Mitsubishi HC Capital UK PLC · DRN-6247554

The complaint Mr D complains that Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance (Novuna) has treated him unfairly regarding a claim he made under Section 75 of the Consumer Credit Act 1974 (Section 75). What happened On 28 July 2023, Mr D took out a fixed sum loan agreement with Novuna to finance the purchase of fitted wardrobes for three rooms in his house from a merchant, who I’ll call H. The loan was for a total purchase price of £11,344.95 (agreement A) and had an interest free period of 6 months, following which Mr D was to make monthly repayments of £189.23 over 108 months. Variations were made to the order, and these were agreed by both Mr D and H on 17 August 2023 (agreement B). The variations reduced the total purchase price by £1,298. H has said it refunded this amount directly to Mr D, however Mr D states he has not received a refund. Discussions commenced about further variations to the order in September 2023 (agreement C). H then attempted to fit the design agreed in agreement B at Mr D’s property on 17 October 2023. H fitted two wardrobes and bedside units in one of the bedrooms. It intended to also install the wardrobes designed for the alcove unit in the same room however this was not completed. Mr D raised a complaint to H and later, brought his complaint to Novuna under Section 75. He said he had asked for sliding doors, for the interior of the cupboards to be lined and for the wardrobes to be to ceiling height. The design H attempted to fit did not meet these requirements, and Mr D said the fitter could not fit what he had brought due to incorrect measurements. H on the other hand, said it could have fitted the manufactured designs which had been made as agreed, sliding doors were not possible with the units Mr D had ordered, and if he wished to make the changes then this would be at extra cost. H ultimately refunded £7,933.98 which was the cost of the order for two of the rooms which were subsequently cancelled. This left a balance of £3,410.97 for Mr D to pay. H then refunded a further 25% of the cost of the alcove unit which wasn’t fit (£557). This left a balance of £2,853.97 for Mr D to pay. Mr D brought his claim to Novuna in October 2023. In April 2024, Mr D was sent a response which was upheld in Mr D’s favour. Novuna then further reviewed the claim and noted that the claim had been reviewed by another Ombudsman body which had not upheld in Mr D’s favour, so Novuna revised its response and declined the claim. Novuna said Mr D was required to pay for the goods he had fitted and based on the information it had received from H it found it fair that Mr D was being charged 75% of the price of the alcove unit. Alternatively, H could return to complete the fitting of the alcove unit and Mr D could pay the full price for it. Novuna offered £400 for errors in the service it provided but otherwise did not uphold the claim. Mr D brought his complaint to our service. Our investigator reviewed matters and ultimately found that Novuna had treated Mr D fairly with regard to the claim. She also said the amount

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already offered for the errors made in service provided was reasonable. Mr D asked for an ombudsman to consider his complaint. He said due to a poor design and failure to provide a resurvey when required, H did not supply or fit the alcove wardrobe. As he did not cancel the fitting, the 75% cancellation charge is unacceptable. Mr D said he has accepted paying for the wardrobes that were fitted and the compensation provided, but that he does not feel he should pay for the alcove wardrobe at all. So, the complaint was passed to me to decide. I issued a provisional decision in which I said the following: “Section 75 allows – in certain circumstances - for a creditor (Novuna) to be jointly and severally liable for any claim by the debtor (Mr D) of breach of contract or misrepresentation made by a supplier of goods and/or services (H). I’m satisfied that the relevant criteria for making a claim under this legislation has been met. In this complaint, Mr D is not contending that there has been a misrepresentation of any kind. I have therefore focused on whether there has been a breach of contract which Novuna can or should be held jointly liable for under the connected lender liability afforded by Section 75. As far as I can see, Mr D placed the order and paid a deposit on 28 July 2023. This is the date he contracted with H for agreement A. On 17 August 2023, variations were made to the order. For a variation to order (VTO) to be complete and for the product that was being supplied to change in a way that would affect the contract, a surveyor would need to sign off on the changes and Mr D would also need to sign the survey reports. This occurred on 17 August 2023, so agreement B was formed with consent from both parties, and the total order price was reduced accordingly. Later in August 2023, Mr D contacted H to ask about changing the doors in the alcove units to sliding doors. Mr D was informed that room plans had already been submitted, a re-design and re-survey would cost £150, and he would lose his installation date (which had already been set). H said Mr D did not contact it further until 12 October 2023. As far as I can see, Mr D spoke to H sooner than this. On 9 September 2023, a designer sent Mr D an email in which a new design summary for the bedroom in question was attached. The designer confirmed to Mr D that he had amended the design to sliding doors and revised the price accordingly. The designer also sent a copy of the file to the surveyor to ensure he can action the revised designs as soon as possible. On 11 September 2023, Mr D responded to ask whether the amendment to the design will be checked by the surveyor. He also said that on that basis, H should proceed. On 12 September 2023, the surveyor emailed Mr D confirming a surveyor will need to re-visit to check and sign off the new plan, whether it be him or another surveyor. I have considered this communication. I can see that Mr D was under the impression that he could make changes to the order at this time, but he was aware any changes were pending attendance by a surveyor to check the changes were possible to execute. So, the necessary steps for a VTO to take place which included a surveyor and Mr D signing the survey reports had not all taken place. Mr D then contacted H on 12 October 2023 to ask about room preparation prior to the fitting taking place. And then on 17 October 2023, H attempted to fit the designs which had been agreed in agreement B. Now I will discuss Section 75. Technically, the last agreed contract between both parties was

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agreement B. When H attempted to fit the wardrobes, it was doing so as per this last agreed contract. There are only two ways in which this might have been breached, and I will explore these both in turn below. The first is if H could not fit the wardrobes as per agreement B. Mr D has maintained in his correspondence to us that this was the case and the doors would not fit. Having reviewed all the information and evidence available, I cannot see this was the case. Mr D emailed the surveyor whilst the fitter was at the property and said the fitter does not have the sliding doors so he can’t fit the alcove wardrobe. Mr D also complained about the lack of a back to the wardrobe and that the walls had not been prepared accordingly. He did not complain of the measurements being wrong or say that the fitting could not take place due to an error made by H. H’s notes suggest the fitter could have installed the product but that Mr D halted progress. The designs agreed in agreement B did not have a back on them and there is no other evidence to suggest that the designs brought by H did not otherwise conform to what was agreed in agreement B. With regard to the sliding doors, I appreciate Mr D was expecting them but the VTO for them had not yet been completed. H is saying it was able to complete the fit as per the designs agreed in agreement B. So, taking this into consideration, I don’t find we can say H could not fit the wardrobes as agreed and has therefore breached the contract. The second is if the conversations between Mr D and H that took place in September 2023 were sufficient for us to reasonably conclude the contract had been further varied. If agreement C had been completed and superseded agreement B then in attempting to fit agreement B, H had breached the contract. I have considered this matter carefully and I’m sorry to say, I don’t think agreement C did replace agreement B. I cannot comment on the service provided by H, but I can see why Mr D was under the impression when the fitter came that he was going to be receiving sliding doors. The conversations about changing the doors to sliding doors had started, and the intent was there. But without (1) the surveyor having attended (2) the planned fit date having been postponed and (3) the re-design/re-survey fee of £150 having been paid, I don’t find that the contract had been sufficiently changed for me to reasonably say the contract had been varied and therefore breached when H brought the designs from agreement B to fit. Given Mr D had previously successfully, undertaken all the reasonable steps for a VTO to take place in August, and as this didn’t happen the same way in September, I consider it would’ve been reasonable for Mr D to question this, or contact H again about the date the surveyor would attend to finalise the VTO. I accept and understand Mr D’s frustration, and I am not saying that the communication was always clear between him and H. However, from a Section 75 perspective I don’t find the contract agreed and accepted by both parties (agreement B) was breached. Whilst conversations were ongoing about a new change to the wardrobes, given the required steps to finalise and complete the new design hadn’t been confirmed and agreed by both parties, I am unable to reasonably conclude that a new VTO had been agreed, or that there was a breach of contract. This means that I don’t find Novuna’s outcome on the claim was incorrect overall. Mr D has concerns about paying 75% of the cost of the alcove. As I don’t find there was a breach of contract it means I find Mr D should pay for the cost of the wardrobes fitted and for the alcove unit in accordance with any relevant terms from the contract agreed. I have checked the terms of the agreement to see whether the amount charged is reasonable and can see they say:

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“9. If you ask to cancel the contract after expiry of the cancellation period, we will consider agreeing but we estimate that we will incur the following costs, and cancellation will be subject to you paying the following charges within 7 days of us notifying you of the accepted cancellation: i) if we have started manufacturing the goods, up to 50% of the contract price; ii) if we have completed manufacture of the goods, up to 75% of the contract price; iii) any sum remaining unpaid after the date it became due will attract interest at a rate of 3% above the base rate of Bank of England.” As the goods had been manufactured at the point of fitting, and Novuna has explained to Mr D that H was still willing to fit the alcove wardrobe as originally agreed if Mr D consented to this, I find no errors have been made and Mr D is liable for the amount he is contesting. Alternatively, Mr D can contact H directly and see if the offer of fitting the unit as originally agreed is still available. I can see that there have been some issues with the way in which Novuna handled the claim. As these are not in contention, I don’t intend to repeat them here, but I will say that Novuna has offered £400 compensation for the errors it has made and I consider this is reasonable. I can see that Mr D is frustrated with H and the inconvenience of having to store clothes in boxes for extended periods of time etc. However, Novuna is not responsible for these frustrations and so it would not be fair and reasonable for me to ask it to compensate him for those issues. I can only review the service Novuna has provided and for the errors made, I find it has offered a reasonable amount.” Novuna accepted the provisional decision. Mr D disagreed with the provisional decision and raised the following: • Mr D states he experienced pressure selling when H originally attended his property to discuss the fitted wardrobes, including the salesman having signed the contract himself. Mr D states he was not in receipt of an acceptable product from the start which is in breach of consumer protection legislation and renders the contract null and void. • Mr D states Novuna failed to obtain confirmation from Mr D that he was happy and satisfied with the product before releasing payment to H. • Mr D raises concerns about some inaccuracies contained in the background information section of the provisional decision. • Mr D states he did not cancel the fitting but rather the fitter from H and the area installation manager confirmed the unsuitability of the design supplied to fit in the space available. So, the 75% cancellation charge is unfair and should be deemed an unfair contract term. • Mr D states the pricing of the alcove unit was unfair. • Mr D states H were aware of the faulty design which was in place before arriving to fit and failed to take adequate action to remedy this. Mr D however, was aware that sliding doors were going to be required and assumed this is what was going to be fit. • Mr D states the fitter did not bring modules to fit into the alcove unit, but intended to construct the wardrobe on-site. Mr D questions how bespoke the wardrobes actually were and says that he is being charged 75% of the cost of the alcove unfairly 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.

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Mr D contends that he experienced pressure selling and did not sign the contract himself. This argument is counterproductive as without a valid contract in place it is not possible to hold Novuna liable for a breach of contract or misrepresentation under the connected lender liability afforded by Section 75. In any event, the complaint I have concerns Section 75, so I am unable to consider whether the contract was mis-sold in the first place. This is something that Mr D would need to take up with H directly. I should add that Mr D argues that he was provided with an unacceptable product. I explained in my provisional decision that none of the evidence provided suggests that the product H attempted to fit did not conform to that which was agreed in agreement B. Mr D has mentioned that he is unhappy Novuna released payment to H without confirming whether Mr D was happy or satisfied with the goods. Mr D contracted with H for the supply and fit of wardrobes, and utilised Novuna for financing of this contract. The contract with Novuna indicates that in signing the finance agreement, Mr D is providing authority to Novuna to release payment to H on supply of the goods. There is no requirement for Novuna to establish customer satisfaction with the product before releasing payment and so I don’t find Novuna made an error in releasing payment in the way in which it did. Mr D has pointed out what he feels are errors in the version of events as listed in the provisional decision. Where required, I have made amendments. However, I would like to point out that there has been a lot of conflicting information provided by both Mr D and H on this complaint. Where both parties have a differing view on what has happened, this has been pointed out. Mr D asks me to make changes and although I can accept much of what he says, without suitable evidence I cannot do so for all of it, especially where H provides a different version of events. One such version of events is what occurred on 17 October 2023 when the fitting took place, especially as it relates to whether the alcove unit could or could not be fitted. Mr D says he has adequately shown that the fitter could not fit the alcove unit on the day and describes the visits made and what the staff from H told him. H on the other hand, says it was Mr D who stopped this fitting. The only evidence I have from the day is the emails Mr D sent to H, and these do not suggest the fitter was unable to complete the work, as pointed out in the provisional decision. Where there is such contention and without evidence to confirm the same, I cannot safely assume that the fit of the alcove wardrobe could not be completed on the day in question. I understand that Mr D states he did not receive a refund of the £1,298 which was the price reduction when agreement A was amended to agreement B. Novuna has previously informed Mr D that H sent a refund of £362 and £936 (which makes up the £1,298 figure) to Mr D’s bank account and he did not raise any concerns about this. If Mr D has not been provided with this refund, then this would pose a concern, but this is a new issue and doesn’t change the outcome as it relates to the claim under Section 75. I would therefore suggest that Mr D take this up with H (and Novuna if necessary) as H has said it provided a refund and would be able to honour the error now if it has been overlooked. Mr D questions the disproportionate pricing of the alcove units as they differ between the different rooms he was looking to have wardrobes installed in. He asks why one was being charged at £557 and the other at £2,229.57. For clarity I will explain that the £557 figure mentioned is 25% of the cost of the alcove unit only. I understand and appreciate that Mr D is unhappy with H’s designs, what they brought to fit, and what happened during the fitting. I am unable to comment on the actions and conduct of H. I can only look at the contract in place and attempt to determine whether there was a breach of contract such that the contract was frustrated and Novuna should be held jointly liable.

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I empathise with the situation Mr D finds himself in, but none of the further information provided changes the reasoning provided in my provisional decision as to why a breach of contract has not been established. That being the case, I am unable to say that Novuna should be held liable for the issues Mr D experienced. Mr D has been provided with options for moving forward, and any further grievance he has with H can be pursued through other means. On this complaint, my outcome remains unchanged and for the same reasons as outlined in the provisional decision. My final decision I do not uphold Mr D’s complaint against Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance, for the reasons set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr D to accept or reject my decision before 21 April 2026. Vanisha Patel Ombudsman

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