Not upheld: Goods and services under S75 complaint against Mitsubishi HC Capital UK Plc (trading as Novuna)

Decision detail

Summary

Mrs B complained that Mitsubishi HC Capital UK Plc (Novuna) acted unfairly by being party to an unfair credit relationship and rejecting her Section 75 claim regarding a Fractional Club timeshare membership purchased in November 2018 for £17,834. The complaint alleged misrepresentation by the Supplier (including marketing as an investment in breach of Regulation 14(3)), pressured selling, insufficient information disclosure, unfair contract terms, and undisclosed commission arrangements. The ombudsman found that while the Supplier may have breached the prohibition on marketing timeshares as investments, this was not material to Mrs B's decision, which was primarily motivated by holiday interests. The ombudsman rejected the pressured selling allegation as lacking credible evidence and found the 3.71% commission was not disproportionately high. Accordingly, the complaint was not upheld and no remedy was ordered.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A, considering the Supplier's sales practices, information provision, commission arrangements, and regulatory compliance. While acknowledging that the Supplier may have breached Regulation 14(3) by marketing the membership as an investment, the ombudsman found this was not material to Mrs B's decision, which was primarily motivated by holiday interests rather than investment returns. The ombudsman rejected the pressured selling allegation as lacking credible evidence, noting Mrs B did not mention it in her witness statement and had the right to cancel during the cooling-off period. Regarding commission, the ombudsman distinguished this case from the Supreme Court's Hopcraft decision, finding the 3.71% commission was not disproportionately high and would not have deterred Mrs B from proceeding. The ombudsman concluded that even with fuller disclosure, Mrs B would have taken out the loan as she wanted the membership and had no alternative means to pay.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website