Not upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; misrepresentation claim under Section 75 of the Consumer Credit Act 1974; alleged breach of Regulation 14(3) of the Timeshare Regulations 2010; undisclosed commission; unfair contract terms complaint against Mitsubishi HC Capital UK Plc

Decision detail

Summary

Mrs W purchased a Fractional Club timeshare membership in October 2012 using credit from Mitsubishi HC Capital UK Plc, borrowing £13,445 to be repaid at £211 monthly over 180 months. She complained in October 2019 (over six years later) alleging misrepresentation, breach of contract, unfair credit relationship, and breach of the Timeshare Regulations prohibition on marketing timeshares as investments. The ombudsman found the Section 75 misrepresentation claim time-barred under the Limitation Act 1980 and rejected the Section 140A unfair relationship claim, finding the lending was affordable, any regulatory breach regarding investment marketing was not material to her purchase decision, the commission was not disproportionately high, and Mrs W had adequate price information. The ombudsman gave little weight to evidence submitted years after the original complaint, particularly an undated witness statement submitted in December 2023 after influential court judgments on timeshare complaints.

The Ombudsman's reasoning

The ombudsman found the Section 75 claim time-barred because the cause of action accrued on 31 October 2012 (date of purchase) and the claim was not made until 2 October 2019, exceeding the six-year limitation period under the Limitation Act 1980. The ombudsman rejected arguments that Section 32 of the Limitation Act (fraud, concealment, or mistake) applied, finding that Mrs W's concerns would have become apparent shortly after purchase and the later-submitted Deed of Assignment did not demonstrate a newly discoverable cause. Regarding Section 140A, the ombudsman found the credit relationship was not unfair because: (1) the lending was affordable; (2) there was insufficient evidence of undue pressure; (3) even if Regulation 14(3) was breached regarding marketing as an investment, this was not a material motivating factor in Mrs W's purchase decision; (4) the commission at 5.61% of charge for credit was not disproportionately high compared to the Supreme Court's Hopcraft decision; (5) Mrs W had adequate price information to compare options; and (6) the Supplier did not owe a fiduciary duty to Mrs W. The ombudsman placed little weight on the undated witness statement submitted in December 2023, finding it likely influenced by the Shawbrook judgment and inconsistent with the original Complaint Form which made no mention of investment-related marketing.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website