Not upheld: unfair credit relationship under Section 140A CCA; Section 75 CCA claim rejection; alleged breach of Timeshare Regulations Regulation 14(3); undisclosed commission complaint against Clydesdale Financial Services Limited trading as Barclays Partner Finance

Decision detail

Summary

Mrs B and Mr B purchased Fractional Club timeshare membership in October 2016 for £19,419 (reduced to £7,490 after trade-in), financed through a credit agreement with Clydesdale Financial Services Limited. The membership included a share in an allocated property's net sale proceeds. In November 2021, they complained that the product was misrepresented as an investment in breach of the Timeshare Regulations, that the credit relationship was unfair under Section 140A of the Consumer Credit Act 1974, and that the lender wrongly rejected their Section 75 claim. The ombudsman found no actionable misrepresentation, determined that any breach of Regulation 14(3) was not material to their purchasing decision (which was motivated by practical considerations such as upgraded family accommodation), and concluded that the undisclosed commission of £470.58 (2.50% of borrowing) was not sufficiently high to render the credit relationship unfair. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found no actionable misrepresentation under Section 75 because statements about investment appreciation were opinions rather than false statements of fact. Regarding Section 140A, although the supplier may have breached Regulation 14(3) by marketing the product as an investment, this was not material to Mrs B and Mr B's purchasing decision, which was motivated by practical considerations (upgraded accommodation for family safety) rather than investment prospects. The evidence showed they intended to cancel shortly after purchase, which was incompatible with investment motivation. The commission of £470.58 (2.50% of borrowing) was not sufficiently high to render the credit relationship unfair, particularly given Mrs B's lack of alternative means to fund the purchase and the low impact on credit costs. The lender was not tied to the supplier in an undisclosed manner, and regulatory breaches do not automatically create unfairness under Section 140A.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website