The Financial Conduct Authority (FCA) of the United Kingdom, under the Consumer Rights Act 2015, has issued a commitment to Mercedes-Benz Financial Services (UK) Limited (MBFS) regarding certain unclear excess mileage terms in some of the company's consumer vehicle lease purchase agreements.

MBFS has committed to revising its "lease purchase agreements" for consumer vehicles that include excess mileage charges and has made a commitment to the FCA under the Consumer Rights Act 2015.

The company has also voluntarily agreed to provide compensation to affected consumers who have entered into contracts since January 1, 2014.

FCA is concerned that the excess mileage terms did not clearly explain how mileage allowances for consumers would be calculated in the event of mid-term termination of the contract, such as in cases where consumers voluntarily terminate the contract. This means consumers may not understand their allowed mileage and any potential excess mileage charges applicable as a result.

Additionally, FCA is concerned that in practice, MBFS has not interpreted the terms in the most consumer-friendly manner.

MBFS has:

Agreed that new contracts signed after December 31, 2024, will include a clearer explanation of how excess mileage charges are calculated;
Agreed not to rely on this term in any existing contracts with consumers and assured the FCA that since January 2022, it has not relied on this term if contracts are terminated early by mutual consent;
Voluntarily agreed to undertake compensation actions to identify consumers affected by unclear terms in contracts signed since January 1, 2014, and provide compensation as appropriate. This action has resulted in an estimated compensation payout to approximately 4,700 consumers so far.

MBFS has voluntarily agreed to refund affected consumers for charges incurred since January 1, 2014, due to unclear terms. The company will begin contacting affected consumers in mid-2024 and expects to complete contact by the end of 2024. Consumers who believe they may be affected but have not been contacted by MBFS by the end of December 2024 should reach out to MBFS.