Not upheld: Section 75 claim (misrepresentation and breach of contract) and Section 140A unfair credit relationship claim relating to timeshare financing complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr F purchased a Fractional Club timeshare membership in August 2014 financed by a loan from Shawbrook Bank Limited. He complained in May 2024, nearly 10 years later, alleging misrepresentation by the Supplier and that the credit relationship was unfair. The ombudsman found the Section 75 misrepresentation claim time-barred under the Limitation Act 1980's six-year limitation period. Regarding the Section 140A unfairness claim, the ombudsman found no evidence that Mr F was motivated by the investment element of the product, that the commission arrangement (8.89% of charge for credit) was disproportionately high, or that the sales process involved improper pressure. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found the Section 75 misrepresentation claim time-barred because it was brought almost 10 years after the August 2014 sale, exceeding the six-year limitation period under the Limitation Act 1980. The ombudsman rejected arguments about concealment and fraud under Section 32 of the Limitation Act, finding that Mr F's concerns would have been apparent shortly after purchase. Regarding Section 140A unfairness, the ombudsman found no evidence that the prospect of financial gain was a motivating factor in Mr F's purchase decision, and the commission of 8.89% of the charge for credit was not disproportionately high compared to the Supreme Court's guidance in Hopcraft, Johnson and Wrench. The ombudsman also found insufficient evidence of pressure during the sales process, noting Mr F had a 14-day cooling-off period he did not use.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website