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

Decision detail

Summary

Mr H complained that Mitsubishi HC Capital UK Plc (trading as Novuna Personal Finance) acted unfairly by financing a timeshare purchase that was allegedly misrepresented as an investment in breach of timeshare regulations, and by participating in an unfair credit relationship. Mr H and Mrs H purchased Signature Collection timeshare membership in October 2015 for £11,695 (after trade-in), financed by a £28,020 loan. The timeshare included a share in an allocated Spanish property. Mr H alleged the supplier misrepresented the product as an investment and that the credit relationship was unfair. The ombudsman found no actionable misrepresentation and concluded that Mr H was primarily motivated by the desire to access luxury holiday accommodation, not investment returns, based on their long history as regular users of the supplier's products and their own testimony describing the membership as for 'pleasure'. Although a breach of Regulation 14(3) was possible, it was not material to the purchasing decision. The complaint was rejected on all grounds.

The Ombudsman's reasoning

The ombudsman found that while it was possible the supplier breached Regulation 14(3) by marketing the timeshare as an investment, this was not determinative. The key issue was whether such a breach materially influenced Mr H's decision to purchase. The ombudsman concluded that Mr H and Mrs H were primarily motivated by the desire to access luxury holiday accommodation in the specific allocated property, not by investment prospects. This conclusion was supported by: (1) their long history as regular users of the supplier's products for holidays; (2) their stated preference for luxury accommodation; (3) their initial cancellation during cooling-off period due to cost concerns, not investment doubts; (4) their later correspondence describing the membership as something owned for 'pleasure' rather than investment; and (5) the fact they actually decreased their property share compared to their existing fractional ownership. The ombudsman applied the principle from Plevin that regulatory breaches do not automatically render credit relationships unfair; the impact on the consumer must be considered holistically. The commission payment was minimal (0.44% of charge for credit) and did not create the extreme inequality of knowledge seen in comparable cases.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website