DRN-6318460

The complaint Mr P’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 claims under Section 75 of the CCA. Background to the complaint Mr P and his wife Mrs P were members of a timeshare provider (the ‘Supplier’) – having purchased a number of products from it over time. But the product at the centre of this complaint is their membership of a timeshare that I’ll call the ‘Fractional Club’ – which they bought on 10 April 2013 (the ‘Time of Sale’). They entered into an agreement with the Supplier to buy 1,575 fractional points at a cost of £7,800 (the ‘Purchase Agreement’). Fractional Club membership was asset backed – which meant it gave Mr and Mrs P more than just holiday rights. It also included a share in the net sale proceeds of a property named on the Purchase Agreement (the ‘Allocated Property’) after their membership term ends. Mr and Mrs P paid for their Fractional Club membership by taking finance of £7,800 from the Lender (the ‘Credit Agreement’) in Mr P’s name. As the only borrower named on the Credit Agreement, this complaint has been brought in his name only. Mr P – using a professional representative (the ‘PR’) – wrote to the Lender on 22 August 2018 (the ‘Letter of Complaint’) to raise a number of different concerns. As those concerns have not changed since they were first raised, and as both sides are familiar with them, it’s not necessary to repeat them in detail here beyond the summary above. The Lender dealt with Mr P’s concerns as a complaint and issued its final response letter on 20 September 2018, 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 P disagreed with the Investigator’s assessment and asked for an Ombudsman’s decision. So the complaint was passed to me to decide.

-- 1 of 12 --

My provisional decision I recently issued a provisional decision (the ‘PD’) not upholding this complaint. I explained that given the facts and circumstances of this complaint, I did not think the Lender acted unfairly or unreasonably by not upholding Mr P’s Section 75 claims. I was not persuaded the Lender was party to a credit relationship with him under the Credit Agreement and related Purchase Agreement that was unfair to him for the purposes of Section 140A of the CCA. And having taken everything into account, I could see no other reason why it would be fair or reasonable to direct the Lender to compensate him. I gave both parties the opportunity to respond to the PD. The PR did not respond to the PD, and the Lender confirmed it had nothing further to add. As I have not received any further submissions from either party, and have not been persuaded to depart from my provisional findings, I have repeated my provisional findings below, as my final decision, and have not therefore included any further detail of them in this background summary. 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. Having done that, I do not 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‘s to decide what’s fair 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 legal and regulatory context In considering what’s fair and reasonable in all the circumstances of the complaint, I’m required under DISP 3.6.4R to 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. The legal and regulatory context that I think is relevant to this complaint is, in many ways, no different to that shared in several hundred published ombudsman decisions on very similar complaints – which can be found on the Financial Ombudsman Service’s website. And with that being the case, it’s not necessary to set out that context in detail here. But I would add that the following regulatory rules/guidance are also relevant: The Office of Fair Trading’s Irresponsible Lending Guidance – 31 March 2010 The primary purpose of this guidance was to provide greater clarity for businesses and consumer representatives as to the business practices that the Office of Fair Trading (the ‘OFT’) thought might have constituted irresponsible lending for the purposes of Section 25(2B) of the CCA. Below are the most relevant paragraphs as they were at the relevant time: • Paragraph 2.2

-- 2 of 12 --

• Paragraph 2.3 • Paragraph 5.5 The OFT’s Guidance for Credit Brokers and Intermediaries - 24 November 2011 The primary purpose of this guidance was to provide clarity for credit brokers and credit intermediaries as to the standards expected of them by the OFT when they dealt with actual or prospective borrowers. Below are the most relevant paragraphs as they were at the relevant time: • Paragraph 2.2 • Paragraph 3.7 • Paragraph 4.8 Section 75 of the CCA: the Supplier’s misrepresentations at the Time of Sale 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’s 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 does not dispute that the relevant conditions are met. But for reasons I’ll come on to below, it’s not necessary to make any formal findings on them here. It was said in the Letter of Complaint that Fractional Club membership had been misrepresented by the Supplier at the Time of Sale because Mr P was told or led to believe by the Supplier that Fractional Club membership: (1) Was an investment that could be sold at a profit when that was not true. (2) Had a guaranteed end date when that was not true. (3) Was the only way of releasing himself from his existing membership when that was not true. (4) Was exclusive to him (and other members) when that was not true. However, telling prospective members that Fractional Club membership was an investment that could be sold at a profit was not untrue. After all, a share in an allocated property was, by its very nature, an investment and it was and is possible that it will be sold at a profit.

-- 3 of 12 --

As I understand it, the sale of the Allocated Property could be postponed in certain circumstances according to the Fractional Club Rules. But Mr P says little to nothing to persuade me that he was given a guarantee by the Supplier that the Allocated Property would be sold on a specific date, when such a promise would have been impossible to stand by given the inevitable uncertainty of selling property some way into the future. And as there’s not enough evidence on file to support the PR’s allegation that Fractional Club membership had been misrepresented for reasons relating to points (3) and (4), I’m not persuaded there were representations by the Supplier on the issues in question that constituted false statements of existing fact. So, while I recognise that Mr P and the PR have concerns about the way in which Fractional Club membership was sold by the Supplier, when looking at the claim under Section 75 of the CCA, I can only consider whether there was a factual and material misrepresentation by the Supplier. For the reasons I’ve set out above, I’m not persuaded that there was. And that means I don’t think the Lender acted unreasonably or unfairly when it dealt with this particular Section 75 claim. Section 75 of the CCA: the Supplier’s breach of contract I have already summarised how Section 75 of the CCA works and why it gives consumers a right of recourse against a lender. So, it’s not necessary to repeat that here other than to say that, if I find that the Supplier is liable for having breached the Purchase Agreement, the Lender is also liable. The PR says, on Mr P’s behalf, that holiday accommodation would be secured thanks to Fractional Club membership when that was not true. And on my reading of the complaint, that suggests he could not holiday where and when he wanted to, potentially breaching the Purchase Agreement. However, like any holiday accommodation, availability was not unlimited – given the higher demand at peak times, like school holidays, for instance. Some of the sales paperwork Mr P signed at the Time of Sale states that the availability of holidays was/is subject to demand. It also looks like he made use of his fractional points to holiday on a number of occasions. I accept he may not have been able to take certain holidays. But I have not seen enough to persuade me that the Supplier had breached the terms of the Purchase Agreement. So, from the evidence I have seen, I do not think the Lender is liable to pay Mr P any compensation for a breach of contract by the Supplier. And with that being the case, I do not think the Lender acted unfairly or unreasonably in relation to this aspect of the complaint either. Section 140A of the CCA: did the Lender participate in an unfair credit relationship? I’ve already explained why I’m not persuaded that Fractional Club 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. The PR says, for instance, that: 1. The right checks weren’t carried out before the Lender lent to Mr P;

-- 4 of 12 --

2. Mr P was pressured by the Supplier into purchasing Fractional Club membership at the Time of Sale; and 3. Fractional Club membership was marketed and sold to Mr P as an investment in breach of a prohibition on doing so. However, having considered the entirety of the credit relationship between Mr P 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; 4. The inherent probabilities of the sale given its circumstances; and, when relevant 5. Any existing unfairness from a related credit agreement. I have then considered the impact of these on the fairness of the credit relationship between Mr P and the Lender. The Supplier’s sales & marketing practices at the Time of Sale While the PR says the right affordability checks weren’t carried out at the Time of Sale, even if I were to find that the Lender failed to do everything it should have when it agreed to lend (and I make no such finding), I would have to be satisfied that the money lent to Mr P was actually unaffordable before also concluding that he lost out as a result, and then consider whether the credit relationship with the Lender was unfair to him for this reason. But from the information provided, I’m not satisfied the lending was unaffordable for Mr P. I acknowledge Mr P 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 their sales presentation that made him feel as if he had no choice but to purchase Fractional Club membership when he simply did not want to. He was also given a 14-day cooling off period and he has not provided a credible explanation for why he did not cancel his membership during that time. And with all of that being the case, there is insufficient evidence to demonstrate that Mr P made the decision to purchase Fractional Club membership because his ability to exercise that choice was significantly impaired by pressure from the Supplier. Overall, therefore, I don’t think Mr P’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 says the credit relationship with the Lender was unfair to him. And that’s the suggestion Fractional Club membership was marketed and sold to him as an investment in breach of a prohibition against selling timeshares in that way.

-- 5 of 12 --

The Supplier’s alleged breach of Regulation 14(3) of the Timeshare Regulations The Lender does not dispute, and I’m satisfied, that Mr P’s Fractional Club 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 Fractional Club 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 the Supplier did exactly that at the Time of Sale. The term “investment” is not defined in the Timeshare Regulations. But for the purposes of this decision, and by reference to the decided authorities, an investment is a transaction in which money or other property is laid out in the expectation or hope of financial gain or profit. A share in the Allocated Property clearly constituted an investment as it offered Mr P the prospect of a financial return – whether or not, like all investments, that turned out to be more than what he first put into it. But it’s important to note at this stage that the fact Fractional Club membership included an investment element did not, itself, transgress the prohibition in Regulation 14(3). That provision prohibits the marketing and selling of a timeshare contract as an investment. It does not prohibit the mere existence of an investment element in a timeshare contract, or prohibit the marketing and selling of such a timeshare contract per se. In other words, the Timeshare Regulations did not ban products such as the Fractional Club. They just regulated how such products were marketed and sold. To conclude, therefore, that Fractional Club membership was marketed or sold to Mr P as an investment in breach of Regulation 14(3), I have to be persuaded it was more likely than not that the Supplier marketed and/or sold membership to him as an investment, i.e. told him or led him to believe that Fractional Club membership offered him the prospect of a financial gain (i.e. a profit) given the facts and circumstances of this complaint. There is competing evidence in this complaint as to whether Fractional Club membership was marketed and/or sold by the Supplier at the Time of Sale as an investment in breach of Regulation 14(3) of the Timeshare Regulations. On the one hand, it’s clear that the Supplier made efforts to avoid specifically describing membership of the Fractional Club as an ‘investment’ or quantifying to prospective purchasers, such as Mr P, the financial value of their share in the net sales proceeds of the Allocated Property along with the investment considerations, risks and rewards attached to them. On the other hand, I acknowledge the Supplier’s sales process left open the possibility that the sales representative may have positioned Fractional Club membership as an investment. So, I accept it’s also possible that Fractional Club membership was marketed and sold to Mr P as an investment in breach of Regulation 14(3).

-- 6 of 12 --

However, whether or not there was a breach of the relevant prohibition by the Supplier is not ultimately determinative of the outcome in this complaint for reasons I will come on to shortly. And with that being the case, it’s not necessary to make a formal finding on that particular issue for the purposes of this decision. Would the credit relationship between the Lender and Mr P have been rendered unfair to him had there been a breach of Regulation 14(3) of the Timeshare Regulations? Having found it was possible that the Supplier breached Regulation 14(3) of the Timeshare Regulations at the Time of Sale, I now need to consider what impact that breach had on the fairness of the credit relationship between Mr P and the Lender under the Credit Agreement and related Purchase Agreement, as the case law on Section 140A makes it clear that regulatory breaches do not automatically create unfairness for the purposes of that provision. Such breaches and their consequences (if there are any) must be considered in the round, rather than in a narrow or technical way. Indeed, it seems to me that, if I’m to conclude that a breach of Regulation 14(3) led to a credit relationship between Mr P and the Lender that was unfair to him and warranted relief as a result, whether the Supplier’s breach of Regulation 14(3) led him to enter into the Purchase Agreement and the Credit Agreement is an important consideration. But on my reading of the evidence before me, the prospect of a financial gain from Fractional Club membership was not an important and motivating factor when Mr P decided to go ahead with his purchase. The PR has provided a statement from Mr P in which he said: “We were promised that at end of term of fraction that the property we part own would be sold and we would share profits. We were also told that to put our children’s name on ownership as it was beneficial. We were shown chart of how value went up and example of a sale. We were given indication that could sell at anytime but had to do it through [the Supplier] (sic).” While Mr P recalled being told that he would “share profits” from the sale of the Allocated Property, his statement does not make out that this was an important and motivating factor when he decided to go ahead with his purchase. He said nothing about why owning a fraction of a property overseas and the prospect of profiting from the sale of that property appealed to him. And considering the significant financial commitment the purchase required him to make, I do not think it automatically follows from what Mr P has said that the prospect of a financial gain was an important and motivating factor in his purchasing decision. Indeed, I find it difficult to reconcile the assertion that the prospect of a financial gain motivated him to make the purchase with the little he has recalled of what the Supplier told him about that prospect. That does not mean he was not interested in a share in the Allocated Property. After all, that wouldn’t be surprising given the nature of the product at the centre of this complaint. But as Mr P himself does not persuade me that his purchase was motivated by his share in the Allocated Property and the possibility of a profit, I don’t think a breach of Regulation 14(3) by the Supplier was likely to have been material to the decision he ultimately made.

-- 7 of 12 --

On balance, therefore, even if the Supplier had marketed or sold the Fractional Club membership as an investment in breach of Regulation 14(3) of the Timeshare Regulations, I’m not persuaded that Mr P’s decision to purchase Fractional Club membership at the Time of Sale was motivated by the prospect of a financial gain (i.e. a profit). And for that reason, I do not think the credit relationship between Mr P and the Lender was unfair to him even if the Supplier had breached Regulation 14(3). The provision of information by the Supplier at the Time of Sale The PR says Mr P was not given sufficient information at the Time of Sale by the Supplier about the ongoing costs of Fractional Club membership, the market value of the Allocated Property, title deeds and a detailed description beyond a basic unit number. As I’ve already indicated, the case law on Section 140A makes it clear 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 it’s possible the Supplier did not give Mr P sufficient information, in good time, on the various charges he could have been subject to as a Fractional Club member in order to satisfy the requirements of Regulation 12 of the 2010 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 P nor the PR have persuaded me that he would not have gone ahead with his purchase had the finer details of the Fractional Club’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. It’s not clear what the PR means by “detailed description,” and it has provided no authority for the suggestion the Supplier had to provide Mr P with information on the title deeds of the Allocated Property. What’s more, when it comes to the market value of the Allocated Property, I would draw the PR’s attention to what Mrs Justice Collins Rice said in paragraphs 106 and 110 of her judgment in Shawbrook & BPF v FOS: “Both ombudsmen rely on the reference in Sch.1 to 'exact nature and content of the rights' as being the basis for perceiving a legal obligation to provide 'value' information. But first, having regard to the high level of specificity in the Schedule, it is obvious that 'value' information is nowhere specified as such. And second, 'exact nature and content of the rights' is clearly intended, in context, to be a fair and objective identification and description of those rights. 'Value' information may possibly be context for, or commentary on, those rights, but the 'exact nature and content of rights' is something different from information which may (or may not) be relevant to how much they might be worth, now or in the future.” “I do not, and do not need to, go so far as to infer from the Regulations a legal prohibition on the provision of valuation information. My conclusion is that there is no legal obligation, derivable from Reg.12 of the Timeshare Regulations, to provide it, and that the ombudsmen's solution is, in its own terms, distinctly problematic for the regulatory framework. It remains my view that the principal legal consumer- protection control over buying and selling fractional ownership timeshares is the Reg.14(3) prohibition. That provision alone makes it hard enough to market a timeshare product containing a bare interest in the proceeds of the deferred sale of real property lawfully, without inviting the fleshing out of the law as positively demanding investor- protection information obligations at the same time.” (My emphasis added)

-- 8 of 12 --

Even if it could be said the Supplier failed to give Mr P sufficient information, in good time, in order to satisfy the requirements of Regulation 12 of the Timeshare Regulations for some of the reasons the PR gives, neither he nor the PR have persuaded me he was deprived of information that would have led him to make a different purchasing decision at the Time of Sale when I’ve already found that the prospect of a financial gain from the Allocated Property was not an important and motivating factor behind his purchase. And with that being the case, even if there were information failings (which I make no formal finding on), I can’t see why that could be said to have rendered the credit relationship in question unfair to him. The PR also says that, because some of the terms of the Purchase Agreement weren’t individually negotiated, they were unfair contract terms as were the terms governing the ongoing costs of membership. However, I can’t see that any such terms were operated unfairly against Mr P 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 Fractional Club membership are likely to have led to an unfairness that warrants a remedy even if they could be said to be unfair contract terms, which I make no formal finding on. The PR also says that a payment of commission from the Lender to the Supplier at the Time of Sale should lead me to uphold this complaint because, simply put, information in relation to that payment went undisclosed at the Time of Sale. As both sides already know, the Supreme Court handed down an important judgment on 1 August 2025 in a series of cases concerned with the issue of commission: Johnson v FirstRand Bank Ltd, Wrench v FirstRand Bank Ltd and Hopcraft v Close Brothers Ltd [2025] UKSC 33 (‘Hopcraft, Johnson and Wrench’). The Supreme Court ruled that, in each of the three cases, the commission payments made to car dealers by lenders were legal, as claims for the tort of bribery, or the dishonest assistance of a breach of fiduciary duty, had to be predicated on the car dealer owing a fiduciary duty to the consumer, which the car dealers did not owe. A “disinterested duty”, as described in Wood v Commercial First Business Ltd & ors and Business Mortgage Finance 4 plc v Pengelly [2021] EWCA Civ 471, is not enough. However, the Supreme Court held that the credit relationship between the lender and Mr Johnson was unfair under Section 140A of the CCA because of the commission paid by the lender to the car dealer. The main reasons for coming to that conclusion included, amongst other things, the following factors: 1. The size of the commission (as a percentage of the total charge for credit). In Mr Johnson’s case it was 55%. This was “so high” and “a powerful indication that the relationship…was unfair” (see paragraph 327); 2. The failure to disclose the commission; and 3. The concealment of the commercial tie between the car dealer and the lender. The Supreme Court also confirmed that the following factors, in what was a non-exhaustive list, will normally be relevant when assessing whether a credit relationship was/is unfair under Section 140A of the CCA: 1. The size of the commission as a proportion of the charge for credit; 2. The way in which commission is calculated (a discretionary commission arrangement, for example, may lead to higher interest rates);

-- 9 of 12 --

3. The characteristics of the consumer; 4. The extent of any disclosure and the manner of that disclosure (which, insofar as Section 56 of the CCA is engaged, includes any disclosure by a supplier when acting as a broker); and 5. Compliance with the regulatory rules. From my reading of the Supreme Court’s judgment in Hopcraft, Johnson and Wrench, it sets out principles which apply to credit brokers other than car dealer–credit brokers. So, when considering allegations of undisclosed payments of commission like the one in this complaint, Hopcraft, Johnson and Wrench is relevant law that I’m required to consider under DISP 3.6.4R. But I don’t think Hopcraft, Johnson and Wrench assists Mr P in arguing that his credit relationship with the Lender was unfair to him for reasons relating to commission given the facts and circumstances of this complaint. As the Supreme Court said in paragraph 326 of its judgment in Hopcraft, Johnson and Wrench, it’s not possible to simply apply the reasoning of the Supreme Court in Plevin v Paragon Personal Finance Ltd [2014] UKSC 61 (‘Plevin’) to this complaint (as the PR does) when it’s concerned with a product and marketplace that were very different to those in Plevin. What’s more, Mr P was provided with information as to the price of Fractional Club membership and the cost of the Credit Agreement (interest rate, fees, APR and monthly repayments). So, he was at least in a position from which he could understand the cost of the Credit Agreement and compare it with other options that might have been available at the Time of Sale. I have not seen anything to suggest the Lender and Supplier were tied to one another contractually or commercially in a way that was not properly disclosed to Mr P, nor have I seen anything that persuades me that the commission arrangement between them gave the Supplier a choice over the interest rate that led Mr P into a credit agreement that cost disproportionately more than it otherwise could have. I acknowledge it’s possible that the Lender and the Supplier failed to follow the regulatory guidance in place at the Time of Sale insofar as it was relevant to disclosing the commission arrangements between them. But as I’ve said before, the case law on Section 140A makes it clear that regulatory breaches do not automatically create unfairness for the purposes of that provision. Such breaches and their consequences (if there are any) must be considered in the round, rather than in a narrow or technical way. And with that being the case, it’s not necessary to make a formal finding on that because, even if the Lender and the Supplier failed to follow the relevant regulatory guidance at the Time of Sale, it’s for the reasons set out below that I don’t think any such failure is itself a reason to find the credit relationship in question unfair to Mr P.

-- 10 of 12 --

In stark contrast to the facts of Mr Johnson’s case, the amount of commission paid by the Lender to the Supplier for arranging the Credit Agreement that Mr P entered into was not high. At £760.50, it was only 9.75% of the amount borrowed and even less than that (5.34%) as a proportion of the charge for credit. So, had he known at the Time of Sale that the Supplier was going to be paid a flat rate of commission at that level, I’m not persuaded that he either wouldn’t have understood that or would have otherwise questioned the size of the payment at that time. After all, Mr P wanted Fractional Club membership and had no obvious means of his own to pay for it. And at such a low level, the impact of commission on the cost of the credit he needed for a timeshare he wanted does not strike me as disproportionate. So, I think he would still have taken out the loan to fund his purchase at the Time of Sale had the amount of commission been disclosed. What’s more, based on what I’ve seen, the Supplier’s role as a credit broker wasn’t a separate service and distinct from its role as the seller of timeshares. It was simply a means to an end in the Supplier’s overall pursuit of a successful timeshare sale. I can’t see that the Supplier gave an undertaking – either expressly or impliedly – to put to one side its commercial interests in pursuit of that goal when arranging the Credit Agreement. And as it was not acting as an agent of Mr P but as the supplier of contractual rights he obtained under the Purchase Agreement, the transaction does not strike me as one with features that suggest the Supplier had an obligation of ‘loyalty’ to him when arranging the Credit Agreement, and thus a fiduciary duty. Overall, therefore, I’m not persuaded the commission arrangements between the Supplier and the Lender were likely to have led to a sufficiently extreme inequality of knowledge that rendered the credit relationship unfair to Mr P. 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’m not persuaded the credit relationship between Mr P and the Lender under the Credit Agreement and related Purchase Agreement was unfair to him. So I don’t think it would be fair or reasonable that I uphold this complaint on that basis. Commission: The alternative grounds of complaint While I’ve found that Mr P’s credit relationship with the Lender was not unfair to him for reasons relating to the commission arrangements between it and the Supplier, two of the grounds on which I came to that conclusion also constitute separate and freestanding complaints to Mr P’s complaint about an unfair credit relationship. So, for completeness, I’ve considered those grounds on that basis 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 Lender without telling Mr P (i.e. secretly). And 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.

-- 11 of 12 --

However, for the reasons I set out above, I’m not persuaded that the Supplier – when acting as credit broker – owed Mr P 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 because, for the reasons I also set out above, 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. Overall conclusion Given the facts and circumstances of this complaint, I do not think the Lender acted unfairly or unreasonably when it dealt with Mr P’s Section 75 claims. I’m not persuaded the Lender was party to a credit relationship with him under the Credit Agreement and related Purchase Agreement that was unfair to him for the purposes of Section 140A of the CCA. And having taken everything into account, I see no other reason why it would be fair or reasonable to direct the Lender to compensate him. My final decision For the reasons set out above, I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr P to accept or reject my decision before 26 May 2026. Asa Burnett Ombudsman

-- 12 of 12 --