Consumer complaint received 2025-04-05 00:00:00
Product: Debt collection — Auto debt
Issue: Attempts to collect debt not owed — Debt was paid
Company: Mercedes Benz Financial Services
State: FL

Complaint narrative:
Complaint for Violations of Truth in Lending Act ( TILA ), Regulation Z ( 12 CFR Part 1026 ), Fair Credit Reporting Act ( FCRA ), Fair Debt Collection Practices Act ( FDCPA ), UCC, Common Law Fraud, and Florida Conversion Law Related to Illegal Repossession and Wrongful Credit Reporting I. Factual Background : On [ Insert Date ], I tendered full payment on my vehicle lease to Mercedes-Benz Financial Services ( MBFS ) by lawful means ( Bill of Exchange ).

Concurrently, I issued a formal Notice of Rescission and Revocation of Security Interest under Truth in Lending Act ( TILA ) and Regulation Z, 12 CFR 1026.23 ( a ) ( 2 ) and ( d ) ( 1 ).

Regulation Z specifically authorizes rescission via written notification without any requirement for a specific form, stating : 12 CFR 1026.23 ( a ) ( 2 ) : To exercise the right to rescind, the consumer shall notify the creditor of the rescission by mail, telegram, or other means of written communication.

Thus, I exercised my lawful right of rescission through written communication, satisfying the federal requirement.

Under 12 CFR 1026.23 ( d ) ( 1 ), MBFS had XXXX ( XXXX ) calendar days after receipt of the rescission to : Terminate the security interest, XXXX any money or property exchanged, Take any action necessary to reflect the termination of the debt obligation. 

Furthermore, 12 CFR 1026.23 ( d ) ( 2 ) provides : The consumer shall tender the money or property to the creditor only after the creditor has met its obligations under paragraph ( d ) ( 1 ).

Meaning, I as the consumer, am not legally obligated to return possession of the vehicle until MBFS first performs their rescission duties.

Despite proper tender of payment and valid rescission notice, MBFS ignored their legal obligations, unlawfully repossessed the leased vehicle without canceling the security interest or returning any funds.

MBFS subsequently sent an email falsely claiming that rescission was not possible after repossession, directly contradicting federal law under XXXX XXXX, which does not permit creditors to " deny '' rescission after valid notice. 

MBFS then furnished negative credit information to consumer reporting agencies, claiming a " repossession '' occurred, despite the dispute and violation of the rescission process, thereby violating the Fair Credit Reporting Act ( FCRA ) and the Fair Debt Collection Practices Act ( FDCPA ). 

XXXX. Violations Committed by MBFS : 1. Violation of 12 CFR 1026.23 ( a ) ( 2 ) Right to Rescind by Written Notice I lawfully exercised my right to rescind by written communication.

MBFSs refusal to honor the rescission is a direct violation.

2. Violation of 12 CFR 1026.23 ( d ) ( 1 ) Creditor Must Cancel Security Interest and Return Funds MBFS failed to cancel the security interest within XXXX ( XXXX ) days. 

MBFS failed to return funds or properly account for the transaction.

3. Violation of 12 CFR 1026.23 ( d ) ( 2 ) Consumer Not Required to Return Vehicle Until Creditor Performs MBFS repossessed the vehicle before fulfilling its legal duties, making the repossession unlawful.

4. Violation of UCC 3-603 ( b ) ( and Florida UCC 673.6031 ) Tender of full payment discharges obligation.

MBFS 's refusal to accept valid tender is a breach under the XXXX XXXX XXXX. 

XXXX. Violation of XXXX XXXX ( b ) MBFS engaged in fraud in the origination and enforcement of the transaction, forfeiting their rights as a holder in due course. 

XXXX. Violation of Fair Credit Reporting Act ( FCRA ), XXXX XXXX. XXXX ( a ) XXXX furnished inaccurate and misleading information regarding my account despite being in receipt of notice of dispute and rescission. 
7. Violation of Fair Debt Collection Practices Act ( FDCPA ), 15 U.S.C. 1692e ( 8 ) MBFS continued collection activities and made false representations about the legal status of the debt after valid rescission and tender.

8. Common Law Conversion Wrongful repossession of the vehicle after extinguishment of their security interest constitutes conversion under Florida law ( McDonald v. Green Tree Servicing, LLC ). 

XXXX. XXXX XXXX XXXX XXXX concealment and misrepresentation in handling tender and rescission process. 

XXXX. XXXX XXXX Supporting This Complaint : Law or Case Authority 12 CFR 1026.23 ( a ) ( 2 ) Consumer may rescind by any written means.

12 CFR 1026.23 ( d ) ( 1 ) - ( 2 ) Creditor must cancel security interest and return funds first before demanding anything from consumer. 
Beach v. Ocwen Fed. Bank, 523 U.S. 410 ( 1998 ) Rescission voids security interests by operation of law. 
Handy v. Anchor Mortgage Corp., XXXX XXXX XXXX ( XXXX Cir. XXXX ) Strict compliance with rescission rights required ; no creditor discretion. 
XXXX XXXX First Government Mortgage and XXXX XXXX, XXXX XXXX XXXX ( XXXX XXXX. XXXX ) Post-rescission obligations are mandatory. 
XXXX XXXX XXXX XXXX XXXX, XXXX, XXXX So. XXXX XXXX ( XXXX XXXX XXXX XXXX ) Wrongful repossession constitutes conversion. 
XXXX v. XXXX XXXX XXXX, XXXX, XXXX XXXX XXXX ( XXXX Cir. XXXX ) Furnishing false credit information after dispute violates FCRA. 
IV. Notice of Fault and Final Demand to Cure : NOTICE OF FAULT : MBFS is at fault for : Breaching federal and state laws. 

Refusing lawful tender of payment. 

Refusing to perform rescission duties. 

Wrongfully repossessing property. 

Falsely reporting derogatory information.

Company response to consumer: Closed with explanation