Not upheld: unfair credit relationship under section 140A CCA; section 75 CCA liability; alleged misrepresentation; alleged pressure; alleged breach of Timeshare Regulations; undisclosed commission complaint against Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance (formerly Hitachi Personal Finance)

Decision detail

Summary

Mr A complained that Mitsubishi HC Capital UK PLC (trading as Novuna Personal Finance) acted unfairly by being party to an unfair credit relationship and by rejecting his section 75 claim regarding a Fractional Club timeshare purchased in May 2016 for £11,154 financed by a £14,614 loan. Mr A alleged the supplier misrepresented the product as an investment, pressured him into the purchase, included unfair contract terms, breached the Timeshare Regulations by marketing it as an investment, and that the lender failed to disclose commission of £132.99 paid to the supplier. The ombudsman rejected all grounds, finding the misrepresentation claim time-barred, the pressure allegation unsupported (Mr A had a cooling-off period and upgraded in 2019), any breach of the Timeshare Regulations immaterial as the investment element did not motivate the purchase, and the undisclosed commission too low (0.84% of charge for credit) and circumstances too different from Supreme Court precedent to constitute unfairness.

The Ombudsman's reasoning

The ombudsman applied section 140A of the CCA and section 75 of the CCA to assess fairness. On section 75, the misrepresentation claim was time-barred under the Limitation Act 1980 (six years from Time of Sale), and the alleged breach of contract regarding holiday availability was not substantiated as the Purchase Agreement stated availability was subject to demand. On section 140A, the ombudsman considered: (1) pressure - rejected as Mr A had a 14-day cooling-off period he did not use and upgraded in 2019; (2) misrepresentation regarding investment - rejected as the property share was genuinely an investment and telling prospective members this was not untrue; (3) breach of regulation 14(3) - found it possible but not determinative, as Mr A's own evidence showed the investment element was not a motivating factor in his purchase decision; (4) insufficient information on ongoing costs - rejected as no evidence the costs were applied unfairly in practice or that Mr A would not have proceeded with better disclosure; (5) undisclosed commission - rejected by reference to the Supreme Court's Hopcraft, Johnson and Wrench judgment, distinguishing it on grounds that the commission was very low (0.84% of charge for credit versus 55% in Johnson's case), Mr A had price information and could compare options, there was no evidence of improper commercial tie or disproportionate cost impact, and the supplier was not acting as Mr A's agent but as seller of the timeshare product.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website