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

Decision detail

Summary

Mr T purchased a Fractional Club timeshare membership in November 2015 for £13,421 using a credit agreement with Novuna Personal Finance. The membership included a share in an allocated property's net sale proceeds. Mr T complained in November 2023 (approximately 8 years later) that the Lender participated in an unfair credit relationship because the Supplier marketed the product as an investment in breach of Regulation 14(3) of the Timeshare Regulations and failed to disclose commission arrangements. The ombudsman found that although the Supplier may have breached Regulation 14(3), Mr T's purchase was not primarily motivated by the investment element, and no commission was paid at the time of sale. Accordingly, the ombudsman concluded the credit relationship was not unfair and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A analysis, considering that regulatory breaches do not automatically render a credit relationship unfair. Although the Supplier may have breached Regulation 14(3) by marketing the product as an investment, the ombudsman found that Mr T's purchase motivation was not primarily driven by the prospect of financial gain from the investment element. The ombudsman noted inconsistencies and potential influences in Mr T's testimony, particularly given its timing after the Shawbrook judgment. Regarding commission, the ombudsman distinguished the case from Hopcraft, Johnson and Wrench because no commission was actually paid at the time of sale, and there was no evidence of a fiduciary duty owed by the Supplier to Mr T or of concealment of commercial ties.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website