Not upheld: unfair termination of hire purchase agreement and tyre warranty mis-selling complaint against Mercedes-Benz Financial Services UK Limited
Financial Ombudsman decision DRN-6047845 of 2026-04-24T00:00:00+00:00. unfair termination of hire purchase agreement and tyre warranty mis-selling complaint against Mercedes-Benz Financial Services UK Limited. Outcome: Not upheld.
Decision detail
| Reference | DRN-6047845 |
|---|---|
| Decision date | 2026-04-24T00:00:00+00:00 |
| Firm | Mercedes-Benz Financial Services UK Limited |
| Product | Motor finance (PCP / HP) |
| Claim type | unfair termination of hire purchase agreement and tyre warranty mis-selling |
| Outcome | Not upheld |
| Remedy | None ordered. The ombudsman reminded MBFS of their requirement to treat consumers in financial difficulty with due consideration and forbearance, and suggested Mr C may wish to provide the requested evidence of his medical circumstances if collection action remains available. |
Summary
Mr C complained about the termination of his hire purchase agreement with MBFS for a used car acquired in April 2022, claiming he requested breathing space and that notices were unclear or untimely, and about an allegedly mis-sold tyre warranty. MBFS terminated the agreement on 7 March 2025 after Mr C failed to make payments due in September and October 2024 and did not respond to default notices issued in January and February 2025. The ombudsman found that MBFS complied with Consumer Credit Act requirements, provided Mr C with adequate opportunity to remedy the default, and treated him with due consideration regarding breathing space. The tyre warranty was found not to have been misrepresented. The complaint was not upheld.
The Ombudsman's reasoning
The ombudsman found that Mr C failed to make required payments under the agreement, MBFS properly issued default notices complying with the Consumer Credit Act 1974 section 88 requirements, and gave Mr C multiple opportunities to remedy the default. Although Mr C made a payment on 8 March 2025, this was after the 6 March 2025 deadline specified in the default notice. The ombudsman was satisfied that MBFS treated Mr C with due consideration and forbearance by pausing collection action and allowing time for him to provide evidence of his circumstances. Regarding the tyre warranty, the ombudsman found no evidence of misrepresentation and noted Mr C was aware of exclusions at the time of purchase.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Mercedes-Benz Financial Services UK Limited, all decisions | 1,144 | 33% |
| Motor finance (PCP / HP), all decisions | 18,521 | 38% |
Source
Read the original decision on the Financial Ombudsman Service website