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

Decision detail

Summary

Mr O financed a £15,430 Fractional Club timeshare membership purchase with a loan from Novuna Personal Finance. The membership included a share in a Spanish property's net sale proceeds. Mr O complained that the Supplier misrepresented the product as an investment in breach of Regulation 14(3) of the Timeshare Regulations, and that the lender was party to an unfair credit relationship. The ombudsman found that while a breach of Regulation 14(3) was possible, it was not material to Mr O and Mrs B's purchasing decision, which was primarily motivated by holiday accommodation rather than financial gain. The ombudsman rejected both the Section 75 misrepresentation claim and the Section 140A unfair relationship claim, finding no basis for compensation.

The Ombudsman's reasoning

The ombudsman found that while the Supplier may have breached Regulation 14(3) by marketing the membership as an investment, this breach was not material to Mr O and Mrs B's purchasing decision. The ombudsman concluded that Mr O and Mrs B's primary motivation was holiday accommodation rather than financial gain, based on their own testimony and the leading nature of the questionnaire used. The ombudsman applied case law establishing that regulatory breaches do not automatically create unfairness under Section 140A; the breach must be material to the consumer's decision to enter the agreement. The ombudsman rejected the argument that a breach of Regulation 14(3) alone was sufficient to establish an unfair credit relationship.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website