Not upheld: unfair credit relationship (Section 140A CCA), connected lender liability (Section 75 CCA), alleged misrepresentation and breach of contract by supplier, alleged breach of Timeshare Regulations complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr and Mrs S purchased Fractional Club timeshare membership financed by Shawbrook Bank Limited and later complained that the supplier had misrepresented the product as an investment, breached contract regarding holiday availability, and that the lender was party to an unfair credit relationship. The ombudsman's provisional decision found no actionable misrepresentation or breach of contract, and that even if the supplier had breached Regulation 14(3) of the Timeshare Regulations by marketing the product as an investment, this was not material to the purchase decision. The ombudsman also found the commission arrangement (£788.80, representing 5% of the credit charge) was modest and would not have deterred the purchase had it been disclosed. In the final decision, the ombudsman maintained these findings despite the professional representative's lengthy submissions, finding no evidence that Mr and Mrs S would have made a different purchasing decision and no basis to uphold the complaint.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A, considering whether any breaches or failings rendered the credit relationship unfair. While acknowledging competing evidence on whether the supplier breached Regulation 14(3) by marketing the product as an investment, the ombudsman found this was not causative of the purchase decision. The evidence showed Mr and Mrs S were motivated by shorter membership term and better availability, not investment returns. The commission was modest (5% of charge for credit) compared to the Supreme Court's threshold in Hopcraft, and disclosure would not have changed their decision. No actionable misrepresentation or breach of contract was established. Regulatory breaches do not automatically create unfairness under Section 140A; their impact must be considered in the round.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website