Not upheld: connected lender liability (Section 75 CCA), unfair credit relationship (Section 140A CCA), irresponsible lending, non-disclosure of commission complaint against Mitsubishi HC Capital UK Plc

Decision detail

Summary

Mr B complained that Mitsubishi HC Capital UK Plc acted unfairly by financing a timeshare purchase that was misrepresented by the supplier and by rejecting his Section 75 and Section 140A claims under the Consumer Credit Act 1974. The ombudsman found insufficient evidence of factual misrepresentation regarding guaranteed end dates, exclusivity, or alternative release methods. Any breach of contract regarding future property sale proceeds was uncertain and not currently actionable. Critically, the lender ceased to be the creditor when it sold the debt to a third party, making a Section 140A unfair relationship claim impossible to pursue against the lender. The lending was not found to be irresponsible, as the loan did not become unaffordable until approximately two years after opening. The ombudsman concluded the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that: (1) there was insufficient evidence of factual misrepresentation by the supplier regarding guaranteed end dates, exclusivity, or alternative release methods; (2) any breach of contract regarding property sale proceeds was uncertain and lay in the future, not actionable at present; (3) the lender ceased to be the creditor when it sold the debt to C, making a Section 140A unfair relationship claim impossible to pursue against the lender; (4) the loan was not demonstrated to be unaffordable at the time of sale, as arrears only occurred two years later; (5) the commission disclosure failure, if it occurred, was not material given the low commission amount (4%) and Mr B's clear desire for the timeshare; and (6) the supplier was not acting as a fiduciary or agent for Mr B but as a seller of contractual rights, with no separate credit broking service.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website