Not upheld: unfair credit relationship under Section 140A CCA; misrepresentation claims under Section 75 CCA; alleged breach of Timeshare Regulations 2010; undisclosed commission arrangements complaint against Mitsubishi HC Capital UK PLC

Decision detail

Summary

Miss A complained that Mitsubishi HC Capital UK PLC acted unfairly by financing timeshare purchases that were allegedly misrepresented as investments and holiday accommodation guarantees, and by failing to disclose commission arrangements with the Supplier. She also claimed the credit relationship was unfair under Section 140A of the CCA due to the Supplier's breach of Regulation 14(3) of the Timeshare Regulations. The ombudsman found no actionable misrepresentations, as Miss A's own statement contained no mention of being told memberships were investments or that holiday accommodation would be secured. Although a possible breach of Regulation 14(3) was acknowledged, the ombudsman found this would not have materially influenced Miss A's decision to purchase, as she provided no evidence that investment returns motivated her. The commission rate of 3.71% of the charge for credit was found to be low and not sufficiently extreme to render the relationship unfair. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A, considering all relevant circumstances rather than treating regulatory breaches as automatically creating unfairness. The key finding was that Miss A's own testimony did not support claims of misrepresentation or that she was motivated by investment potential. The ombudsman found that even if a breach of Regulation 14(3) occurred, it would not have materially influenced Miss A's purchasing decision, as she provided no evidence that investment returns motivated her purchase. The ombudsman rejected the PR's generic template complaint letter as carrying little weight and found the commission arrangements were not sufficiently extreme to render the relationship unfair, particularly given the low commission rate (3.71% of charge for credit) compared to the 55% in the Johnson case.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website