Upheld: irresponsible lending / unfair credit relationship / breach of Timeshare Regulations complaint against Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance (formerly Hitachi Capital Consumer Finance)
Financial Ombudsman decision DRN-6313037 of 2026-04-23T00:00:00+00:00. irresponsible lending / unfair credit relationship / breach of Timeshare Regulations complaint against Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance (formerly Hitachi Capital Consumer Finance). Outcome: Upheld.
Decision detail
| Reference | DRN-6313037 |
|---|---|
| Decision date | 2026-04-23T00:00:00+00:00 |
| Firm | Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance (formerly Hitachi Capital Consumer Finance) |
| Product | timeshare financing (credit agreement) |
| Claim type | irresponsible lending / unfair credit relationship / breach of Timeshare Regulations |
| Outcome | Upheld |
| Remedy | The Lender must: (1) Refund all of Mrs M's repayments under the Credit Agreement and cancel any outstanding balance; (2) Refund the difference between Fractional Club and Vacation Club annual management charges paid after the Time of Sale; (3) Deduct the value of promotional giveaways used and the market value of holidays taken using fractional points in excess of Vacation Club entitlements (proportionately); (4) Add simple interest at 8% per annum to net repayments from the date each was made until settlement; (5) Remove any adverse credit file information related to the Credit Agreement recorded within six years of the decision; (6) Indemnify Mr and Mrs M against all ongoing liabilities from their Fractional Club membership if they agree to hold the benefit of their interest in the Allocated Property for the Lender or assign it to the Lender. |
Summary
Mrs M and Mr M purchased Fractional Club timeshare membership for £7,130 on 20 May 2012, financed by a credit agreement in Mrs M's sole name with the Lender. The Fractional Club differed from their existing Vacation Club membership by including an asset-backed share in an Allocated Property with a shorter membership term. Mrs M complained that the Supplier breached Regulation 14(3) of the Timeshare Regulations by marketing the membership as an investment, and that the Lender participated in an unfair credit relationship. The Ombudsman upheld the complaint, finding that training materials and sales presentations explicitly positioned the Fractional Club as an investment offering financial returns, and that this breach was material to the couple's purchasing decision, as evidenced by their statements and the fact they paid over £7,000 more without receiving additional holiday rights. The Lender was directed to refund all repayments, cancel outstanding balances, refund the difference in annual management charges, add 8% simple interest, remove adverse credit information, and indemnify the couple 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 the Fractional Club as an investment. The training materials and sales presentation slides explicitly described the product as an investment offering the prospect of financial gain. The Ombudsman rejected the Lender's narrow interpretation of 'getting money back' as merely recovering the purchase price, finding instead that Mr and Mrs M's motivation for the purchase was the investment element and prospect of profit. The fact that they paid £7,000 more than their existing Vacation Club membership without receiving additional holiday rights, combined with their own statements about expecting to recover their money through the investment, demonstrated that the breach was material to their purchasing decision. This breach rendered the credit relationship unfair under Section 140A of the CCA.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance (formerly Hitachi Capital Consumer Finance), all decisions | 2 | 50% |
Source
Read the original decision on the Financial Ombudsman Service website