Not upheld: Section 75 misrepresentation claim (time-barred) and Section 140A unfair credit relationship (alleged misrepresentations about investment returns, inadequate creditworthiness checks, undisclosed commission) complaint against Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance

Decision detail

Summary

Mr N purchased an upgraded Fractional Club timeshare membership in November 2018 for £24,622 (reduced to £5,991 after trade-in) and financed £13,546 through an interest-free loan arranged by the Supplier with the Lender, repayable over 12 months. In April 2025, more than six years later, Mr N complained that the Lender was responsible for the Supplier's alleged mis-selling and sought redress under Section 75 of the Consumer Credit Act (misrepresentation) and Section 140A (unfair credit relationship). The ombudsman rejected all complaints: the Section 75 claim was time-barred under the Limitation Act 1980, and the Section 140A claims lacked sufficient evidence of misrepresentations about investment returns, improper creditworthiness checks, or unfair commission arrangements. The ombudsman noted that Mr N's witness statement was vulnerable to memory interference given the six-year delay and that no commission was actually paid by the Lender to the Supplier, distinguishing this case from recent Supreme Court precedent on undisclosed commissions.

The Ombudsman's reasoning

The ombudsman found that Mr N's Section 75 misrepresentation claim was time-barred under the Limitation Act 1980, as it was made more than six years after the cause of action accrued. Regarding Section 140A unfair credit relationship claims, the ombudsman found insufficient persuasive evidence of misrepresentations about investment returns, vague allegations about holiday access, and no evidence that the loan was unaffordable. The ombudsman noted that Mr N's witness statement, prepared over six years after the events, was vulnerable to memory interference, particularly given the intervening Shawbrook & BPF v FOS judgment which highlighted timeshare-as-investment issues. Crucially, no commission was actually paid by the Lender to the Supplier, distinguishing this case from the Supreme Court's Hopcraft, Johnson and Wrench decision. The ombudsman concluded that even if regulatory guidance on commission disclosure was breached, this would not render the credit relationship unfair given the absence of commission, the interest-free nature of the loan, and the lack of evidence of extreme inequality of knowledge.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website