To use CAPTCHA, you need GD and FreeType library installed on your server.
Also, make sure that CAPTCHA’s temporary folder is writable. Contact Form 7 refers your upload folder setting in Settings > Media menu for resolving the base directory for CAPTCHA’s temporary folder. For example, when your upload folder is set “wp-content/myfiles” , CAPTCHA temp files will be created in wp-content/myfiles/wpcf7_captcha, so you need to make that folder writable.
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