Not upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; alleged breach of Regulation 14(3) of the Timeshare Regulations 2010; alleged mis-selling of timeshare as investment; alleged pressure and unfair contract terms complaint against Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance

Decision detail

Summary

Mr P complained that Mitsubishi HC Capital UK PLC (trading as Novuna Personal Finance) was party to an unfair credit relationship when it financed his purchase of Fractional Club timeshare membership for £15,430 in August 2018. Mr P alleged the Supplier breached Regulation 14(3) of the Timeshare Regulations by marketing the product as an investment, and that he and Mrs P were pressured into the purchase. The ombudsman found that while a breach of Regulation 14(3) was possible, the evidence showed Mr and Mrs P were motivated by holiday benefits rather than investment returns, making any regulatory breach immaterial to their decision. Mr P's witness statement contained inconsistencies and appeared influenced by knowledge of similar cases. The ombudsman concluded the credit relationship was not unfair under Section 140A and rejected the complaint.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A analysis, examining whether regulatory breaches (potential breach of Regulation 14(3) prohibiting marketing timeshares as investments) rendered the credit relationship unfair. The key finding was that even if the Supplier breached Regulation 14(3) by marketing the product as an investment, Mr and Mrs P's purchase decision was motivated by holiday benefits rather than investment returns, as evidenced by sales notes and inconsistencies in Mr P's testimony. The ombudsman found that Mr P's witness statement was likely influenced by knowledge of similar cases and contained inherent inconsistencies that undermined its reliability. Regulatory breaches do not automatically create unfairness; their impact must be assessed in context. Since the breach (if it occurred) was not material to the purchase decision, the credit relationship was not rendered unfair.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website