Not upheld: unfair credit relationship (Section 140A of Consumer Credit Act 1974), Section 75 claim rejection, alleged breach of Timeshare Regulations Regulation 14(3), undisclosed commission, inadequate information provision complaint against Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance

Decision detail

Summary

Mrs B purchased a Fractional Club timeshare membership in September 2018 for £11,899.00, financed by a £16,213.00 credit agreement from Novuna Personal Finance. The product included a share in a Tenerife property. In April 2025, over six years later, Mrs B complained that the lender acted unfairly by rejecting her Section 75 claim and by being party to an unfair credit relationship. She alleged the supplier had misrepresented the product as an investment in breach of the Timeshare Regulations, failed to provide adequate information about ongoing costs, and that an undisclosed commission of £147.54 rendered the relationship unfair. The ombudsman rejected all grounds: the Section 75 claim was time-barred under the Limitation Act 1980; any breach of the Timeshare Regulations was not material to Mrs B's decision as her own testimony indicated she was motivated by holiday benefits; and the commission level was not high enough to create unfairness, particularly given Mrs B's desire for the product and lack of alternative funding. No remedy was awarded.

The Ombudsman's reasoning

The ombudsman applied a multi-layered analysis. First, regarding the Section 75 claim: the cause of action accrued at the time of sale (23 September 2018), and the claim was not raised until 22 April 2025 (over six years later), making it time-barred under the Limitation Act 1980. It was reasonable for the lender to reject a time-barred claim. Second, regarding Section 140A unfairness: although the ombudsman accepted it was possible the supplier breached Regulation 14(3) by marketing the product as an investment, this was not material to Mrs B's decision because her own testimony indicated she was motivated by the holiday benefits and apartment quality, not investment prospects. The ombudsman found Mrs B's statement notably lacked detail about investment motivation despite being made in contemplation of proceedings. Third, regarding commission: applying the Supreme Court's Hopcraft, Johnson and Wrench principles, the commission of £147.54 (0.91% of amount borrowed) was not high enough to render the relationship unfair, particularly given Mrs B wanted the product and had no alternative means to pay. The supplier did not owe a fiduciary duty to Mrs B. The ombudsman concluded that regulatory breaches do not automatically create unfairness under Section 140A; such breaches must be considered in the round with their actual impact on the complainant.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website