Consumer complaint received 2017-03-07
Company: Mercedes Benz Financial Services
State: MI
Product: Consumer Loan
Sub-product: Vehicle lease
Issue: Managing the loan or lease

Complaint:
Per XX/XX/XXXX MB Trust CFPB has jurisdiction. I leased a brand new XXXX Mercedes Benz CLA250 on XX/XX/XXXX. I was told that the vehicle was covered in full by a manufacturer 's warranty. Additionally I purchased a maintenance plan to cover all other repairs/maintenance that were my responsibility pursuant to terms disclosed at time of the lease. The vehicle has been to the dealer 9 times and out of service more than 63 days for serious life threatening safety issues that impair the use and value of the vehicle. Unfortunately the defects have not and will not be repaired because Mercedes Benz Financial Services through its acting as my attorney in fact cancelled the manufacturers warranty because the warranty repairs exceed the amount of money allocated for warranty repairs. Thereby, leaving me with a choice of being responsible for $ 30,000+ in repairs of defective parts or fees for early termination. DaimlerAG has a policy to deny warranty claims when they exceed the warranty repair costs allocated to each vehicle. The warranty repair costs allocated to each vehicle are determined by the purchase price of the vehicle. The more paid for the vehicle the more money allocated for warranty costs to repair the vehicle. This policy also applies to recall campaigns. Recalls are only issued for the higher end models even though the defective parts are on all MB vehicles. In total there are approximately XXXX recalls for Mercedes Benz vehicles to address issues I have been complaining about since XX/XX/XXXX. However, for my model vehicle the manufacturer has only issued service bulletins. Currently, there are more than XXXX service bulletins for defective parts on the vehicle because the costs to repair the defects exceed the amount allocated for warranty repairs and recall repairs are mandatory as opposed to service bulletins which are discretionary repairs. Once the amount allocated for warranty repairs has been reached Mercedes Benz Financial Services acts as the lessees attorney in fact and cancels the manufacturer warranty. See recall alerts, corresponding Service Bulletins, and Note XXXX XXXX pays dealers and service managers bonuses for every warranty claim denied that exceeds the amount of warranty repair costs allocated per vehicle. The bonuses are paid in the form of profit sharing arrangements and bonuses to management. To discourage dealers from repairing defects mentioned in service bulletins which would result in the submission of warranty claims that exceed the amount allocated for warranty repairs per vehicle. See Note XXXX In fact the Annual Report states ... '' A provision for expected warranty costs is recognized when a product is sold or when a new warranty program is initiated. '' XX/XX/XXXX Annual Report page XXXX At no time was it disclosed that Mercedes misrepresents the amount of vehicles with defective products and life threatening safety defects by limiting vehicle recalls to drivers in high value vehicles who have not made previous warranty claims. Nor was it disclosed that the manufacturer 's warranty was limited to a certain dollar amount that is pre-determined by the manufacturer and that Mercedes Benz Financial Services would act as my attorney-in-fact and cancel/amend the vehicle 's Warranty leaving me responsible for the costs to repair defects in the vehicle that were represented to me as being covered by the manufacturers warranty. This policy and practice is discriminatory and illegal because it has a disproportionate " adverse impact '' on persons in a protected class. Additionally, MBFS failed to disclose that my vehicle and I would be part of a study called XXXX which monitors drivers and their driving habits as part of an automated driving project called XXXX. At no time was I given the option to opt out of this program. At no time was this program disclosed to me at the time of my lease.

Company response to consumer: Closed with explanation