Not upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; rejection of Section 75 claim; alleged breach of Timeshare Regulations; undisclosed commission complaint against Shawbrook Bank Limited

Decision detail

Summary

Mrs R purchased Signature Collection timeshare membership in September 2015 for £11,006, financed through a £24,512 loan from Shawbrook Bank Limited. In February 2022, over six years later, Mrs R raised complaints alleging the supplier had misrepresented the product as an investment in breach of the Timeshare Regulations and that the lender had participated in an unfair credit relationship. The lender rejected the Section 75 claim as time-barred. The ombudsman upheld the lender's position, finding that the claim was indeed time-barred under the Limitation Act 1980 and that even if a regulatory breach had occurred, it was not material to Mrs R's purchasing decision, which was primarily motivated by holiday benefits rather than investment prospects. The ombudsman also rejected arguments regarding undisclosed commission, noting that no commission was paid at the time of sale.

The Ombudsman's reasoning

The ombudsman found that the Section 75 claim was time-barred under the Limitation Act 1980 as more than six years had passed between the time of sale (27 September 2015) and when the claim was first notified to the lender (10 February 2022). Regarding Section 140A, the ombudsman concluded that even if the supplier had breached Regulation 14(3) of the Timeshare Regulations by marketing the membership as an investment, this was not material to Mrs R's purchasing decision, as the evidence suggested she was primarily motivated by holiday benefits rather than investment prospects. The ombudsman placed little weight on Mrs R's witness statement due to its late provision (over eight years after the sale) and the risk of it being influenced by external factors. Regarding the commission argument, the ombudsman found that no commission was paid at the time of sale and that the supplier was not acting as a fiduciary agent for Mrs R.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website