Not upheld: Other regulated complaint complaint against Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance

Decision detail

Summary

Mrs C purchased Fractional Club timeshare membership in May 2019 for £13,994, financed by a 13-year loan from Novuna at 11.9% APR. She complained that the Supplier misrepresented the product as an investment and that the credit relationship was unfair under Section 140A due to alleged breaches of timeshare regulations, pressure during sales, and non-disclosure of commission. The ombudsman rejected both claims, finding that without Mrs C's direct testimony about the sales process, actionable misrepresentation could not be established, and that even if regulatory breaches occurred, they would not have influenced her purchasing decision since the investment element was not a motivating factor. The commission level (estimated at 4.38% of total credit charge) was not disproportionately high and would not have deterred her from proceeding.

The Ombudsman's reasoning

The ombudsman found that without direct testimony from Mrs C about what was said during the sales process, it was impossible to establish that the Supplier made actionable misrepresentations about holiday availability or investment potential. The ombudsman applied the Plevin principle that regulatory breaches do not automatically create unfairness under Section 140A and must be considered in the round. Crucially, the ombudsman found no evidence that Mrs C's purchasing decision was motivated by the investment element (share in the allocated property), meaning any breach of Regulation 14(3) would not have caused her to make a different decision. Regarding commission, the ombudsman distinguished Mrs C's case from the Supreme Court's Johnson case, finding the commission level (4.38% of total credit charge) was not disproportionately high and would have been understood by Mrs C had it been disclosed.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website