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

Decision detail

Summary

Mr G and Mrs G purchased a Fractional Club timeshare membership in September 2015, financing £3,000 through a credit agreement with the lender. In August 2022, Mr G raised complaints alleging the timeshare was misrepresented as an investment and that the lender was party to an unfair credit relationship. The lender rejected the Section 75 claim and the complaint was referred to the Financial Ombudsman Service. The ombudsman found the Section 75 claim was time-barred under the Limitation Act 1980 as it was raised more than six years after the purchase. Regarding the Section 140A unfair credit relationship claim, the ombudsman found insufficient evidence that any alleged breach of Regulation 14(3) (prohibition on marketing timeshares as investments) was material to the purchasing decision, particularly given credibility concerns about evidence provided after the investigator's view and relevant court judgments. The complaint was not upheld.

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 since the time of sale (10 September 2015) before the claim was notified to the lender (19 August 2022). Regarding the Section 140A unfair credit relationship claim, the ombudsman found: (1) no actionable misrepresentation regarding investment value or resale prospects; (2) even if Regulation 14(3) was breached by marketing as an investment, the evidence did not persuade that this was material to Mr G's purchasing decision, particularly given the timing and credibility concerns about the later evidence; (3) no fiduciary duty was owed by the supplier as credit broker; (4) no commission was paid at the time of sale; and (5) regulatory breaches do not automatically render a credit relationship unfair under Section 140A.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website