Not upheld: unfair credit relationship under Section 140A CCA; connected lender liability under Section 75 CCA; alleged breach of Timeshare Regulations; undisclosed commission complaint against Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance

Decision detail

Summary

Mrs A purchased Fractional Club timeshare membership in February 2018 for £14,963, financed by a £14,693 credit agreement from the lender. Nearly six years later, she complained that the supplier misrepresented the product as an investment and that the credit relationship was unfair due to undisclosed commission and potential regulatory breaches. The ombudsman found no actionable misrepresentation under Section 75 CCA, as the investment element was truthful and booking availability was opinion. Under Section 140A CCA, the ombudsman found the credit relationship was not unfair: Mrs A was not pressured into the purchase, the commission at 4% was low and she had pricing information, and there was no evidence her purchase was motivated by investment returns. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A, considering regulatory breaches do not automatically create unfairness. On Section 75, no actionable misrepresentation was found: the investment element was truthful and the booking availability claim was opinion rather than fact. On Section 140A, the ombudsman found: (1) insufficient evidence of pressure despite a lengthy sales process; (2) no breach of Regulation 14(3) could be established as determinative given Mrs A's purchase motivation was not financial gain; (3) the commission at 4% was low compared to the Supreme Court's Hopcraft precedent (55%) and Mrs A had pricing information; (4) the supplier did not owe a fiduciary duty; and (5) Mrs A would have proceeded regardless of commission disclosure given her desire for the timeshare and lack of alternative funding means.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website