Not upheld: unfair credit relationship under section 140A of the Consumer Credit Act 1974; section 75 claim; alleged irresponsible lending; alleged breach of Timeshare Regulations Regulation 14(3) complaint against Mitsubishi HC Capital UK Plc trading as Novuna Personal Finance

Decision detail

Summary

Ms H purchased Fractional Club membership on 13 June 2018 for £32,820, financing £12,800 through a credit agreement with the Lender. She later complained that the Lender acted unfairly by being party to an unfair credit relationship and by rejecting her section 75 claim. Ms H claimed the membership was misrepresented as an investment and that she could not afford the repayments. The ombudsman found that section 75 does not apply because the purchase price exceeded £30,000, and that the credit relationship was not unfair under section 140A because Ms H had declared sufficient employment income at the time of sale, provided no consistent evidence of unaffordability, and did not demonstrate that any alleged breach of the Timeshare Regulations materially influenced her decision to purchase. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that section 75 of the CCA does not apply because the cash price of £32,820 exceeded the £30,000 threshold. Regarding section 140A, the ombudsman concluded the credit relationship was not unfair because: (1) Ms H signed a declaration stating she was employed with sufficient income, and the Lender was entitled to rely on this; (2) Ms H provided no consistent or clear evidence that the loan was unaffordable; (3) even if the Supplier breached Regulation 14(3) by marketing the membership as an investment, this did not materially influence Ms H's decision to purchase, as she primarily sought holiday rights and used the membership accordingly; (4) Ms H did not demonstrate she was subject to unfair sales pressure, as she had a 14-day cooling-off period and subsequently referred family members; and (5) the evidence did not support claims of misrepresentation regarding rental income potential.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website