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-6265204 of 2026-04-15T00:00:00+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-6265204 |
|---|---|
| Decision date | 2026-04-15T00:00:00+00:00 |
| Firm | Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance |
| Product | credit agreement / 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 all repayments under the Credit Agreement including settlement sums and cancel any outstanding balance; (2) refund the difference between Fractional Club membership annual management charges and what non-factional membership charges would have been; (3) deduct the value of promotional giveaways used and the market value of holidays taken using excess Fractional points (or alternatively, annual management charges for years 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 within six years; (6) indemnify Mr S against ongoing liabilities if membership is still in place, provided Mr and Mrs S assign or hold the Allocated Property interest in trust for the lender. |
Summary
Mr and Mrs S purchased Fractional Club timeshare membership in July 2013 for £10,888, financed through a credit agreement with Novuna Personal Finance. The membership included a share in an allocated property's net sale proceeds. Mr S complained in May 2022 that the supplier marketed the product as an investment in breach of the Timeshare Regulations, rendering the credit relationship unfair. An investigator upheld the complaint, and the ombudsman's provisional decision agreed. The lender rejected the provisional decision but the ombudsman upheld the complaint in the final decision, finding the supplier had breached Regulation 14(3) by marketing the membership as an investment with profit potential, which was a motivating factor in Mr S's purchase. The ombudsman ordered comprehensive remedies including refund of all repayments, interest, and indemnification against ongoing liabilities.
The Ombudsman's reasoning
The ombudsman found that the supplier breached Regulation 14(3) of the Timeshare Regulations by marketing and selling Fractional Club membership as an investment to Mr S. Mr S's account that he was told he could invest in a property and make a profit was found to be consistent and compelling. The existence of disclaimers in the paperwork actually recognised there was a real risk of buyers forming the impression the product was an investment. The prospect of profit was a motivating factor in Mr S's purchasing decision, even if not the sole motivation. The breach rendered the credit relationship between Mr S and the lender 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 | 79 | 16% |
Source
Read the original decision on the Financial Ombudsman Service website