Not upheld: Section 75 misrepresentation claim rejection; Section 140A unfair credit relationship; unauthorised credit intermediary complaint against Mitsubishi HC Capital UK Plc trading as Novuna Personal Finance

Decision detail

Summary

Mr A and Mrs A purchased timeshare fractional club membership in May 2014 for £12,949, financed by a loan from Novuna Personal Finance. In November 2021, Mr A complained that the Supplier made misrepresentations about investment value and resale potential, and that the credit relationship was unfair. The Lender rejected all complaints. Mr A referred the matter to the FOS, raising Section 75 misrepresentation claims, Section 140A unfair credit relationship claims, and an unauthorised credit intermediary claim. The ombudsman found the Section 75 claim was time-barred under the Limitation Act 1980 as it was raised more than 6 years after the Time of Sale, and creditors can reasonably reject such claims. The Section 140A complaint was out of jurisdiction, and the unauthorised intermediary claim showed no financial loss. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that while the Section 75 complaint was made in time to the FOS (within 6 years of the Lender's refusal on 23 December 2021), the underlying Section 75 claim itself was time-barred under the Limitation Act 1980. The cause of action accrued on the Time of Sale (26 May 2014), and Mr A did not notify the Lender of the claim until 15 November 2021 - more than 6 years later. As a general rule, creditors can reasonably reject Section 75 claims that become time-barred under the Limitation Act, as it would be unfair to expect them to investigate claims so long after the liability arose when a limitation defence would be available in court. Regarding the unauthorised credit intermediary claim, even if the broker lacked proper permission, there was no demonstrable financial loss to Mr A as the lending appeared affordable and he was aware of the basic loan terms. The Section 140A complaint was out of jurisdiction as it was not referred to the FOS within the required timeframe.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website