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Hi, please can someone offer me advice? I sent Mercedes Benz a letter from you 'Guide to Termination Rights stating that the excess Mileage and a spare key which was handed in but*they*state was not working thus are charging me £360 because they claim they had to replace the battery. The car was in immaculate condition, photos taken. Please see response I have received today. Any advice would be very much appreciated
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(e-mail received from Mercedes Benz Finance)
Background
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My understanding of your complaint is that you believe that under the Consumer Credit Act 1974 you are not liable for excess mileage charges.*
You have advised that the damages all fall within our fair wear and tear guidelines.*
You have stated that the outstanding balance may only be recovered from you via court order.*
You offered to purchase the vehicle form us for £10,000.00 when the settlement was £12,344.00 which was rejected by us.
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Investigation
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As part of my review, I have obtained a copy of your agreement and Termination of Agreement letter address to Mercedes-Benz. Page 1 of your agreement states the following "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 £0.07 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 a rate of 12,000 miles per year, pro-rated for part years". I must stress the importance of reading all contracts that you sign as if you do not agree to the terms and conditions of the agreement, you have the right to not sign and not lease the product.
It also states in section 12 of your terms and conditions the following:*
12.1 If the vehicle is returned to us (whether at the end of the period of hire or on earlier termination for any reason, including voluntary termination by you). We will calculate the total distance travelled by the vehicle whilst in your possession (the “total distance”).
12.2 You will pay us a charge at the rate stated in this agreement if and to the extent that the total distance exceeds the allowed distance for the vehicle (calculated using the annual distance stated in this agreement for each year or part of the year between the start date and the date of return).
As excess mileage is not damage to the vehicle, the fact stated that it has not outside of reasonable care of goods is not applicable. An excess mileage charge is calculated as you have not paid for the miles you have used on the vehicle, thus causing depreciation of the vehicle and in turn causing Mercedes-Benz UK to lose out financially.*
Whilst liability for the financial agreement has been terminated with half of the total amount payable. This is compensation for a breach of terms.*
Your mileage allowance has therefore been re-calculated on a pro-rata basis in line with the length of time you have had the vehicle in your possession. I would also like to kindly refer you to S99 (2) Consumer Credit Act 1974 where it states: ‘Termination of an agreement under S (1) does not affect any liability under the agreement which has accrued before the termination.’
So that you were aware it does state in your Voluntary Termination ‘I also understand that I will be liable for any damage or pro-rata excess mileage charges after inspection of the vehicle.’ This has been signed and dated 3rd April 2020, I will attach a copy for your records.**
With regards to the damages, you have been charged for a replacement key as it was not functioning on the date of collection and inspection on the 27th April 2020. I have since confirmed with British Car Auctions (BCA) that a replacement was required, and they have replaced the battery to ensure the correct charge was applicable to you. As this needs to be returned in working condition ready for the vehicles next purpose the damage falls beyond reasonable care and should have been amended prior to the collection of your vehicle. I will not be upholding this element of your complaint.*
In relation to the purchase of your vehicle your offer of £10,000.00 was rejected as it did not meet the expected balloon payment this would not be negotiable. At the beginning of an agreement, we obtain a residual quote for the vehicle after taking into consideration the payments and depreciation of time and mileage during the lease. Mercedes-Benz Financial Services would not be in position to accept an offer lower than the residual quote.*
You have advised that the outstanding balance may only be recovered via a court order. To inform you of our collections strategy, your account is currently with Mercedes-Benz and should the account be left unactioned it would be passed to debt collection agency, following this the account may then go onto legal proceedings. I am unable fast-track this matter for you, but should you want this independently reviewed you will find the Financial Ombudsman details below.*
What we can do in the meantime is remove your mobile number in order to prevent reoccurring contact upon request. However, please be aware letters will still be sent to inform you of the account position and any required action necessary.*
Due to the above I can confirm your outstanding balance stands at £1,826.14 (Damages £360.00 and Excess Mileage £1,466.14).
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Next Steps
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I trust that my response has now brought this matter to an amicable resolution and I would like to thank you for taking the time to write to us with your concerns. In the event that you do have any further queries or concerns, please do not hesitate to contact me on the details set out below. *
I will place your account on hold for three working days from the date your final response was sent, meaning the hold will expire on 3rd July 2020. This will allow you time to look over your response from us and contact our offices. Please be advised, if no contact is made from yourself, this may involve your account being passed to our collections agency. Please contact our offices on 0370 240 1110 to discuss payment options.
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As of this point, 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.
*
The Ombudsman contact details are:
*
Exchange Tower,
Harbour Exchange Square,
London, E14 9SR
Tel:0800 023 4 567 or 0300 123 9 123,
Website: www.financial-ombudsman.org.uk
*
*
(e-mail received from Mercedes Benz Finance)
Background
*
My understanding of your complaint is that you believe that under the Consumer Credit Act 1974 you are not liable for excess mileage charges.*
You have advised that the damages all fall within our fair wear and tear guidelines.*
You have stated that the outstanding balance may only be recovered from you via court order.*
You offered to purchase the vehicle form us for £10,000.00 when the settlement was £12,344.00 which was rejected by us.
*
Investigation
*
As part of my review, I have obtained a copy of your agreement and Termination of Agreement letter address to Mercedes-Benz. Page 1 of your agreement states the following "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 £0.07 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 a rate of 12,000 miles per year, pro-rated for part years". I must stress the importance of reading all contracts that you sign as if you do not agree to the terms and conditions of the agreement, you have the right to not sign and not lease the product.
It also states in section 12 of your terms and conditions the following:*
12.1 If the vehicle is returned to us (whether at the end of the period of hire or on earlier termination for any reason, including voluntary termination by you). We will calculate the total distance travelled by the vehicle whilst in your possession (the “total distance”).
12.2 You will pay us a charge at the rate stated in this agreement if and to the extent that the total distance exceeds the allowed distance for the vehicle (calculated using the annual distance stated in this agreement for each year or part of the year between the start date and the date of return).
As excess mileage is not damage to the vehicle, the fact stated that it has not outside of reasonable care of goods is not applicable. An excess mileage charge is calculated as you have not paid for the miles you have used on the vehicle, thus causing depreciation of the vehicle and in turn causing Mercedes-Benz UK to lose out financially.*
Whilst liability for the financial agreement has been terminated with half of the total amount payable. This is compensation for a breach of terms.*
Your mileage allowance has therefore been re-calculated on a pro-rata basis in line with the length of time you have had the vehicle in your possession. I would also like to kindly refer you to S99 (2) Consumer Credit Act 1974 where it states: ‘Termination of an agreement under S (1) does not affect any liability under the agreement which has accrued before the termination.’
So that you were aware it does state in your Voluntary Termination ‘I also understand that I will be liable for any damage or pro-rata excess mileage charges after inspection of the vehicle.’ This has been signed and dated 3rd April 2020, I will attach a copy for your records.**
With regards to the damages, you have been charged for a replacement key as it was not functioning on the date of collection and inspection on the 27th April 2020. I have since confirmed with British Car Auctions (BCA) that a replacement was required, and they have replaced the battery to ensure the correct charge was applicable to you. As this needs to be returned in working condition ready for the vehicles next purpose the damage falls beyond reasonable care and should have been amended prior to the collection of your vehicle. I will not be upholding this element of your complaint.*
In relation to the purchase of your vehicle your offer of £10,000.00 was rejected as it did not meet the expected balloon payment this would not be negotiable. At the beginning of an agreement, we obtain a residual quote for the vehicle after taking into consideration the payments and depreciation of time and mileage during the lease. Mercedes-Benz Financial Services would not be in position to accept an offer lower than the residual quote.*
You have advised that the outstanding balance may only be recovered via a court order. To inform you of our collections strategy, your account is currently with Mercedes-Benz and should the account be left unactioned it would be passed to debt collection agency, following this the account may then go onto legal proceedings. I am unable fast-track this matter for you, but should you want this independently reviewed you will find the Financial Ombudsman details below.*
What we can do in the meantime is remove your mobile number in order to prevent reoccurring contact upon request. However, please be aware letters will still be sent to inform you of the account position and any required action necessary.*
Due to the above I can confirm your outstanding balance stands at £1,826.14 (Damages £360.00 and Excess Mileage £1,466.14).
*
Next Steps
*
I trust that my response has now brought this matter to an amicable resolution and I would like to thank you for taking the time to write to us with your concerns. In the event that you do have any further queries or concerns, please do not hesitate to contact me on the details set out below. *
I will place your account on hold for three working days from the date your final response was sent, meaning the hold will expire on 3rd July 2020. This will allow you time to look over your response from us and contact our offices. Please be advised, if no contact is made from yourself, this may involve your account being passed to our collections agency. Please contact our offices on 0370 240 1110 to discuss payment options.
*
As of this point, 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.
*
The Ombudsman contact details are:
*
Exchange Tower,
Harbour Exchange Square,
London, E14 9SR
Tel:0800 023 4 567 or 0300 123 9 123,
Website: www.financial-ombudsman.org.uk
*
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