HELP with MBFS complaint

[laj1983]

Hi,

We have recently VT'd our contract with Mercedes and received an invoice for around £400 excess mileage charge and £400 charge for not having a Mercedes recommended make of tyres (x2).

After getting this we responded with a complaint letter and I have pasted the reply.

Can anyone help with how to respond to this? I did state recent cases where Mercedes lost when taking it to court, but they just keep quoting their own terms and conditions and referring us to their Vehicle Return Standards.

Any help would be appreciated.

Dear...,

Thank you for your patience while I have investigated your concerns.
Following my review of your letter dated 9 April 2018, I understand there are three aspects to your complaint with us. As such I have looked to address each area accordingly.

Voluntary Termination and excess mileage
Whilst I appreciate your feedback regarding previous cases you have reference against "Mercedes-Benz", in our experience the charges that have been raised are valid and as such will remain in full, I will explain why.

When Voluntary terminating your agreement, you do not waiver all previous terms and conditions within your agreement. You will note that on page one of your agreement it states that "if you do not exercise your right to purchase the vehicle (including if the agreement terminates early for any reason), an excess distance charge will be payable at the rate of 9.00 pence (plus VAT) for each mile, by which the total distance travelled by the vehicle at the end of the period of hire exceeds the allowed distance, calculated at the rate of 10,000 miles per year, pro-rated for part years ( see condition 12)"


This means that should you terminate your agreement and return the car, either at the end of the agreement or early for whatever reason, including Voluntary Termination, any mileage will be reviewed in line with the allowed distance which will be looked at pro rata, for the period in which you were in possession of the vehicle. Should you exceed the agreed allowance a charge will be payable.

The allowed mileage on your agreement is 10,000 miles per annum with a charge of 9.00 pence per mile should you excess this allowance ( pro orated for part years). As your agreement started on March 2015, and was returned to us April 2018 your total mileage allowance is broken down to approximately 30,000 miles. The vehicle was returned to us with a mileage of 34,384 therefore you have been charged £394.56 plus VAT for your excess mileage.


In conclusion by terminating your agreement via Voluntary termination, you have not exercised your rights to purchase the vehicle and as such the excess mileage charge will remain payable in full.


Tyres
I understand that you are disputing the charge that has been raised for the "Incorrect Type/ spec" being on the left hand rear and right hand rear tyre as
Under the Mercedes-Benz Return Standard which are provided at the start and end of the agreement it does clearly state under "Tyres" that "Your Mercedes‑Benz must conform to the original specification of the vehicle. It must have matching tyres (of a size and premium brand, approved by the manufacturer) on each axle, for example, Pirelli or Bridgestone."

Furthermore, I can see that our website provides further details in terms of what brands fall under the definition of "premium tyres". I can see that you have returned your car with "Deestone" which do not conform to our requirements of a premium brand, which is why a charge has been raised.

In order to bring this matter to an amicable resolution and as s sign of good faith, I would however like to offer a 50% reduction in the cost of the replacement tyres.

Conclusion

I hope the above has provided you with reassurance that I have fully investigated your concerns. Should you wish to accept my offer, please confirm to me. You have expressed that the Financial Ombudsman Service is not a route that you would like to consider however as our final position has been issued I do have an obligation to notify you of your rights.

Should you be at all unhappy with my handling of your complaint so far you may have the right to refer your complaint to the Financial Ombudsman Service, free of charge – but you must do so within six months of the date of this response. If you do not refer your complaint in time, the Ombudsman will not have our permission to consider your complaint and so will only be able to do so in very limited circumstances. For example, if the Ombudsman believes that the delay was as a result of exceptional circumstances.



Thanks,
Laura

[R0b]

Hello

What letter did you send to Mercedes?

[laj1983]

Hi Rob,

Please see below;

They agreed to waive the V5 issue as a 'goodwill gesture' and also take 50% off tyre charges.

Dear ...,
Before I go ahead it is important to note that I did not sign Mercedes VT pack, instead sending my own letter to VT via e-mail.
I would like to provide you with more information regarding our complaint and ask that you consider all the information I have provided whilst reviewing our case.
Please ensure you read this fully as I have included court case actions over excess mileage, including a very recent one which Mercedes lost. Please do not repeat the Section 99 (2) and 100 (4) of the Consumer Credit Act as a basis for liability as this was very recently defeated in court. I believe that I have taken very good care of the car and would dispute any argument for not taking ‘reasonable care’.
If you were to continue invoicing me for these charges, then I would like you to be ready with a legal standing which does not involve the above sections of the Consumer Credit Act 1974 as this was recently defeated in court.
I would suggest a discussion with Mercedes Legal department before concluding on this complaint. Should Mercedes still insist that we I am liable then please ask the legal department to fully state and prepare their reasons for doing so, explaining reasons that would make their argument different from the court case which Mortimer Clarke represented for MBFS in February 2018 (England).

Missing V5 Document
The V5 Document was available for the driver at the time of collection, as per the Vehicle Returns Standard guidebook. Immediately upon realising the collection inspector left the V5 document behind we contacted Mercedes to advise. We then electronically changed the ownership details via Gov.uk on the day after. Proof of this has been sent in previous correspondence.
Mercedes were advised immediately on the day of collection regarding the V5 document, and there was no need for a new one to be requested by yourselves. When the online change was completed the new V5 would automatically have been sent to Mercedes Finance. This was completed the day after (23^rd March 2018).
As a result, we will not be paying the charge of £25 as we find this a complete mis-communication between your collection drivers, Mercedes Customer Service and Mercedes Finance.
Damage Fees – Incorrect type/spec
As stated under the Consumer Credit Act 1974 the vehicle must be returned to you in a reasonable condition. We have taken reasonable care with the car, and it was returned with no damage.
We have provided tyres that are the correct type for the make and model of car, therefore this constitutes reasonable condition. The tyres meet minimum UK legal requirements and are roadworthy, as proved by the MOT which is dated the same as the date of Voluntary Termination.
Your Vehicle Returns Standard does not provide a list of approved brands.
There is no legal obligation for us to adhere to brands imposed by Mercedes and as such we are disputing these charges.
Excess Mileage
Recent court case involving Mercedes Finance – 23^rd February 2018
In the case mentioned above Mercedes lost in their attempt to enforce excess mileage through the Courts by claiming the defendant did not take reasonable care of the vehicle.
This case was for excess mileage charges of £905.90 from a Voluntary Termination made to Mercedes on the 5^th of January 2016.
Your claim to us is for significantly less - £394.56 (plus VAT).
In the Mercedes witness statement from this case they relied upon s.99(2) of the CCA and 100(4), arguing that by exceeding the agreed mileage the defendant had not taken reasonable care of the goods.
There is no mention in Mercedes Vehicle Return Standards regarding mileage.
We would also argue the points made by the defendant in this case, which were;

• To answer the opponents’ reliance on her contractual obligation to pay for excess mileage, she immediately drew the Judges attention to s.173 to demonstrate that the contractual term was void as it was inconsistent with the protection afforded to her by section 99 and 100 because it imposed an additional liability.
• The defendant then referred the Judge to s.100 (1) and argued that ‘total sum’ excluded any sum payable as a penalty or compensation or damages. She pointed out that in the HP Agreement the charges for excess mileage was to be considered a penalty.
• She referred the Judge to Julian Hodge Bank Ltd vs Hall to reiterate this point.
• She argued that 99(2) was not applicable as the liability for excess mileage was clearly not a ‘rolling charge’ or accrued prior to termination because the amount payable would only become apparent upon termination of the contract.
• She referred the Judge to the TERMINATION: YOUR RIGHTS section of her contract which clearly states the limited liability.
• With reference to the Claimants submission that excess mileage was a determinant of ‘reasonable condition’ she had included a copy of the BVLRA Fair Wear and Tear Industry Standard. She argued that the vehicle was returned in a condition fully compliant with this as evidenced by the vehicle collection report which detailed no defects whatsoever.
• She referred the Judge to a section of the HP Agreement itself entitled ‘Vehicle condition terms’ which only lists regular servicing and maintaining the car in a ‘good and clean condition’ and repairing any damage as markers of ‘reasonable condition’. She pointed out that excess mileage was not included in this.
• She referred the Judge to the authorities of Brady and Broster.

Please note the conclusive points made by the Judge in this case.

• The Judge said she could not find that there was a correlation between vehicle condition and excess mileage and so that part of the claim had to fail.
• She said there was nothing in the agreement to suggest that there as any such correlation and that she was supported by s.100 of the CCA which excludes penalty charges from the definition of “total sum” and she said she was bound by the authority set out in the Julian Hodge case.
• With regards to the second limb of Mercedes case she said that the liability for excess mileage “crystallised” upon termination of the contract and did not find that it was a liability accrued before this point and that part of the claim also must fail.

Another case to refer to would be the court of appeal case of Brady v St Margaret's Trust.
Termination: Your Rights
As per the termination rights on my agreement I am entitled to return the goods after paying £18773.36, half of the total amount payable. As stated, ‘If you have already paid at least this amount plus any overdue instalments and have taken reasonable care of the goods, you will not have to pay any more’.
The agreement also states;
‘This is a Hire Purchase Agreement regulated by the Consumer Credit Act 1974. Sign it only if you want to be legally bound by its terms’.
Conclusion
I strongly contest these charges and do not agree to be liable for them. I therefore suggest that if you insist that I am liable that you instruct your solicitors to take court action as I will fiercely defend this based on the case studies above.
The Financial Ombudsman route is not one which I will consider as I believe that if this case was taken to

[R0b]

Here's a very quick response, but you may need to adapt it to suit your needs or what you want to say to them.

--------------------------------

Dear [Name],

Im writing further to your letter dated [insert date].

In that letter you explained that by terminating the hire-purchase agreement voluntarily, I "do not waive all previous terms and conditions" within the agreement. You then refer to condition 12 of the agreement in which it states I am liable for excess mileage at a rate of 9 pence plus VAT for any excess mileage, pro-rated. I do not agree.

As I am sure you are aware, the agreement is regulated and governed by the provisions of the Consumer Credit Act 1974 (the "Act"). Section 99(1) of the Act provides the unilateral right, as the hirer of the vehicle, to give notice to Mercedes-Benz to terminate the agreement. Having given notice in accordance with Section 99(1), my liability is the aggregate of (1) the total sums paid to date and (2) any sums which are due immediately before the agreement was terminated and which is strictly limited to one half of the total price payable under the agreement.

In light of the above, I am surprised that Mercedes-Benz continues to claim that I am liable to pay for the excess mileage charges. The excess mileage charges sought by Mercedes-Benz are for damages and/or compensation as a result of breaching Condition 12 of the agreement however, as I already stated in my previous letter, the definition of 'total price' explicitly excludes any compensation or damages in connection with a breach of the agreement. If the agreement had run its full course and I returned the vehicle without exercising my termination rights under Section 99(1) of the Act, then Mercedes-Benz would have been entitled enforce Condition 12, but this was not the case.

Concerning the issue that the tyres on the vehicle were not of the correct specification, I make no further comment other than to repeat what I said in my last letter. That is to say, I am only required to take reasonable care of the vehicle (see Section 100 of the Act). I would refer you to Section 173 of the Act where it says that any contractual term that is inconsistent with any provisions for the protection of the hirer, shall be void and unenforceable. Furthermore, Section 173(2) confirms this position by stating that any contractual term that imposes additional liability (whether directly or indirectly) shall be deemed inconsistent with the provision that protects the hirer. For the avoidance of doubt, those protective provisions are set out in Section 100.

It seems to me, therefore, that the continued pursuit the charges for excess mileage and the wrongly-branded tyres are an attempt to impose additional liability which is inconsistent with Section 100(1) of the Act, namely that my liabilty is limited to one half of the total price payable under the agreement.

Whilst I acknowledge that I should take this matter up with the Financial Ombudsman, I do not consider it appropriate to do so. The issues in question require an interpretation of the Act and therefore the jurisdiction of the Courts would be more appropriate (which I have already said that any action will be defended). I would ask that Mercedes-Benz reconsider their position and confirm that the matter will be closed with no further action.

[laj1983]

Thanks very much Rob.

My husband is worried about his credit rating as he takes it all very seriously.

can they do anything? They haven’t updated it to show it has been settled.

[R0b]

They could in theory by adding a default or late payment marker on the credit file but then that will open themselves up to a data protection breach, which your husband could sue for damages should he wish to do so. Strictly speaking, if they haven't marked the account as closed then that is already a breach of data protection in that the information they have supplied to credit agencies is not accurate nor up to date - notice has been given to terminate and it should be marked as closed in the month that the notice was given.

As above, it is a risk and I've never seen Mercedes apply any adverse markers on people's file they tend to try and take you to court. That's not to say they won't change tactics at some point in the future as then the onus will shift to the consumer to take action about their credit file.

[laj1983]

You have been very helpful Rob, many thanks.

[laj1983]

Hi Rob,

We have a reply from Mercedes stating they still demand we pay as per terms and conditions. What would you recommend we should do now? Your help is appreciated.

Please see the reply below;

Thank you for your email and patience.

I can confirm that our position on this matter remains unchanged and I would like to reiterate that the charging of excess mileage is industry standard. Mercedes-Benz are entitled to charge and importantly you have agreed to the terms and conditions of the finance agreement. We respectfully disagree that it is penalty.

Please note, in relation to the tyres; you would have received a Vehicle Returns Standard at the start of your agreement and this would have been available to view on our website.
Should you remain unhappy with my final statement, as advised you can refer to the Financial Ombudsman. You queried the name of our solicitor. I can confirm that we would not provide this information, however should you wish to raise this with a solicitor, they can contact ourselves and we can assist accordingly.
If you have any new information or evidence for me to review, please feel free to send this over and I will be more than happy to do so.

[R0b]

Hello

It's a typical standard response from MBFS referring to the terms and conditions of the agreement when they fully know that the provisions of the CCA prevail over any conflict between the contract and the CCA. They tried their luck before with someone else and lost so the ball is firmly in your court as to whether you want to pay them or not. There is a possibility that they could take you to court, but whether they want to lose again is another story.

Not much more I can add really, feel free to go to the Ombudsman but your unlikely to get a result from them.

[laj1983]

Thanks so much Rob.

I did read about that case. Do you know the case to quote to them?

Your help has been great, thank you for taking the time.

Laura

[R0b]

I do and I have requested a copy of the transcript but still waiting ... transcript company has cocked things up but when I have it will let you know.

[laj1983]

Hi Rob,

Just wondered if you managed to get a copy of the court transcript yet?

Many thanks,

Laura

[laj1983]

Hi Rob, Mercedes have sent our invoice to a debt collectors, which I intend to fight. Did you ever happen to get the court transcripts? Many thanks, Laura

[R0b]

Check your PM.

Debt collectors can't do much other than attempt to recover the debt and they have no power to pursue you unless MBFS instruct them to do so.

Do you know which company is acting as the debt collector?