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

Decision detail

Summary

Mr B purchased two Fractional Club timeshare memberships in August 2018 and August 2019, financed by the lender, with the second purchase involving a trade-in of the first. Over six years later, in December 2025, Mr B (through a professional representative) complained that the lender acted unfairly by rejecting his section 75 claims for misrepresentation and breach of contract, and by being party to unfair credit relationships under section 140A of the CCA. The ombudsman found the section 75 claims were barred by limitation periods and financial limits under the CCA. Regarding section 140A, the ombudsman found that although the supplier may have breached Regulation 14(3) by marketing the product as an investment, this breach was not material to Mr B's purchasing decision, which was primarily motivated by holiday benefits and the desire to travel to specific destinations. The low commission amounts (0.91% and 4%) and information provided about the cost of credit did not render the relationships unfair. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to assess fairness under section 140A of the CCA, considering: (1) the supplier's commercial conduct and sales practices; (2) information provision at point of sale; (3) evidence of what was said/done at sale; (4) inherent probabilities; and (5) commercial arrangements including commission. The ombudsman found that regulatory breaches do not automatically create unfairness and must be considered in the round. Crucially, the ombudsman found that Mr B's purchases were not motivated by the prospect of financial gain from the investment element, but rather by the holiday benefits and desire to travel to specific destinations. Therefore, even if the supplier breached Regulation 14(3) by marketing the product as an investment, this breach would not have been material to Mr B's decision to purchase. The low commission amounts (0.91% and 4%) were not disproportionate, and Mr B had sufficient information about the cost of credit to make an informed decision.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website