Key facts
- Mercedes-Benz Financial Services (MBFS) was criticized by the UK's Financial Ombudsman Service (FOS) for poor handling of a motor finance dispute.
- The FOS ordered MBFS to refund 50% of monthly payments with interest, a £2,100 deposit, £475.20 for additional work, and £500 for distress.
- The dispute involved a car with serious electrical faults, including issues with brake assist and the battery, which potentially impacted safety.
- MBFS initially rejected return requests, arguing software updates resolved the issues and that the customer was outside a six-month window.
- The FOS found MBFS's arguments "misguided" and stated the firm "fundamentally failed to engage appropriately with the issues and its potential liability under the CRA."
- A fault in November 2025 caused the car's brakes to apply automatically while driving, highlighting a potential serious safety risk.
Mercedes-Benz Financial Services (MBFS) has been ordered by the UK's Financial Ombudsman Service (FOS) to refund a customer 50% of their monthly payments, plus interest, for a car that exhibited serious electrical faults. The FOS criticized MBFS for its "very poor" handling of the dispute, including rejecting return requests despite the customer flagging critical issues with the brake assist and battery. MBFS had argued that software updates performed by an approved garage did not constitute a repair attempt under the Consumer Rights Act, a claim the FOS deemed "misguided." The ombudsman also noted that the car experienced a fault where the brakes applied automatically while driving, representing a "serious safety risk." In addition to the partial refund of payments, MBFS must also reimburse the customer's £2,100 deposit, £475.20 for additional work, and £500 for distress and inconvenience caused. This ruling comes as Mercedes-Benz's motor finance business is under scrutiny amid a broader £9bn redress scheme in the UK concerning mis-selling practices related to 'secret' commission agreements. Mercedes-Benz is among three industry businesses challenging the Financial Conduct Authority's scheme and has provisioned £400m for the scandal.