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; irresponsible lending complaint against Mitsubishi HC Capital UK Plc trading as Novuna Personal Finance
Financial Ombudsman decision DRN-6265289 of 2026-05-01T00:00:00+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; irresponsible lending complaint against Mitsubishi HC Capital UK Plc trading as Novuna Personal Finance. Outcome: Upheld.
Decision detail
| Reference | DRN-6265289 |
|---|---|
| Decision date | 2026-05-01T00:00:00+00:00 |
| Firm | Mitsubishi HC Capital UK Plc trading as Novuna Personal Finance |
| Product | timeshare with asset-backed fractional ownership and consumer credit agreement |
| 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; irresponsible lending |
| Outcome | Upheld |
| Remedy | The lender must: (1) refund all of Mr C's repayments under the credit agreement including settlement sums and cancel any outstanding balance; (2) refund the difference between management charges paid for the disputed membership and what would have been paid for his original membership, calculated proportionately; (3) deduct the value of promotional giveaways used and the market value of holidays taken using the additional fractional points (calculated proportionately); (4) add simple interest at 8% per annum to all net repayments from the date each was made until settlement; (5) remove any adverse credit file information related to the credit agreement within six years; (6) indemnify Mr C against all ongoing liabilities from the disputed purchase if the membership remains in place, provided Mr C assigns or holds the allocated property interest in trust for the lender. |
Summary
Mr C purchased additional Balkan Jewel timeshare fractional points (4,000 points for £4,200) on 17 June 2015, financed by the lender. The membership included a share in net sale proceeds of an allocated property. Mr C alleged that the supplier marketed the membership as an investment, telling him that purchasing additional points would increase his investment and improve his return, in breach of Regulation 14(3) of the Timeshare Regulations which prohibits marketing timeshares as investments. Although the supplier included disclaimers in contractual documentation, the ombudsman found that the practical sales process involved representing the product as an investment opportunity. The ombudsman concluded that this breach was material to Mr C's decision to purchase and borrow, rendering the credit relationship unfair under Section 140A of the Consumer Credit Act 1974. The lender was directed to refund all repayments, management charge differences, deduct benefits received, add interest, remove adverse credit information, and indemnify Mr C against ongoing liabilities.
The Ombudsman's reasoning
The ombudsman found that although the supplier included disclaimers stating the membership was not an investment, the practical reality of how the product was marketed and sold differed from the written documentation. The supplier's sales representatives likely led Mr C to believe that purchasing additional fractional points would increase his investment and improve his financial returns from the eventual sale of the allocated property. This constituted a breach of Regulation 14(3) which prohibits marketing or selling timeshares as investments. The ombudsman found that the prospect of financial gain was a material and motivating factor in Mr C's decision to purchase, and that he would not have proceeded without this investment motivation. The breach rendered the credit relationship unfair under Section 140A of the Consumer Credit Act 1974. The ombudsman rejected the lender's arguments that Mr C's testimony was unreliable or that investment motivations were not material to his decision.
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