Not upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; rejection of Section 75 claim; alleged breach of Regulation 14(3) of the Timeshare Regulations; undisclosed commission arrangements complaint against Shawbrook Bank Limited

Decision detail

Summary

Mrs S and Mr S purchased a Fractional Club timeshare membership in October 2016 financed by Shawbrook Bank Limited and raised complaints in January 2023 alleging misrepresentation, breach of timeshare regulations prohibiting investment marketing, and undisclosed commission arrangements. The ombudsman found the Section 75 misrepresentation claim time-barred under the six-year limitation period. Regarding the Section 140A unfair credit relationship claim, the ombudsman determined that even if the Supplier breached Regulation 14(3) by marketing the product as an investment, this was not material to the complainants' purchasing decision, as evidenced by their own statements which appeared influenced by subsequent legal developments. The ombudsman also rejected the commission complaint, noting no commission was actually paid and the Supplier's broker role was not improperly concealed. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A analysis, considering regulatory breaches do not automatically create unfairness. The Section 75 claim was rejected as time-barred under the Limitation Act 1980 (six years from 13 October 2016 to 31 January 2023). Regarding alleged misrepresentation as an investment, the ombudsman found the later witness statement lacked credibility due to timing coinciding with the Shawbrook judgment and the Investigator's view, and concluded the prospect of financial gain was not a material motivating factor in the purchase decision. The ombudsman distinguished this case from the Supreme Court's Hopcraft decision, noting no commission was actually paid and the commercial relationship was not improperly concealed.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website