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

Decision detail

Summary

Mr J purchased Fractional Club timeshare membership for £14,130 in June 2019, financed by a loan from Novuna Personal Finance. Nearly four years later, he complained that the supplier misrepresented the product as an investment in breach of Timeshare Regulations, that the lender failed to properly handle Section 75 claims, and that the credit relationship was unfair under Section 140A of the CCA. The ombudsman found no actionable misrepresentation (the property share was genuinely an investment asset), no breach of contract (holidays were available subject to disclosed demand limitations), and no unfair credit relationship. Although acknowledging a possible breach of the prohibition on marketing timeshares as investments, the ombudsman found this was not material to Mr J's decision, which was motivated by holiday cost savings and property ownership rather than investment returns. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A analysis, considering whether any regulatory breaches or commercial failings rendered the credit relationship unfair. Key findings: (1) No actionable misrepresentation - telling prospective members they were buying a share in a property and would receive proceeds from its sale was factually true; (2) No breach of contract - holiday availability was subject to demand as disclosed, and Mr J successfully took holidays; (3) Possible breach of Regulation 14(3) (marketing as investment) but not causative - Mr J's own testimony showed his purchase was motivated by holiday savings and property ownership, not investment returns; (4) Commission arrangement was low (3.71% of charge for credit) and Mr J had pricing information to compare options; (5) No fiduciary duty owed by supplier as credit broker, so no secret commission liability; (6) Regulatory breaches do not automatically create unfairness under Section 140A - they must be considered in the round with their actual impact on the consumer; (7) Mr J would have proceeded with purchase regardless of any regulatory breach given his actual motivations.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website