Upheld: irresponsible lending - inadequate creditworthiness assessment complaint against Mitsubishi HC Capital UK Plc trading as Novuna Personal Finance
Financial Ombudsman decision DRN-6283821 of 2026-04-10T00:00:00+00:00. irresponsible lending - inadequate creditworthiness assessment complaint against Mitsubishi HC Capital UK Plc trading as Novuna Personal Finance. Outcome: Upheld.
Decision detail
| Reference | DRN-6283821 |
|---|---|
| Decision date | 2026-04-10T00:00:00+00:00 |
| Firm | Mitsubishi HC Capital UK Plc trading as Novuna Personal Finance |
| Product | personal loan |
| Claim type | irresponsible lending - inadequate creditworthiness assessment |
| Outcome | Upheld |
| Remedy | 1) Refund all repayments under the Credit Agreement including sums paid to settle the debt and cancel any outstanding balance; 2) Refund annual management charges paid for Fractional Club membership; 3) Deduct the value of any promotional giveaways used and market value of holidays taken using fractional points (or alternatively deduct annual management charges for years in which holidays were taken); 4) Add simple interest at 8% per annum to each net repayment from date paid until settlement; 5) Remove any adverse credit file information recorded in connection with the Credit Agreement within six years; 6) If membership still in place, indemnify Mrs B against all ongoing liabilities provided she agrees to hold the benefit of her interest in the Allocated Property for the lender or assign it to the lender. |
Summary
Mrs B complained that Mitsubishi HC Capital UK Plc (trading as Novuna Personal Finance) acted unfairly by lending her £16,736 over 15 years to purchase Fractional Club membership when the loan was unaffordable. Mrs B had a stated income of only £18,000 per annum, Mr B had recently retired due to ill health, and the loan extended 3 years past her state retirement age. The lender relied only on application information, credit reference agency data, and ONS figures without obtaining actual evidence of Mrs B's income and expenditure. Bank statements showed only a small monthly surplus with no evidence the loan was sustainable, and Mrs B could not comfortably afford the additional ongoing maintenance fees and holiday costs associated with the membership. The ombudsman upheld the complaint, finding the lender failed to conduct reasonable and proportionate checks and should have refused the loan. Full redress was ordered including refund of all repayments, management charges, interest, and credit file correction.
The Ombudsman's reasoning
The lender failed to take reasonable steps to ensure it did not lend irresponsibly. Given Mrs B's low income of £18,000, the high borrowing amount of £16,736 over 15 years, and the long loan term, greater thoroughness was required. The lender's reliance on income validation tools, credit reference agency data, and ONS figures was not a reasonable substitute for actual evidence of Mrs B's income and expenditure. Bank statements showed only a small monthly surplus with no evidence the loan was sustainable, particularly given Mr B's recent retirement due to ill health, Mrs B's age (55, extending the loan past retirement), and additional ongoing maintenance fees. The lender made no enquiries about how Mrs B would sustain the loan into her 70s. Even if the monthly cost was only £49 more than a previous loan, the previous loan was smaller and shorter-term, providing no evidence this loan was sustainable. The purpose of the loan was Fractional Club membership which required holiday costs Mrs B could not comfortably afford.
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