Not upheld: Goods and services under S75 complaint against Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance

Decision detail

Summary

Mr E purchased a Fractional Club timeshare membership for £11,499 in May 2017, financed by a credit agreement with Novuna Personal Finance. Over seven years later, he complained that the supplier had misrepresented the product as an investment and that the lender was party to an unfair credit relationship. The ombudsman found no actionable misrepresentations regarding profitability, property sale, or holiday availability. Although the supplier may have breached regulations prohibiting marketing timeshares as investments, this did not render the credit relationship unfair because Mr E's purchase decision was not motivated by the prospect of financial gain but rather by the opportunity to end ongoing membership costs. The undisclosed commission of £459.96 was too small to create unfairness. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A analysis, finding that regulatory breaches do not automatically create unfairness and must be considered in the round. The key finding was that Mr E's purchase was not motivated by the prospect of financial gain from the property share, despite the supplier's possible breach of Regulation 14(3) in marketing the product as an investment. The ombudsman rejected the supplier's alleged misrepresentations as either not factually untrue or not proven to have been made. The commission arrangement, while possibly undisclosed, was too small (4% of amount borrowed) to render the relationship unfair when compared to the Supreme Court's guidance in Hopcraft, Johnson and Wrench. The ombudsman found no evidence that Mr E would have made a different purchasing decision had there been fuller disclosure.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website