Not upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; rejection of Section 75 claim; alleged breach of Timeshare Regulations Regulation 14(3); undisclosed commission complaint against Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance

Decision detail

Summary

Mr P purchased a Fractional Club timeshare membership in January 2019 for £15,430 using finance from Novuna Personal Finance. Over six years later, in April 2025, he complained that the lender acted unfairly by rejecting his Section 75 claim against the supplier for alleged misrepresentations and by being party to an unfair credit relationship under Section 140A of the Consumer Credit Act 1974. The alleged unfairness included: the supplier marketing the timeshare as an investment in breach of Regulation 14(3) of the Timeshare Regulations; undisclosed commission of £617.20 paid to the supplier; and inadequate information about ongoing costs. The ombudsman rejected all grounds: the Section 75 claim was time-barred as notification came more than six years after the purchase; the Section 140A claim failed because Mr P's evidence showed he was motivated by holiday benefits rather than investment returns, the commission was modest at 2.32% of the charge for credit, and the supplier did not owe a fiduciary duty to Mr P.

The Ombudsman's reasoning

The ombudsman found the Section 75 claim was time-barred under the Limitation Act 1980 as more than six years had passed between the Time of Sale (17 January 2019) and when the claim was first notified (10 April 2025). Regarding the Section 140A unfair credit relationship claim, the ombudsman concluded: (1) even if the Supplier breached Regulation 14(3) by marketing the timeshare as an investment, Mr P's evidence did not demonstrate this was material to his purchasing decision - he appeared motivated by holiday benefits rather than investment returns; (2) the commission of 2.32% of the charge for credit was not high enough to render the relationship unfair, particularly given Mr P wanted the product and had no alternative means of payment; (3) the Supplier did not owe Mr P a fiduciary duty when acting as credit broker; (4) regulatory breaches do not automatically create unfairness under Section 140A and must be considered in the round with their actual impact on the consumer.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website