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

Decision detail

Summary

Mrs B purchased a Fractional Club timeshare membership for £14,704 in April 2018, financed by a £17,692 loan from Novuna Personal Finance. The timeshare included a share in the net sale proceeds of an allocated property. Mrs B complained that the product was misrepresented, that the supplier breached contract by not providing promised holiday availability, that the credit relationship was unfair under Section 140A, and that commission paid to the supplier was undisclosed. The ombudsman found no evidence of actionable misrepresentation or breach of contract. Regarding the unfair credit relationship claim, the ombudsman held that even if the supplier breached the prohibition on marketing timeshares as investments, this would not render the credit relationship unfair because Mrs B's purchase was not motivated by the prospect of financial gain. The commission of 4% was low and did not create unfairness. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic assessment of the credit relationship under Section 140A, considering the supplier's sales practices, information provision, commission arrangements, and regulatory compliance. The key finding was that Mrs B's purchase was not motivated by the prospect of financial gain from the property share, but rather by the desire for holiday accommodation and fractional ownership. Even if the supplier breached Regulation 14(3) by marketing the product as an investment, this would not have rendered the credit relationship unfair because it was not material to Mrs B's purchasing decision. The commission of 4% was low compared to the Supreme Court's threshold in Hopcraft, Johnson and Wrench (55%), and Mrs B had sufficient information about the cost of credit to make an informed decision. No actionable misrepresentation or breach of contract by the supplier was established.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website