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

Decision detail

Summary

Mr G complained that Mitsubishi HC Capital UK PLC (trading as Novuna Consumer Finance) acted unfairly by being party to an unfair credit relationship and rejecting Section 75 claims relating to a timeshare purchase financed in 2013. Mr and Mrs G purchased Fractional Club membership (asset-backed with a share in property proceeds) for £10,998, financed by a loan in Mr G's name. The complaint was raised in November 2019, over six years later. The ombudsman found the Section 75 misrepresentation claim was time-barred under the Limitation Act 1980. While acknowledging the supplier may have breached Regulation 14(3) by marketing the membership as an investment, the ombudsman found this was not material to the purchase decision, as Mr and Mrs G's subsequent dissatisfaction related to holiday quality and availability rather than investment returns. The commission paid to the supplier (£985.24, or 5.34% of the charge for credit) was modest and did not render the relationship unfair. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A, considering whether any regulatory breaches or unfair practices rendered the credit relationship unfair. While acknowledging that a breach of Regulation 14(3) was possible, the ombudsman found this was not determinative. The key finding was that Mr and Mrs G's purchase decision was motivated by holiday benefits rather than investment returns, as evidenced by their subsequent complaints focusing on holiday availability and quality rather than investment performance. The ombudsman applied principles from Plevin and Carney, requiring that any breach must have been material to the purchasing decision. The Section 75 misrepresentation claim was time-barred under the Limitation Act 1980 (six years from 25 February 2013 to 29 November 2019). The commission was relatively modest (5.34% of charge for credit) compared to the 55% in Johnson v FirstRand, and the supplier was not acting as a separate agent but as part of its overall timeshare sales function.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website