Upheld: Investment mis-selling complaint against First Holiday Finance Limited
Financial Ombudsman decision DRN-4652706 of 2025-07-31T00:00:00+00:00. Investment mis-selling complaint against First Holiday Finance Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-4652706 |
|---|---|
| Decision date | 2025-07-31T00:00:00+00:00 |
| Firm | First Holiday Finance Limited |
| Product | Other regulated product |
| Claim type | Investment mis-selling |
| Outcome | Upheld |
| Remedy | The Lender must: (1) Refund all repayments made under the Credit Agreement and cancel any outstanding balance; (2) Refund annual management charges paid and the trade-in value of the trial membership; (3) Deduct the value of promotional giveaways used and the market value of holidays taken using Fractional Points (or alternatively deduct corresponding annual management charges); (4) Add simple interest at 8% per annum to net repayments from the date each was made until settlement; (5) Remove adverse credit file information recorded within six years of the decision; (6) If membership is still in place, indemnify Mr G against all ongoing liabilities provided he assigns or holds the Allocated Property interest in trust for the Lender. |
Summary
Mr G purchased Fractional Club timeshare membership in August 2016 for £17,845, financed through First Holiday Finance Limited. He was told by the Supplier that the membership was an investment offering property appreciation and profit potential. After discovering the investment claims were misleading and that the product underperformed, Mr G complained in November 2021. The Ombudsman found the Supplier breached Regulation 14(3) of the Timeshare Regulations by marketing the product as an investment, which rendered the credit relationship unfair under Section 140A of the Consumer Credit Act 1974. The Lender, as deemed agent of the Supplier, was held responsible for this breach. The Ombudsman upheld the complaint and ordered the Lender to refund all repayments, management charges, and the trade-in value, plus interest, while Mr G assigns his fractional points to the Lender.
The Ombudsman's reasoning
The Ombudsman found that the Supplier breached Regulation 14(3) of the Timeshare Regulations by marketing and selling Fractional Club membership as an investment. Although the product itself was not prohibited (as it contained an investment element), the Regulations prohibited marketing it as an investment. The training materials and sales practices indicated that sales representatives were encouraged to present membership as an opportunity to build equity and achieve financial returns. Mrs G's testimony, despite some minor inconsistencies, provided credible evidence that the investment aspect was a material motivating factor in the purchase decision. The Ombudsman concluded that Mr G would not have proceeded with the purchase absent the investment representation. Under Section 140A of the CCA, the Supplier's breach (as deemed agent of the Lender) rendered the credit relationship unfair. The Ombudsman rejected the Lender's challenges to the witness testimony, finding it was genuinely dated 10 May 2021 and not influenced by subsequent case law.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| First Holiday Finance Limited, all decisions | 19 | 21% |
| Investment mis-selling, all decisions | 14,206 | 37% |
| Other regulated product, all decisions | 51,105 | 30% |
Source
Read the original decision on the Financial Ombudsman Service website