Not upheld: Motor finance commission (DCA) complaint against Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance

Decision detail

Summary

Mr D borrowed £12,494 from Novuna in January 2015 to purchase a timeshare membership, repaying the loan in December 2015. In October 2023, he complained that commission paid by Novuna to the timeshare provider (acting as credit broker) was not disclosed and that the broker lacked proper permissions. The ombudsman found that while regulatory disclosure rules may have been breached, the Supreme Court's recent judgment in Hopcraft, Johnson and Wrench established that commission payments are lawful where no fiduciary duty is owed. The commission amount (9.75%) was not high, and Mr D would have proceeded with the loan regardless. The credit broker held necessary permissions. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the Supreme Court's recent judgment in Hopcraft, Johnson and Wrench, which held that commission payments to intermediaries are legal where the intermediary does not owe a fiduciary duty to the consumer. The ombudsman found the Supplier did not owe Mr D a fiduciary duty, so remedies for secret commission were not available. Even if regulatory rules on disclosure were breached, the commission amount (9.75%) was not high, and Mr D would have proceeded with the loan regardless given his desire for the membership and lack of alternative funding.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website