Upheld: Irresponsible lending complaint against Mitsubishi HC Capital UK Plc (trading as Hitachi Personal Finance)
Financial Ombudsman decision DRN-6460300 of 2026-06-29T00:00:00+00:00. Irresponsible lending complaint against Mitsubishi HC Capital UK Plc (trading as Hitachi Personal Finance). Outcome: Upheld.
Decision detail
| Reference | DRN-6460300 |
|---|---|
| Decision date | 2026-06-29T00:00:00+00:00 |
| Firm | Mitsubishi HC Capital UK Plc (trading as Hitachi Personal Finance) |
| Product | Other regulated product |
| Claim type | Irresponsible lending |
| Outcome | Upheld |
| Remedy | The Lender must: (1) refund all of Ms M's repayments under the Credit Agreement, including sums paid to settle the debt, and cancel any outstanding balance; (2) refund annual management charges paid as a result of Fractional Club membership; (3) deduct the value of any promotional giveaways used and the market value of holidays taken using Fractional Points (or alternatively, deduct relevant annual management charges for years in which holidays were taken); (4) add simple interest at 8% per annum to each Net Repayment from the date made until settlement; (5) remove any adverse information recorded on Ms M's credit file in connection with the Credit Agreement within six years of the decision; (6) if membership is still in place, indemnify Ms M against all ongoing liabilities provided she assigns her Fractional Points to the Lender or holds them on trust for the Lender. |
Summary
Ms M purchased Fractional Club membership (a timeshare product with an investment element) for £11,990 on 20 September 2016, financed through a credit agreement with Hitachi Personal Finance. She later complained that the Supplier had marketed and sold the membership as an investment in breach of Regulation 14(3) of the Timeshare Regulations, and that the Lender had participated in an unfair credit relationship. The Ombudsman upheld the complaint, finding that the Supplier's training materials demonstrated sales representatives were instructed to emphasise 'building equity' and future financial returns, which amounted to marketing the product as an investment. Ms M's testimony that the prospect of financial gain was a material motivating factor was found credible and consistent with the training materials. The Ombudsman ordered comprehensive redress including refund of all repayments, management charges, interest at 8% per annum, credit file remediation, and indemnification against ongoing liabilities.
The Ombudsman's reasoning
The Ombudsman found that although Fractional Club membership included an investment element (the share in the Allocated Property), the Timeshare Regulations prohibited marketing or selling such products as investments. The Supplier's training materials demonstrated that sales representatives were instructed to emphasise 'building equity' and future financial returns, which amounted to marketing the product as an investment. The Ombudsman rejected the Lender's challenges to Ms M's credibility, finding her testimony plausible and consistent with the training materials. The prospect of financial gain was material to Ms M's purchasing decision, and without this inducement, she would not have entered into the credit agreement. Therefore, the credit relationship was unfair under Section 140A of the Consumer Credit Act 1974.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Mitsubishi HC Capital UK Plc (trading as Hitachi Personal Finance), all decisions | 6 | 17% |
| Irresponsible lending, all decisions | 30,675 | 37% |
| Other regulated product, all decisions | 47,449 | 30% |
Source
Read the original decision on the Financial Ombudsman Service website