Not upheld: unfair credit relationship; alleged breach of Timeshare Regulations Regulation 14(3); unauthorised broker arrangement; unfair contract terms; insufficient information provision complaint against Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance

Decision detail

Summary

Mrs P complained that Mitsubishi HC Capital UK PLC (trading as Novuna Personal Finance) was party to an unfair credit relationship when it provided a £16,281 loan for the purchase of Fractional Club timeshare membership in September 2019. The complaint alleged that the Supplier breached Regulation 14(3) of the Timeshare Regulations by marketing the product as an investment, that an unauthorised broker arranged the credit, and that unfair contract terms and insufficient information were provided. The ombudsman found that while a breach of Regulation 14(3) was possible, it did not automatically render the credit relationship unfair. The ombudsman concluded that Mrs and Mr P were likely motivated by holiday benefits rather than investment prospects, based on the unreliability of their witness statement (drafted after a similar successful case) and their previous complaints which made no mention of the investment element. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied Section 140A of the CCA, which requires consideration of whether a credit relationship was unfair in light of all circumstances. The ombudsman found that while the Supplier may have breached Regulation 14(3) by marketing the product as an investment, this did not automatically render the credit relationship unfair. The key issue was whether the alleged breach materially influenced Mrs and Mr P's decision to purchase. The ombudsman found the witness statement unreliable due to its timing (after the Shawbrook judgment), similarity to other statements from the same representative, and inconsistency with Mrs P's own previous complaints which made no mention of the investment element. The ombudsman concluded that Mrs and Mr P were likely motivated by the holiday benefits rather than investment prospects, and therefore any breach of Regulation 14(3) was not material to the fairness of the credit relationship.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website