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

Decision detail

Summary

Mr R purchased Fractional Club timeshare membership for £14,430 financed by the lender on 8 November 2017, which included a share in an allocated property's net sale proceeds. In May 2022, Mr R complained that the supplier misrepresented the product, breached contract, and that the lender participated in an unfair credit relationship and failed to pay Section 75 claims. The ombudsman found insufficient evidence of actionable misrepresentation, no breach of contract, and that Mr R's purchase was motivated by holiday rights rather than investment returns. Although the ombudsman acknowledged it was possible the supplier breached the Timeshare Regulations prohibition on marketing as an investment, this would not have changed Mr R's decision. The undisclosed commission of £577.20 (5.25% of borrowing) was not so high as to render the relationship unfair given Mr R had price information and wanted the product. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to assess fairness under Section 140A, considering the supplier's commercial conduct, information provision, commission arrangements, evidence of what was said at sale, and inherent probabilities. The ombudsman found that: (1) Mr R did not provide sufficient evidence of actionable misrepresentations by the supplier; (2) Mr R's purchase was not motivated by the prospect of financial gain from the property share, but rather by the holiday rights and general nature of the product; (3) even if the supplier breached Regulation 14(3) by marketing as an investment, this would not have changed Mr R's purchasing decision; (4) the commission of 5.25% was not so high as to render the relationship unfair, particularly given Mr R had the price information and wanted the product; (5) the supplier did not owe Mr R a fiduciary duty when acting as credit broker; (6) regulatory breaches do not automatically create unfairness under Section 140A but must be considered in the round with their actual impact.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website