DRN-6257254

The complaint Mr K complains about how Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance handled a claim he made under Section 75 of the Consumer Credit Act 1974 (“Section 75”). What happened In November 2023, Mr K took out a fixed sum loan agreement with Novuna to pay for some flooring supplied by a retailer, who I’ll call “X”. The cash price of the flooring was around £2,850 and after paying a deposit of £100, Mr K was scheduled to make monthly payments of about £115 over a two year period. X say they delivered the flooring to Mr K in April 2024. This prompted Novuna to ask Mr K if he was satisfied the goods had been delivered. They say Mr K’s answer enabled them to transfer the loan funds to X, to pay for the goods. However, Mr K says he told Novuna that he wasn’t satisfied, because X had not delivered the complete order. He also says X took some incorrect and damaged stock away, but never replaced it. Despite what Mr K says, Novuna paid the loan funds to X, which meant the monthly repayments became due. Once Mr K saw the repayments leave his current account, he says he raised a Section 75 claim with Novuna and also pursued things with X. To resolve the situation, Mr K wanted the goods he had paid for, so he could arrange for the fitters to install the flooring. Novuna didn’t uphold Mr K’s Section 75 claim and said they needed more information about the goods. Mr K didn’t agree with Novuna’s handling of his claim and said he had provided them with all the details he had. He also said that he hadn’t managed to sort things directly with X. So, Mr K complained to Novuna. In their final response to Mr K’s complaint, Novuna reiterated that they hadn’t received any description of the goods from Mr K, so couldn’t support his claim of a breach of contract by X. They also said that X had gone into liquidation, meaning they were unable to get further information from the supplier. However, Novuna paid Mr K £100 for the delay in handling his claim. Mr K didn’t accept Novuna’s response and brought his complaint to this service. One of our investigators looked into Mr K’s complaint and found that Novuna hadn’t treated Mr K fairly. He was persuaded that X hadn’t supplied the goods financed by the loan. So, the investigator said Novuna should end the agreement and give Mr K his money back. The investigator also said Novuna should remove any details about the loan from Mr K’s credit file, and pay Mr K a total of £250 for the distress and inconvenience he had experienced. Mr K accepted the investigator’s findings, but Novuna didn’t. They said Mr K hadn’t been consistent during his complaint and that the onus was on him to show he hadn’t received the flooring. Novuna also doubted that Mr K didn’t have any paperwork related to the contract held with X. The investigator didn’t change his conclusions and Mr K’s complaint has now been passed

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to me to make a final decision. 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. Section 75 and The Consumer Rights Act 2015 (“CRA”) Section 75 is a statutory protection that enables Mr K to make a like claim against Novuna, for a breach of contract or any misrepresentations by X. But, Mr K only has the ability to make a like claim under certain conditions. Mr K is likely to have had a separate agreement with X for the provision of goods or services. We’ve not seen a copy of that contract, as neither Mr K nor Novuna have provided it. But, Novuna have treated Mr K as if the contract with X was in his name. I say this in light of all the communication I’ve seen between Novuna, X and Mr K. Having considered all the evidence, I think the necessary relationships exist between the parties and the claim is within the relevant financial limits. So, I think Mr K was able to raise a Section 75 claim against Novuna. The CRA is also relevant to this complaint. The CRA implies terms into the contract that traders must perform the service with reasonable care and skill. And that services should be performed within a reasonable amount of time. Additionally, the CRA implies terms into the contract that goods supplied will be of satisfactory quality. It also sets out what remedies are available to consumers, if statutory rights under a goods or services contract are not met. In the instance of a breach of contract by a supplier, the CRA says a consumer has a right to a repair or a replacement of the goods supplied. If that isn’t possible, then a consumer has a right to a refund. The delivery of the goods and the satisfaction note Both sides of this dispute have agreed that the contract with X was for the supply of the flooring only. Having looked at the fixed sum loan agreement, I can see that the description of the goods or services is simply “flooring”. So, I agree that Mr K entered into a contract with X for them to supply and deliver floor covering. However, neither of the parties have been able to supply an exact description of the make, type, colour or quantity of the flooring intended for Mr K’s home. Novuna have pointed to Mr K as the party responsible for keeping such records. While I accept it’s helpful for a customer to retain records, I think there’s greater onus on Novuna to know what goods they are providing finance for. This is particularly useful for Novuna when attempting to defend a claim like the one brought to them by Mr K. The crux of Mr K’s claim is that X delivered only part of what he had ordered, and that the flooring he was given was incorrect and damaged. Normally, when there is a dispute about what happened, a lender will contact the supplier and collect delivery records, showing what was sent to a customer and a singed delivery receipt. Additionally, images of the delivery and any communication between the parties following the supply of goods proves helpful. But, Novuna say they don’t have any delivery records to provide, as X is no longer trading. I’ve considered the circumstances around X ceasing trading in July 2024, and where this was after Novuna say Mr K first raised his concerns in May 2024. Having done so, I think

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there was an opportunity for Novuna to have at least contacted X, to request their records of the delivery. Regardless of Novuna’s handling of Mr K’s claim in 2024, we don’t have those records. So, I’ve thought about the evidence we do have, to decide Mr K’s case. Mr K has told us that he flagged the problems with the goods he received, both with X and Novuna. He says he had arranged to pay the fitter provided by X in cash. This is supported in the email correspondence between X and Novuna. Mr K says X’s fitter took away the incorrect and damaged items, but didn’t come back with the correct flooring. Within his complaint records, Mr K has provided a copy of an email from Novuna dated 5 April 2024. I can see from this email where Novuna asked Mr K if he was satisfied he had received the goods from X. Mr K says he clicked the “unhappy with your purchase” option. When asked, Novuna didn’t provide us with any records to show where Mr K may have clicked the “satisfied” option instead. On balance, I’m persuaded that Mr K responded to Novuna’s email, by saying he had concerns about the goods received from X. Furthermore, I can see from Novuna’s records of correspondence with Mr K, where he raised the same concerns with them during a telephone call in May 2024. So, I think from the outset, Novuna was made aware of a problem with the supply of the flooring from X. Aside from Mr K alerting Novuna of his concerns, I’ve also thought about the terms of the fixed sum loan, regarding its activation. Section six of the agreement says: “You authorise us to pay the Amount of Credit to the Supplier as soon as the goods/services have been supplied or to inform the Supplier if we refuse to enter the agreement.” I’ve found that on balance, Mr K signalled his dissatisfaction with the delivery to Novuna on 5 April 2024. I can see from Novuna’s records that they activated the loan on the strength of X’s testimony on, or around 29 April 2024. Indeed, I can see where X hints at Mr K’s dissatisfaction in their emails to Novuna, before asking Novuna for payment anyway. I think this means Novuna had about three weeks to investigate Mr K’s concerns, before paying the loan funds to X. It also means that Novuna activated the loan, knowing there were some problems with the supply of goods and without checking with Mr K. I do of course take Novuna’s point that the CRA doesn’t require them to collect a satisfaction note from Mr K. But, it seems their own processes asked Mr K for that satisfaction, but they overlooked the answer. And that may have made a difference in Mr K’s Section 75 claim. Overall, I think Novuna had the opportunity before X went into liquidation to ask them for their delivery records. I also think Mr K made Novuna aware of his dissatisfaction with the supply of goods, before the loan started. I also think this adds weight to Mr K’s claim that X breached the contract he had with them. Additionally, I don’t think Novuna treated Mr K fairly, when he first raised his concerns. In light of my findings, I’ve gone on to think about the potential breach of contract by X, based on the other evidence we have about the supply of the flooring. Novuna’s finding that Mr K has some of the goods supplied by X I can see from Mr K records and Novuna’s correspondence notes, where Mr K frequently contacted all parties involved, from April 2024, until his complaint was brought to our service in May 2025. I’m aware that Novuna has said Mr K left long periods between providing

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evidence for his claim. But, I can see where he was trying to gather documents and testimony from both X and Novuna. Novuna have said that Mr K has at some points told them that he has some of the flooring supplied by X. And at other times has said he doesn’t have any of the goods whatsoever. Although I can see why Novuna may reach this conclusion. I think there may have been a misunderstanding. I say this as Mr K has said from the start of his complaint, that any flooring he was given by X, was taken away by their fitter shortly afterwards. So, throughout this time, I can see that Mr K’s evidence was clear, consistent and credible. Moreover, Novuna say the pictures provide by Mr K, show flooring stacked in the background, as well as completed rooms with the flooring he ordered. I’ve looked at the pictures Mr K provided to Novuna, as well as others he sent to us as part of his complaint. I’m satisfied that the pictures were taken at different times, given the steps Mr K has taken to prove that. I’m also satisfied that those images show the relevant parts of Mr K’s home rooms without any flooring, and the pre-existing flooring Mr K planned to replace or add to, with the goods from X. Mr K has also told us that the sections of flooring shown in a small pile in one of the photos, are from samples provided by X. In other words, he says they were not part of the order or the delivery from X. Having looked at the image Novuna refers to, I don’t think it shows where Mr K has received the flooring purchased using the loan. I agree with Mr K, in that it seems he’d been given a very small sample of flooring, to test in his home. Novuna have told us that X’s order book was taken over by a different retailer. They say that retailer told Mr K that the flooring he had ordered from X was discontinued. This meant Mr K was unable to get a replacement. Novuna also say Mr K must have had an invoice of some sort, to show to the other retailer and demonstrates where he has changed his testimony to suit the circumstances. While I accept Mr K is likely to have had a conversation with the other retailer, it’s not clear what detail was provided. Mr K says he went to that retailer and they were able to look up his order. I’m aware this could be done by using Mr K’s name or contact details. Either way, I don’t think what Novuna says mean that Mr K has proven to provide unreliable information. Having considered all the evidence, I don’t think it supports Novuna’s claim that Mr K has retained some of the flooring supplied by X. It then follows that I’m persuaded X breached the contract they had with Mr K, in that I don’t think the flooring was supplied to Mr K. Under the CRA, this means Mr K is due a remedy. The settlement to the Section 75 claim The remedies available to Mr K start with repair or replacement of the goods. We know that the items financed by the fixed sum loan agreement are no longer available. And it has been quite sone time since Mr K first told Novuna about the problems with the supply of the flooring. So, I don’t think repair or replacement of the flooring is appropriate here. Instead, I think Mr K is entitled to a refund for the cash price of the goods from Novuna. In all the circumstances, I think it’s fair that Novuna allows Mr K to exit the fixed sum loan agreement at no further cost to him. I also think it’s fair for Novuna to refund all the repayments Mr K has made towards the agreement since it started in April 2024. This includes the deposit of £100 paid by Mr K at the start.

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Mr K hasn’t had the use of the funds he has paid to Novuna throughout the life of the loan. So, I think it’s fair for Novuna to also add interest at 8% a year simple, to each repayment, from the date each payment was made, to the date of settlement of this complaint. I’ve not seen where Novuna may have recorded adverse information on Mr K’s credit file. But, I’m aware Mr K is worried about that and has tried to prevent it from happening by keeping up with repayments. So, I think it’s fair for Novuna to remove any information they may have passed on to credit reference agencies about the fixed sum loan agreement. Distress and inconvenience Mr K has lived in his home without flooring in some of the rooms since early 2024. And Novuna has been aware of Mr K’s living conditions since he told them what had happened, when he replied to their satisfaction email. I can also see where Mr K has attempted to contact Novuna and chase them for a response. All this means Novuna had caused a delay in handling Mr K’s claim, until he brought his concerns to our service in May 2025. Overall, I don’t think Novuna handled Mr K’s Section 75 claim fairly and that they have caused delays, as well as trouble and upset. I can see where Novuna have already made a payment of £100 to Mr K in May 2025. But, I think the amount of worry Mr K has told us about caused considerable disruption to him for several months. It then follows that I think Novuna should increase the award for disruption they have caused. So, I think it’s fair for Novuna to pay Mr K an additional £150, to reflect the distress and inconvenience he’s experienced. Putting things right For these reasons Mitsubishi HC Capital UK PLC, trading as Novuna Personal Finance should: 1. End the fixed sum loan agreement and allow Mr K to exit the contract with nothing further to pay; 2. Refund all the repayments to Mr K, including the £100 deposit, that he has made under the fixed sum loan agreement, from the start of the agreement to the date of settlement of this complaint; 3. Add interest at a rate of 8% a year simple to part two of this settlement, from the dates the repayments were paid, to the date of settlement of this complaint; 4. Remove any information about the fixed sum loan agreement, from the details held with credit reference agencies; and 5. Pay Mr K an additional £150 for the distress and inconvenience caused. My final decision My final decision is that I uphold this complaint and require Mitsubishi HC Capital UK PLC, trading as Novuna Personal Finance to put things right as set out above.

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Under the rules of the Financial Ombudsman Service, I’m required to ask Mr K to accept or reject my decision before 26 May 2026. Sam Wedderburn Ombudsman

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