Upheld: Goods and services under S75 complaint against Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance

Decision detail

Summary

Mr G and Mrs G purchased Fractional Club membership (a timeshare product with holiday rights and a share in property sale proceeds) for £20,094 financed by Novuna in January 2019. Mr G alleges the Supplier marketed the membership as an investment, breaching Regulation 14(3) of the Timeshare Regulations, and that Novuna failed to accept his Section 75 claim. The ombudsman found that the Supplier's sales representatives and training materials did market the membership as an investment by emphasizing financial returns and property ownership benefits, despite contractual disclaimers. The ombudsman concluded this breach was material to Mr G's purchasing decision and rendered the credit relationship unfair under Section 140A of the CCA. Novuna was ordered to refund all repayments, cancel outstanding balances, refund management charges, add interest, and indemnify Mr G against ongoing liabilities.

The Ombudsman's reasoning

The ombudsman found that the Supplier breached Regulation 14(3) by marketing and selling Fractional Club membership as an investment, despite contractual disclaimers. The training materials and sales pitch emphasized financial returns, property ownership, and 'money back' after the membership term, which implied future financial gains. The prohibition on marketing timeshares as investments must be interpreted broadly to protect consumers. The ombudsman found that Mr G's testimony was credible and that the prospect of financial gain was a material factor in his decision to purchase. The breach of Regulation 14(3) rendered the credit relationship between Mr G and Novuna unfair under Section 140A of the CCA, as Mr G would not have entered into the Credit Agreement but for the Supplier's breach.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website