Not upheld: unfair debtor-creditor relationship; alleged breach of Timeshare Regulations Reg.14(3); irresponsible lending; undisclosed commission complaint against Mitsubishi HC Capital UK PLC (trading as Novuna)

Decision detail

Summary

Mr Z complained that Novuna acted unfairly in financing a timeshare purchase (FPOC Membership) for £26,121 in 2012. His professional representative alleged the Supplier breached Reg.14(3) by marketing the timeshare as an investment, that Novuna failed to assess affordability, and that undisclosed commission created unfairness. The ombudsman found that while a breach of Reg.14(3) was possible, it was not material to Mr Z's decision, as his original complaint (October 2016) made no such allegation and his later Statement (2023) was unreliable. Other complaints about lending assessment, pressure, and terms were not substantiated. The ombudsman concluded no unfair debtor-creditor relationship existed and dismissed the complaint.

The Ombudsman's reasoning

The ombudsman applied s.140A CCA unfair debtor-creditor relationship test, considering whether the Supplier's conduct (as Novuna's deemed agent under s.56) created unfairness. While acknowledging a possible breach of Reg.14(3) (marketing timeshare as investment), the ombudsman found this was not material to Mr Z's decision. The original complaint (October 2016) made no allegation of investment sales pitch; Mr Z's later Statement (2023) was given little weight due to memory degradation over 14 years and potential influence from the Shawbrook judgment. The ombudsman found Mr Z was primarily motivated by holiday benefits, not financial gain. Other complaints about lending assessment, pressure, availability, and fees were not substantiated or did not constitute unfairness. The commission payment issue was addressed but did not render the relationship unfair.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website