Upheld: breach of timeshare regulations (Regulation 14(3)) and unfair credit relationship under Section 140A of the Consumer Credit Act 1974 complaint against Mitsubishi HC Capital UK Plc (trading as Novuna Personal Finance)
Financial Ombudsman decision DRN-6420158 of 2026-06-10T00:00:00+00:00. breach of timeshare regulations (Regulation 14(3)) and unfair credit relationship under Section 140A of the Consumer Credit Act 1974 complaint against Mitsubishi HC Capital UK Plc (trading as Novuna Personal Finance). Outcome: Upheld.
Decision detail
| Reference | DRN-6420158 |
|---|---|
| Decision date | 2026-06-10T00:00:00+00:00 |
| Firm | Mitsubishi HC Capital UK Plc (trading as Novuna Personal Finance) |
| Product | Other regulated product |
| Claim type | breach of timeshare regulations (Regulation 14(3)) and unfair credit relationship under Section 140A of the Consumer Credit Act 1974 |
| Outcome | Upheld |
| Remedy | The lender must: (1) refund all repayments under the credit agreement and cancel any outstanding balance; (2) refund annual management charges and the trade-in value of the trial membership; (3) deduct the value of promotional giveaways used and the market value of holidays taken; (4) add simple interest at 8% per annum to net repayments from the date each was made; (5) remove adverse credit file information within six years; (6) indemnify Miss C against ongoing liabilities if membership is still in place, provided she assigns or holds the property interest for the lender. |
Summary
Miss C purchased Fractional Club membership in August 2018 for £14,573, financed by a credit agreement with Mitsubishi HC Capital UK Plc. The Fractional Club was asset-backed, offering both holiday rights and a share in property sale proceeds. Miss C complained that the supplier marketed and sold the membership as an investment, contrary to Regulation 14(3) of the Timeshare Regulations, and that this breach rendered the credit relationship unfair. The ombudsman upheld the complaint, finding that the supplier's training materials and sales presentations emphasized property ownership and financial returns, implying that future profits were a good reason to purchase. This was material to Miss C's decision to enter the credit agreement. The ombudsman ordered the lender to refund all repayments, annual management charges, and the trial membership trade-in value, with interest, and to indemnify Miss C against ongoing liabilities.
The Ombudsman's reasoning
The ombudsman found that although the Fractional Club membership included an investment element (share in property sale proceeds), the supplier breached Regulation 14(3) by marketing and selling it as an investment. The training materials and sales presentations emphasized property ownership, financial returns, and the prospect of receiving money back, which implied that future financial returns were a good reason to purchase the product. This was material to Miss C's decision to enter the credit agreement. The ombudsman rejected the lender's arguments that Miss C's testimony was unreliable or that her motivations were primarily holiday-focused, finding that the investment element was a key motivating factor. The breach of the timeshare regulations rendered the credit relationship unfair under Section 140A of the CCA.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Mitsubishi HC Capital UK Plc (trading as Novuna Personal Finance), all decisions | 79 | 16% |
| Other regulated product, all decisions | 52,408 | 30% |
Source
Read the original decision on the Financial Ombudsman Service website