Mitsubishi HC Capital UK Plc · DRN-6248513

The complaint Mr G’s complaint is, in essence, that Mitsubishi HC Capital UK Plc trading as Novuna Personal Finance (the ‘Lender’) acted unfairly and unreasonably by (1) being party to an unfair credit relationship with him under Section 140A of the Consumer Credit Act 1974 (as amended) (the ‘CCA’) and (2) deciding against paying a claim under Section 75 of the CCA. Background to the Complaint Mr G purchased membership of a timeshare (the ‘European Collection’1) from a timeshare provider (the ‘Supplier’) on 31 May 2016 (the ‘Time of Sale’)2. He entered into an agreement with the Supplier to buy 15,000 points at a cost of £11,402 (the ‘Purchase Agreement’). Mr G paid for his European Collection membership by taking finance of £4,402 from the Lender (the ‘Credit Agreement’)3. Mr G paid the balance by credit card. Mr G – using a professional representative (the ‘PR’) – wrote to the Lender on 5 March 2024 (the ‘Letter of Complaint’) to raise a number of different concerns. As those concerns haven’t changed since they were first raised, and as both sides are familiar with them, it isn’t necessary to repeat them in detail here beyond the summary above. The Lender dealt with Mr G’s concerns as a complaint and issued its final response letter on 6 May 2024, rejecting it on every ground. The complaint was then referred to the Financial Ombudsman Service. It was assessed by an Investigator who, having considered the information on file, rejected the complaint on its merits. Mr G disagreed with the Investigator’s assessment and asked for an Ombudsman’s decision – which is why it was passed to me. I issued my provisional decision (the ‘PD’) to the parties on 4 December 2025. In my PD, I said: “I have considered all the available evidence and arguments to decide what is fair and reasonable in the circumstances of this complaint. And having done that, I do not currently think this complaint should be upheld. However, before I explain why, I want to make it clear that my role as an Ombudsman is not to address every single point that has been made to date. Instead, it is to decide what is fair 1 The PR says that Mr G purchased a product called the “Fractional Club”, but I have seen the contract and can see that it is mistaken about this. Mr G, along with his partner, did purchase that product previously, but this complaint is only about the product funded using the loan from the Lender. 2 The PR has given the date of the sale as “2014” in its Letter of Complaint. The Supplier has confirmed that Mr G did not make a purchase in that year. 3 Mr G has signed and dated the Credit Agreement on 5 May 2017. The Lender says that this amount was originally intended to be paid by credit card and the loan was arranged when this did not happen. The PR is silent on this in its Letter of Complaint.

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and reasonable in the circumstances of this complaint. So, if I have not commented on, or referred to, something that either party has said, that does not mean I have not considered it. The complaint about the Lender’s handling of Mr G’s Section 75 claim The CCA introduced a regime of connected lender liability under section 75 that affords consumers (“debtors”) a right of recourse against lenders that provide the finance for the acquisition of goods or services from third-party merchants (“suppliers”) in the event that there is an actionable misrepresentation and/or breach of contract by the supplier. Certain conditions must be met if the protection afforded to consumers is engaged, including, for instance, the cash price of the purchase and the nature of the arrangements between the parties involved in the transaction. The Lender doesn’t dispute that the relevant conditions are met. But for reasons I’ll come on to below, it isn’t necessary to make any formal findings on them here. It was said in the Letter of Complaint that “Fractional Owners Club” membership had been misrepresented by the Supplier at the Time of Sale because Mr G was: (1) told by the Supplier that the membership would secure holiday accommodation for the duration of the contract, as he could book from the many options available. (2) told by the Supplier that the purchase was an “investment” and could be sold at a later date for a profit. The PR says that the Supplier made a statement that was untrue as the membership was not as described. However, I don’t think it would be fair or reasonable to uphold this complaint about the Lender’s handling of Mr G’s claim. I’ll explain why. As I’ve explained, Mr G’s claim under Section 75 CCA is a “like” claims against the Lender which mirror the claims he could make against the Supplier. And so, it wouldn’t be fair to expect the Lender to pay claims that arose after such a limitation defence would be available to the Supplier in court. As such, it’s a relevant for me to consider whether Mr G’s claims were time-barred under the Limitation Act 1980 (‘LA’) before he first raised them with the Lender. A claim for misrepresentation against the Supplier would ordinarily be made under Section 2(1) of the Misrepresentation Act 1967, and the limitation period to make such a claim expires six years from the date on which the cause of action accrued. Mr G’s claim is subject to the limitation periods set out under Sections 2 and 9 of the LA, which are both six years from the date on which the cause of action accrued. The date on which the cause of action accrued was at the Time of Sale. I say this because Mr G entered into the Purchase Agreement at that time based on alleged misrepresentations of the Supplier, which he now says he relied upon when deciding whether or not to make the purchase. And the Credit Agreement was used to finance the purchase, so it was when he entered into this, the following year, that he suffered a loss. Mr G first notified the Lender of the claims against it on 5 March 2024, which was more than six years after the Time of Sale and more than six years after the date he signed the Credit Agreement with the Lender. With that being the case, I don’t think it was unfair or unreasonable of the Lender to decline to pay the claim he made against it for the Supplier’s alleged misrepresentations.

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Section 140A of the CCA: did the Lender participate in an unfair credit relationship? I’ve already explained why I’m not persuaded that European Collection membership was actionably misrepresented by the Supplier at the Time of Sale. But there are other aspects of the sales process that, being the subject of dissatisfaction, I must explore with Section 140A in mind if I’m to consider this complaint in full – which is what I’ve done next. Having considered the entirety of the credit relationship between Mr G and the Lender along with all of the circumstances of the complaint, I don’t think the credit relationship between them was likely to have been rendered unfair for the purposes of Section 140A. When coming to that conclusion, and in carrying out my analysis, I have looked at: 1. The standard of the Supplier’s commercial conduct – which includes its sales and marketing practices at the Time of Sale along with any relevant training material; 2. The provision of information by the Supplier at the Time of Sale, including the contractual documentation and disclaimers made by the Supplier; 3. Evidence provided by both parties on what was likely to have been said and/or done at the Time of Sale; and 4. The inherent probabilities of the sale given its circumstances. I have then considered the impact of these on the fairness of the credit relationship between Mr G and the Lender. The Supplier’s sales & marketing practices at the Time of Sale Mr G’s complaint about the Lender being party to an unfair credit relationship was and is made for several reasons. They include, for various reasons, the allegation that the Supplier misled Mr G and carried on unfair commercial practices under Regulations 5 and 6 of the CPUT Regulations. However, as Regulations 5 and 6 state, commercial practices only amount to misleading actions or omissions if, in addition to satisfying one or more of the specific matters set out in those provisions, they cause or are likely to cause the average consumer to take a transactional decision they would not have taken otherwise. And as I haven’t seen enough evidence to persuade me that, if there were any such actions or omissions at the Time of Sale (which I make no formal finding on), they led Mr G to make the purchasing decision he did, I’m not persuaded that anything done or nor done by the Supplier amounted to an unfair commercial practice for the purposes of those provisions. The PR also alleges that the Supplier acted unfairly under Regulation 7 Schedule 1 of the CPUT Regulations. But given the limited evidence in this complaint, I am not persuaded that the Supplier did. In addition, the PR also says that: 1. Mr G was pressured by the Supplier into purchasing European Collection membership at the Time of Sale.4 2. there was one or more unfair contract terms in the Purchase Agreement. 4 Based on what I have seen, Mr G complained to the Lender in June 2020 that he was pressured into entering the Credit Agreement. That complaint would have now been raised too late to the Financial Ombudsman Service. However, the complaint I’ve been asked to consider is about the allegation that Mr G was pressured into entering into the Purchase Agreement, so I think this part of the complaint falls under the jurisdiction of the Financial Ombudsman Service.

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However, as things currently stand, neither of these strike me as reasons why this complaint should succeed. I acknowledge that Mr G may have felt weary after a sales process that went on for a long time. But he says little about what was said and/or done by the Supplier during the sales presentation that made him feel as if he had no choice but to purchase European Collection membership when he simply did not want to. I am also aware that Mr G made 10 purchases with the Supplier before the Time of Sale, and he made one further purchase that he cancelled within the cooling-off period, so I think he was aware of what the sales process entailed and his right to cancel if he changed his mind or if he had felt pressured into making the purchase. And with all of that being the case, there is insufficient evidence to demonstrate that Mr G made the decision to purchase European Collection membership because his ability to exercise that choice was significantly impaired by pressure from the Supplier. Overall, therefore, I don’t think that Mr G’s credit relationship with the Lender was rendered unfair to him under Section 140A for any of the reasons above. But there is another reason, perhaps the main reason, why the PR now says the credit relationship with the Lender was unfair to him. And that’s the suggestion that European Collection membership was marketed and sold to him as an investment in breach of prohibition against selling timeshares in that way. The Supplier’s alleged breach of Regulation 14(3) of the Timeshare Regulations The Lender does not dispute, and I am satisfied, that Mr G’s European Collection membership met the definition of a “timeshare contract” and was a “regulated contract” for the purposes of the Timeshare Regulations. Regulation 14(3) of the Timeshare Regulations prohibited the Supplier from marketing or selling European Collection membership as an investment. This is what the provision said at the Time of Sale: “A trader must not market or sell a proposed timeshare contract or long-term holiday product contract as an investment if the proposed contract would be a regulated contract.” But the PR says that the Supplier did exactly that at the Time of Sale – saying the following: “However, it is clear that that the Supplier told Our Clients about their entitlement to sell their membership, that the membership was an investment, and that they would get back the money they invested, plus a specific profit.” I have thought about what the PR has said and I don’t think it’s plausible that the Supplier sold the points-based European Collection membership to Mr G as an investment. After all, the PR’s own Letter of Complaint does not identify the correct product and it does not provide any detail about why it is “clear” that the Supplier sold the points to Mr G as a way to make money. Further, Mr G’s handwritten testimony only covers the three fractional purchases he made prior to the Time of Sale, so I have not seen any testimony from him at all about the sale of the European Collection points. Lastly, Mr G had been a member of the Supplier’s since 1997 and enjoyed over 100 holidays using the various memberships he has owned, which includes 67 nights of accommodation between the Time of Sale and 2018, when he surrendered the membership using the Supplier’s exceptional circumstances policy. So, I am persuaded that he purchased the membership because he knew it would allow him to take more holidays.

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On balance, therefore, I don’t think the evidence suggests there had been a breach of Regulation 14(3) by the Supplier when it sold the European Collection points membership to Mr G. And for that reason, I do not think the credit relationship between Mr G and the Lender was unfair to him. The provision of information by the Supplier at the Time of Sale The PR says that Mr G was not given sufficient information at the Time of Sale by the Supplier about the ongoing costs of European Collection membership. The PR also says that the contractual terms governing the ongoing costs of membership and the consequences of not meeting those costs were unfair contract terms. As I’ve already indicated, the case law on Section 140A makes it clear that it does not automatically follow that regulatory breaches create unfairness for the purposes of the unfair relationship provisions. The extent to which such mistakes render a credit relationship unfair must also be determined according to their impact on the complainant. I acknowledge that it is also possible that the Supplier did not give Mr G sufficient information, in good time, on the various charges he could have been subject to as a European Collection member in order to satisfy the requirements of Regulation 12 of the Timeshare Regulations (which was concerned with the provision of ‘key information’). But even if that was the case, I cannot see that the ongoing costs of membership were applied unfairly in practice. And as neither Mr G nor the PR have persuaded me that he would not have pressed ahead with his purchase had the finer details of the European Collection’s ongoing costs been disclosed by the Supplier in compliance with Regulation 12, I cannot see why any failings in that regard are likely to be material to the outcome of this complaint given its fact and circumstances. As for the PR’s argument that there were one or more unfair contract terms in the Purchase Agreement, I can’t see that any such terms were operated unfairly against Mr G in practice, nor that any such terms led him to behave in a certain way to his detriment. And with that being the case, I’m not persuaded that any of the terms governing European Collection membership are likely to have led to an unfairness that warrants a remedy.” In summary, I wasn’t minded to think that the Lender acted unfairly or unreasonably when it dealt with Mr G’s section 75 claim. At the time of my PD I deferred my conclusions on the matter of commission disclosure in order to review that issue further. I’ve since written to the parties setting out my thoughts on why I wasn’t persuaded to uphold this aspect of the complaint. Applying the principles and factors set out in the Supreme Court judgment5 handed down on 1 August 2025, I found nothing to suggest to suggest that the Lender and Supplier were tied to one another contractually or commercially in a way that wasn’t properly disclosed to Mr G. Nor did I see anything that persuaded me that the commission arrangements between them gave the Supplier a choice over the interest rate which led Mr G into a credit agreement that cost disproportionately more than it otherwise could have. Further, the flat rate and amount of commission paid was such that it gave me no reason to think that any failure to disclose it to Mr G had a material impact on his decision to enter into the Credit Agreement. At £176.08, it was only 4% of the amount borrowed and even less than that (5.44%) as a proportion of the charge for credit. That didn’t strike me as 5 Johnson v FirstRand Bank Ltd, Wrench v FirstRand Bank Ltd and Hopcraft v Close Brothers Ltd [2025] UKSC 33 (“Hopcraft, Johnson and Wrench”)

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disproportionate; nor were the surrounding circumstances otherwise capable of rendering unfair the credit relationship between the Lender and Mr G such that the Lender needed to take any action in redress. I didn’t find any of the other arguments put forward demonstrated that the credit agreement between Mr G and the Lender was unfair to him under section 140A of the CCA. Absent any other reason why it would be fair or reasonable to direct the Lender to compensate Mr G, I said I didn’t propose to uphold the complaint. Responses to my provisional findings The Lender did not respond to my PD. The PR didn’t accept the proposed outcome. It made further submissions in support of Mr G’s position. Having received and reviewed these, I’m now proceeding with my final decision. In doing so, I’m conscious that the PR has requested the disclosure of evidence and has asked that we do not proceed with a decision before this is done and it has had an opportunity to make further submissions. The PR’s requests have been addressed by us under separate correspondence. For reasons I will explain in the course of this decision, I’ve concluded that it’s appropriate for me to proceed with my determination. The legal and regulatory context The legal and regulatory context that I think is relevant to this complaint has been shared in several hundred published decisions on very similar complaints, as well as in previous correspondence with the parties. So there’s no need for me to set this out again in detail here. I simply remind the parties that our rules6 say that in considering what is fair and reasonable in all the circumstances of the complaint, I will take into account: relevant (i) law and regulations; (ii) regulators’ rules, guidance and standards; and (iii) codes of practice; and (where appropriate), what I consider to have been good industry practice at the relevant time. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. After considering the case afresh and having regard for what’s been said in response to my PD, and in my subsequent correspondence, I find it offers no persuasive reason to depart from the conclusions I’ve previously set out. I’ll explain why. The PR has questioned whether my provisional conclusions run contrary to precedent decisions issued by my ombudsman colleagues. It has provided me with four decision references and provided some brief commentary on why my PD is not consistent with those decisions. But the PR’s understanding of the decisions it has picked appears to be seriously flawed at best. I’ll explain why. The PR picked two decisions that it says provided a “full review of affordability” but that my PD does not “review of affordability or credit checks”. But neither of the decisions it referenced do that – in fact they do not cover affordability at all. Another decision the PR says covers “how late claims might be excused under Section 32 [of the LA], considering 6 Financial Conduct Authority (“FCA”) Handbook – DISP 3.6.4R (“R” denotes a rule).

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concealment and inducement”. But that decision does not cover this at all and in that case, the complaint was raised within six years of the purchase dates in question, so there was no limitation defence raised. Finally, the PR pointed to a decision that it says covered commission and the impact on the consumer’s behaviour. It says my PD “dismisses commission concerns (4%) without examining if disclosure was sufficient or if broker acted in Mr G’s interests”. This is not right – at the time I had not provided my findings on commission and, once again, the decision it refers to does not mention commission once. I am at a loss to understand what brought the PR to make the arguments it has done, but in any case I am not persuaded that the outcome I reached in the PD ought to be changed. For the avoidance of doubt, other decisions issued by other ombudsmen do not have a precedent effect like some court judgments might, and each ombudsman must determine each case on its own specific facts. Regarding the PR’s argument that Section 32 of the LA postpones the time limits in which Mr G could raise his complaint, I do not see any reason why it is unfair or unreasonable to conclude that Section 2 and Section 9 of the LA are relevant as I have done here. After all, the PR is not seeking damage for negligence, and it has not persuaded me that it would be fair or reasonable to apply the time limits set out under Section 32 of the LA or explained why that section applies here. The PR says I did not consider the creditworthiness checks carried out by the Lender. I remind the PR that it did not raise this matter in its Letter of Complaint. The PR says I have not properly considered the allegation that the Supplier sold the membership as an investment. In my PD, I said: “I have thought about what the PR has said and I don’t think it’s plausible that the Supplier sold the points-based European Collection membership to Mr G as an investment. After all, the PR’s own Letter of Complaint does not identify the correct product and it does not provide any detail about why it is “clear” that the Supplier sold the points to Mr G as a way to make money.” I also pointed out that the PR had not provided me with any testimony from Mr G that covered the sale in question. The PR has not provided me with any new arguments or evidence to support its position that the Supplier sold the membership to Mr G as an investment. So, I see no reason to depart from the findings as I set out in the PD. Section 140A: Conclusion Given all of the factors I’ve looked at in this part of my decision, and having taken all of them into account, I remain unpersuaded that the credit relationship between Mr G and the Lender under the Credit Agreement and related Purchase Agreement was unfair to him such that it warrants the Lender offering any redress. Commission: The Alternative Grounds of Complaint In my previous correspondence I mentioned that some of the grounds for complaint about the fairness or otherwise of the credit relationship could also constitute separate and freestanding complaints. I’ll reiterate my findings here. The first ground relates to whether the Lender is liable for the dishonest assistance of a breach of fiduciary duty by the Supplier because it took a payment of commission from the

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Lender without telling Mr G (that is, secretly). The second relates to the Lender’s compliance with the regulatory guidance in place at the Time of Sale insofar as it was relevant to disclosing the commission arrangements between them. For the reasons I set out previously, I’m not persuaded that the Supplier – when acting as credit broker – owed Mr G a fiduciary duty. So, the remedies that might be available at law in relation to the payment of secret commission aren’t, in my view, available to him. And while it’s possible that the Lender failed to follow the regulatory guidance in place at the Time of Sale insofar as it was relevant to disclosing the commission arrangements between it and the Supplier, I don’t think any such failure on the Lender’s part is itself a reason to uphold this complaint. For the reasons I have also previously set out, I think he would still have taken out the loan to fund his purchase at the Time of Sale had there been more adequate disclosure of the commission arrangements that applied at that time. Conclusion After careful reconsideration of the facts and circumstances of this complaint, I adopt my provisional conclusions as part of my final decision. For the reasons I’ve given above and in my earlier correspondence I’ve mentioned, I don’t think the Lender acted unfairly or unreasonably when it dealt with Mr G’s section 75 claim. And I’m not persuaded that the Lender was party to a credit relationship with Mr G that was unfair to him for the purposes of section 140A of the CCA. Having taken everything into account, I see no other reason why it would be fair or reasonable for me to direct the Lender to compensate Mr G. My final decision For the reasons set out above, my final decision is that I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr G to accept or reject my decision before 21 April 2026. Andrew Anderson Ombudsman

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