Upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; breach of Regulation 14(3) of the Timeshare, Holiday Products, Resale and Exchange Contracts Regulations 2010 complaint against Mitsubishi HC Capital UK Plc, trading as Novuna Personal Finance
Financial Ombudsman decision DRN-4730700 of 2026-04-08T00:00:00+00:00. unfair credit relationship under Section 140A of the Consumer Credit Act 1974; breach of Regulation 14(3) of the Timeshare, Holiday Products, Resale and Exchange Contracts Regulations 2010 complaint against Mitsubishi HC Capital UK Plc, trading as Novuna Personal Finance. Outcome: Upheld.
Decision detail
| Reference | DRN-4730700 |
|---|---|
| Decision date | 2026-04-08T00:00:00+00:00 |
| Firm | Mitsubishi HC Capital UK Plc, trading as Novuna Personal Finance |
| Product | Personal loan |
| Claim type | unfair credit relationship under Section 140A of the Consumer Credit Act 1974; breach of Regulation 14(3) of the Timeshare, Holiday Products, Resale and Exchange Contracts Regulations 2010 |
| Outcome | Upheld |
| Remedy | The lender must: (1) Refund the difference between Mr A's repayments under the Credit Agreement and what he would have paid under Loan 1, adjusted for any settlement amounts and future repayments; (2) Refund annual management charges paid for Fractional Club membership; (3) Deduct the value of promotional giveaways used and the market value of holidays taken (or alternatively, deduct annual management charges for years in which holidays were taken); (4) Add simple interest at 8% per annum to net repayments from the date each was made until settlement; (5) Remove adverse credit file information recorded in connection with the Credit Agreement within six years of the decision; (6) If membership is still in place, indemnify Mr and Mrs A against all ongoing liabilities if they agree to hold or assign their interest in the allocated property to the lender. |
Summary
Mr A purchased Fractional Club timeshare membership in July 2016 for £7,200, financed by a £9,304 credit agreement from Novuna Personal Finance (Mitsubishi HC Capital UK Plc). The membership included both holiday rights and a share in the net sale proceeds of an allocated property. Mr A complained in May 2022 that the supplier had marketed the membership as an investment, contrary to Regulation 14(3) of the Timeshare Regulations, and that the lender had participated in an unfair credit relationship. An investigator upheld the complaint, but the lender disputed this and requested an ombudsman decision. The ombudsman upheld the complaint, finding that the supplier had breached Regulation 14(3) by marketing the membership as an investment opportunity offering financial returns, which was material to Mr A's decision to purchase and borrow. The ombudsman ordered the lender to refund the difference between what Mr A paid under the Credit Agreement and what he would have paid under his earlier loan, refund management charges, add interest, and remove adverse credit file information.
The Ombudsman's reasoning
The ombudsman found that the Fractional Club membership, while including an investment element (share in property sale proceeds), was prohibited from being marketed or sold as an investment under Regulation 14(3) of the Timeshare Regulations. Although the supplier included disclaimers in paperwork, the ombudsman considered what happened in practice rather than just the contemporaneous documentation. Given the inherent difficulty in marketing fractional ownership timeshares without implying investment returns, the lack of other significant selling points for Mr A (who already had holiday membership), and Mr A's own testimony that he was told the property would be rented out and sold at a profit, the ombudsman concluded the supplier breached Regulation 14(3). This breach was material to Mr A's decision to purchase, as evidenced by his focus on the investment aspect and the prospect of financial gain. The breach rendered the credit relationship unfair under Section 140A of the Consumer Credit Act 1974.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Mitsubishi HC Capital UK Plc, trading as Novuna Personal Finance, all decisions | 59 | 20% |
| Personal loan, all decisions | 22,070 | 30% |
Source
Read the original decision on the Financial Ombudsman Service website