Not upheld: misrepresentation claim handling under Section 75 of the Consumer Credit Act 1974; unfair credit relationship complaint against Mitsubishi HC Capital UK PLC (trading as Novuna Personal Finance)

Decision detail

Summary

Mr W purchased FPOC timeshare membership on 5 November 2013 using finance from Novuna and alleged the supplier misrepresented the product as a property investment with guaranteed exit and exclusive resort access. On 6 December 2022, approximately nine years later, Mr W made a Section 75 claim against Novuna for misrepresentation. Novuna rejected the claim citing the Limitation Act 1980 as a defence. The ombudsman upheld Novuna's position, finding that the six-year limitation period for misrepresentation claims had expired before Mr W notified Novuna of his claim, and creditors can reasonably reject time-barred Section 75 claims. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the principle that creditors can reasonably reject Section 75 claims that are time-barred under the Limitation Act 1980. A claim for misrepresentation under Section 75 mirrors a claim against the supplier and has a six-year limitation period from the date of the cause of action. The cause of action accrued on the time of sale (5 November 2013) when Mr W entered into the purchase based on the alleged misrepresentations. Since Mr W did not notify Novuna of his claim until 6 December 2022—more than nine years later—the claim was time-barred. It would not be fair to expect creditors to investigate claims so long after the liability arose when a limitation defence would be available in court.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website