Not upheld: Goods and services under S75 complaint against Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance

Decision detail

Summary

Mr G complained that Novuna Personal Finance acted unfairly by being party to an unfair credit relationship and by declining a Section 75 claim against the timeshare supplier. Mr G had financed a Fractional Club membership purchase through Novuna in May 2019. The complaint alleged the supplier misrepresented the membership as an investment in breach of Regulation 14(3) of the Timeshare Regulations, and that Novuna failed to disclose commission arrangements. The ombudsman found no actionable misrepresentation under Section 75, as the supplier's statements were either factually accurate or honestly held opinions. While accepting a possible breach of Regulation 14(3), the ombudsman concluded this was not material to Mr G's purchasing decision, as evidence showed he was primarily motivated by access to luxury holiday accommodation rather than investment returns. The ombudsman rejected arguments about irresponsible lending and undisclosed commission, finding the commission was low and would not have deterred Mr G. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A, finding that regulatory breaches do not automatically create unfairness. While accepting it was possible the Supplier breached Regulation 14(3) by marketing the membership as an investment, the ombudsman found this was not material to Mr G's decision-making. The evidence showed Mr G was primarily motivated by access to luxurious holiday accommodation and other benefits, not the prospect of financial gain from property appreciation. The commission was low (4% of amount borrowed) and would not have deterred Mr G from proceeding. The ombudsman rejected arguments about irresponsible lending, unauthorised credit broking, and unfair contract terms, finding no evidence of actual detriment to Mr G.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website