Not upheld: Section 75 misrepresentation claim and Section 140A unfair credit relationship claim complaint against Mitsubishi HC Capital UK Plc

Decision detail

Summary

Mr O purchased a timeshare for £15,619 financed by a £19,001 loan from Mitsubishi HC Capital UK Plc in December 2017. He later defaulted on the loan, which was sold to a debt purchaser. In January 2023, Mr O complained that the Supplier had misrepresented the timeshare and that the credit relationship was unfair, seeking to hold the Lender liable under Sections 75 and 140A of the Consumer Credit Act 1974. The ombudsman found the misrepresentation allegations lacked sufficient evidence and that the Lender could not be held responsible for the fairness of the credit relationship because it had assigned the debt to a third party and was no longer the creditor. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that the alleged misrepresentations lacked sufficient persuasive evidence or were statements of honest opinion rather than false statements of fact. More significantly, because the Credit Agreement had been assigned to a third-party debt purchaser, the Lender was no longer the 'creditor' for purposes of Section 140A of the Consumer Credit Act 1974, meaning claims about unfair credit relationships could not succeed against the Lender. The affordability checks conducted by the Lender were proportionate given the loan characteristics and Mr O's financial position at the time, and there was no evidence the loan was unaffordable from the outset.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website