on cash payments (Spanish) BOE

This guide explains the rules; it is not legal or tax advice. Published on .

Want to see it on screen?

In the demo we show you how Auladia handles it with a made-up school’s data, and what it does not do yet.

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