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

Decision detail

Summary

Mr K complained that Mitsubishi HC Capital UK PLC (trading as Novuna Personal Finance) acted unfairly by being party to an unfair credit relationship and by rejecting his Section 75 claims for misrepresentation and breach of contract relating to his purchase of Fractional Club timeshare membership in July 2019 for £7,986. The ombudsman found that while the supplier may have breached Regulation 14(3) of the Timeshare Regulations by marketing the product as an investment, and that commission (£319.44) was not disclosed, these breaches did not render the credit relationship unfair because Mr K's purchase was not motivated by the investment element and the low commission would not have changed his decision. The ombudsman rejected all grounds of complaint and found the lender acted fairly in rejecting the Section 75 claims.

The Ombudsman's reasoning

The ombudsman found that while the supplier may have breached Regulation 14(3) by marketing Fractional Club membership as an investment, this did not render the credit relationship unfair because: (1) Mr K's purchase was not motivated by the prospect of financial gain from the property share; (2) the commission was low (4% of borrowing) and would not have changed his decision had it been disclosed; (3) the lender was not acting as Mr K's agent and did not owe him a fiduciary duty; (4) Mr K had full information about the cost of the credit agreement and could compare alternatives; (5) regulatory breaches do not automatically create unfairness under Section 140A - the impact must be considered in the round; (6) Mr K knew what he was purchasing and the costs involved.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website