Mercedes-Benz Financial Services (UK) Limited (MBFS) has undertaken measures to rectify concerns raised by the City regulator regarding the transparency of its consumer vehicle Hire Purchase Agreements.
The Financial Conduct Authority (FCA) had expressed worries about the clarity of the excess mileage charge term, particularly in cases of contract termination before the completion of the annual period. The FCA said the ambiguity could lead consumers to misunderstand their mileage allowance and consequent charges.
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MBFS has agreed to implement changes in its contracts effective from December 31, 2024 to address these concerns. These changes include clarifying how excess mileage charges will be calculated, and ensuring consumers understand their permitted mileage and potential charges upon early contract termination.
Additionally, MBFS will not apply excess mileage charges retroactively to existing contracts and has committed to providing redress to affected consumers who entered contracts since January 1, 2014.
The FCA has welcomed MBFS’s cooperation in resolving these concerns and emphasised the importance of transparency in consumer contracts. MBFS’s proactive approach to addressing these issues reflects its commitment to consumer protection and regulatory compliance.
In a note, the FCA said affected consumers are advised to await communication from MBFS regarding potential redress, expected to commence in mid-2024. Those who believe they may be impacted and do not receive communication by the end of December 2024 should contact MBFS directly.
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By GlobalDataThe FCA said it continues to monitor consumer contracts across various industries to ensure fairness and transparency, underscoring the importance of regulatory compliance in safeguarding consumer interests.
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