Not upheld: Other regulated complaint complaint against Mitsubishi HC Capital UK PLC, trading as Novuna Personal Finance

Decision detail

Summary

Mrs L purchased a Fractional Club timeshare membership for £12,986 in May 2018, financed by a £17,033 loan from the Lender. The membership included a share in an allocated property's net sale proceeds. Mrs L complained that the Supplier misrepresented the product as an investment and that the Lender failed to disclose a £681.32 commission paid to the Supplier. She also alleged the credit relationship was unfair under Section 140A of the Consumer Credit Act 1974. The ombudsman found no factual misrepresentation, no breach of contract, and that even if the Supplier had breached the Timeshare Regulations prohibition on marketing timeshares as investments, this was not material to Mrs L's decision, which was motivated by securing holidays rather than profit. The low commission level and adequate price disclosure meant the credit relationship was not unfair. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to assess fairness under Section 140A, considering the Supplier's commercial conduct, information provision, evidence of what was said at sale, inherent probabilities, and commission arrangements. While acknowledging competing evidence that the Supplier may have breached Regulation 14(3) by marketing the product as an investment, the ombudsman found this was not material to Mrs L's purchasing decision. The evidence suggested Mrs L was motivated by securing holidays with costs covered by eventual property sale proceeds, not by prospect of profit. The commission of 4% was found to be low and would not have deterred Mrs L from proceeding. The ombudsman distinguished the case from Hopcraft, Johnson and Wrench on the basis of the low commission level, adequate price disclosure, and absence of evidence of a fiduciary duty owed by the Supplier to Mrs L.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website