Upheld: Investment mis-selling complaint against Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance
Investment mis-selling complaint against Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance, decided 30 June 2026 by the Financial Ombudsman Service. Outcome: Upheld.
Decision detail
| Reference | DRN-6463536 |
|---|---|
| Decision date | 30 June 2026 |
| Firm | Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance |
| Product | Other regulated product |
| Claim type | Investment mis-selling |
| Outcome | Upheld |
| Remedy | The lender must: (1) Refund all of Mr K's repayments under the Credit Agreement including any sums paid to settle the debt and cancel any outstanding balance; (2) Refund annual management charges paid and the trade-in value of the trial membership; (3) Deduct the value of any promotional giveaways used and the market value of holidays taken (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 Mr K's credit file in connection with the Credit Agreement within six years of the decision; (6) If the membership is still in place, indemnify Mr K against all ongoing liabilities provided he assigns his Fractional Points to the lender or holds them on trust for the lender. |
Summary
Mr K purchased Fractional Club timeshare membership for £15,618 in November 2017, financed by a £16,546 credit agreement with Novuna Personal Finance. The membership included a share in the net sale proceeds of a property after 19 years. In January 2023, Mr K complained that he had been mis-sold the membership as an investment. The ombudsman found that the supplier breached Regulation 14(3) of the Timeshare Regulations by marketing the membership as an investment through training materials and sales practices that emphasized financial returns and property ownership benefits. The ombudsman concluded this breach was material to Mr K's purchasing decision and rendered the credit relationship unfair under Section 140A of the Consumer Credit Act 1974. The lender was directed to refund all repayments, annual management charges, and the trade-in value of Mr K's previous trial membership, with 8% simple interest, and to remove adverse credit file information.
The Ombudsman's reasoning
The ombudsman found that although the contemporaneous paperwork contained disclaimers stating the membership was not sold as an investment, the supplier's training materials and sales practices demonstrated that sales representatives were encouraged to present Fractional Club membership as offering financial returns and property ownership benefits. The training manual explicitly described the return of sale proceeds after 19 years and encouraged representatives to emphasize the financial advantages compared to renting holidays. The ombudsman concluded that the supplier implied future financial returns (possible profits) were a good reason to purchase the membership, which breached Regulation 14(3). This breach was material to Mr K's decision to purchase, as evidenced by his testimony that the investment side was 'pushed on us a lot more' and his consistent account throughout the complaint process. The ombudsman rejected the lender's arguments that Mr K's complaint was influenced by a claims management company or that his motivation was primarily holiday-based, finding Mr K's testimony credible and consistent with the supplier's documented sales practices.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance, all decisions | 130 | 13% |
| Investment mis-selling, all decisions | 14,175 | 37% |
| Other regulated product, all decisions | 51,462 | 30% |
Source
Read the original decision on the Financial Ombudsman Service website