Mercedes-Benz Financial Services agrees to amend hire purchase agreement, UK watchdog says

(Reuters) - Britain's financial watchdog said that Mercedes-Benz Financial Services (UK) has agreed to make changes to its hire purchase agreements on consumer vehicles that contain an excess mileage charge and provide redress to affected customers.

The company, which provides automotive financial services, will provide redress to consumers who have entered into contracts since January 2014, the Financial Conduct Authority said on Thursday.

The regulator said on Wednesday it was considering a formal redress scheme to compensate thousands of consumers that were potentially overcharged for motor finance.

The scheme would force companies that overcharged for motor finance to pay compensation to consumers, the regulator said, adding that it will announce further steps in September.

The Milton Keynes-based group also agreed that new contracts entered into from Dec. 31 will contain an excess mileage term that will clarify how the excess mileage charge will be calculated.

The regulator had earlier said that it was concerned that the excess mileage term was unclear how the consumer's permitted mileage would be calculated in the event that the contract was terminated part of the way through a 12-month period.

(Reporting by Radhika Anilkumar in Bengaluru; Editing by Sonia Cheema)