Not upheld: Goods and services under S75 complaint against Tandem Bank Limited

Decision detail

Summary

Mr A complained that Tandem Bank Limited acted unfairly by being party to an unfair credit relationship and by rejecting a Section 75 claim relating to his purchase of a timeshare membership called the 'Signature Collection' in September 2018 for £31,268. Mr A alleged that the supplier breached Regulation 14(3) of the Timeshare Regulations by marketing the membership as an investment, that the lending was unaffordable, that he experienced pressured sales tactics, and that the commission arrangements were undisclosed and rendered the credit relationship unfair. The ombudsman found that Mr A's primary motivation was to obtain an enhanced holiday product based on his long history of timeshare purchases and systematic product upgrades, not to make an investment. The ombudsman concluded that even if the supplier had breached the investment marketing prohibition, this would not have affected Mr A's decision to purchase. The commission of 2.5% was not so high as to render the credit relationship unfair, and Mr A had sufficient information about the cost of the credit agreement. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Mr A's primary motivation for purchasing the Signature Collection was to obtain an enhanced holiday product with greater flexibility and superior accommodation, not as an investment. This conclusion was based on Mr A's long history of timeshare purchases focused on holiday benefits, his systematic upgrading through the supplier's product range, the financial and holiday inducements offered at the point of sale, and the fact that any investment return was not realisable until 2037. Even if the supplier breached Regulation 14(3) by marketing the membership as an investment, this would not have affected Mr A's decision to purchase. The commission of 2.5% was not so high as to render the credit relationship unfair, particularly in contrast to the 55% commission in the Johnson case. Mr A had sufficient information about the cost of the credit agreement and could have compared it with other options. The ombudsman rejected allegations of unaffordable lending, pressured sales tactics, and insufficient information disclosure as either unsupported by evidence or not material to the fairness of the credit relationship.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website