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

Decision detail

Summary

Mr S complained that Novuna Personal Finance acted unfairly by being party to an unfair credit relationship and by declining a Section 75 claim against the timeshare supplier. Mr S and his wife purchased Signature Collection timeshare membership in August 2019 for £17,254, financed by a £16,455 loan from Novuna. The membership included holiday rights and a share in the net proceeds of an allocated property. Mr S alleged the supplier misrepresented the product as an investment and that Novuna failed to disclose commission arrangements. The ombudsman found no actionable misrepresentation, as statements about investment potential were opinions honestly held, and that even if the supplier breached the prohibition on marketing timeshares as investments, this would not have influenced Mr S's decision, which was primarily motivated by the superior holiday options offered. The undisclosed commission of 4% was not disproportionately high. Accordingly, the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A, finding that regulatory breaches do not automatically render a credit relationship unfair. The key finding was that Mr S's purchase was motivated primarily by the holiday options and higher standard of accommodation offered, not by the prospect of financial gain from the property share. Even if the supplier breached Regulation 14(3) by marketing the membership as an investment, this would not have materially influenced Mr S's decision. The commission of 4% was not disproportionately high compared to the Johnson case (55%), and Mr S had full information about the cost of the credit and membership. The ombudsman rejected arguments about harassment, coercion, unfair contract terms, and insufficient information disclosure, finding none were material to the purchasing decision.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website