Not upheld: connected lender liability (section 75 CCA); unfair credit relationship (section 140A CCA); alleged breach of Timeshare Regulations regulation 14(3) complaint against Clydesdale Financial Services Limited, trading as Barclays Partner Finance

Decision detail

Summary

Mr A purchased fractional club timeshare membership financed by a £27,410 loan from the lender in July 2014. After falling into arrears in February 2015, Mr A complained that the loan was mis-sold and that the lender was liable under section 75 (connected lender liability) and section 140A (unfair credit relationship) of the Consumer Credit Act 1974. The lender rejected these complaints. The ombudsman found no actionable misrepresentation or breach of contract by the supplier, and concluded that even if the supplier had breached the Timeshare Regulations by marketing the membership as an investment, this did not materially influence Mr A's purchase decision. The ombudsman therefore found the credit relationship was not unfair and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found no actionable misrepresentation because: (1) statements about the property being sold after 19 years reflected the main thrust of the contracts; (2) describing membership as an investment was not untrue given the share in property sale proceeds; (3) monthly payment amounts were clearly stated in the credit agreement. Regarding section 140A, even accepting the possibility of a breach of regulation 14(3) (marketing as investment), the ombudsman found Mr A's purchase decision was not materially motivated by the prospect of financial gain, and therefore the credit relationship was not rendered unfair. The lender's commission of 10% was not excessive. The loan was affordable until Mr A lost his job.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website