Not upheld: Goods and services under S75 complaint against Mitsubishi HC Capital UK Plc

Decision detail

Summary

Mrs O purchased a Fractional Club timeshare membership in December 2018 for £12,175, financed by a £16,346 loan from the lender. The asset-backed membership included a share in net sale proceeds of an allocated property. Over four years later, Mrs O complained that the supplier had misrepresented the product as an investment and that the lender had unfairly participated in an unfair credit relationship. The ombudsman found no actionable misrepresentation, no breach of contract, and no unfair credit relationship. Although the supplier may have breached regulations prohibiting marketing timeshares as investments, this did not affect the fairness of the credit relationship because Mrs O's purchase was not motivated by investment returns. The ombudsman rejected all grounds of complaint and did not uphold the case.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to assess fairness under Section 140A of the CCA, considering the supplier's commercial conduct, information provision, evidence of what was said at sale, inherent probabilities, and any related credit agreement unfairness. The key finding was that Mrs O's purchase decision was not motivated by the prospect of financial gain from the allocated property, despite possible regulatory breaches by the supplier. The ombudsman found that even if the supplier breached Regulation 14(3) by marketing the product as an investment, this would not have changed Mrs O's purchasing decision because she was primarily interested in holiday accommodation and membership benefits, not investment returns. The commission of 4% was not so high as to render the relationship unfair, particularly given Mrs O's limited means to fund the purchase independently. The ombudsman rejected arguments about undisclosed encumbrances, noting that one did not exist at the time of sale and the other was satisfied before purchase.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website