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

Decision detail

Summary

Mr M complained that Shawbrook Bank Limited acted unfairly by being party to an unfair credit relationship and by rejecting his Section 75 claim for misrepresentation regarding a fractional club timeshare membership purchased in 2015 for £3,590 financed by a £9,818 loan. The complaint alleged the supplier misrepresented the investment potential and guaranteed end date of the membership, and breached Regulation 14(3) of the Timeshare Regulations by marketing it as an investment. The ombudsman found no factual misrepresentation, as statements about the investment element and share in property proceeds were either true or honestly held opinions. Although a possible breach of Regulation 14(3) was acknowledged, the ombudsman found this did not render the credit relationship unfair because Mr M's purchase was motivated by obtaining holiday rights rather than financial gain, as evidenced by his pattern of increasing fractional points with each purchase. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that while the supplier may have marketed the fractional club membership as an investment in breach of Regulation 14(3) of the Timeshare Regulations, this was not determinative of unfairness. The key issue was whether Mr M's purchase decision was motivated by the prospect of financial gain. The evidence suggested Mr M's primary motivation was to obtain holiday rights, as evidenced by his pattern of increasing fractional points with each purchase. The ombudsman placed little weight on Mr M's late testimony (provided a decade after purchase and five years after the initial complaint), finding it lacked specificity and may have been influenced by subsequent case law developments. The ombudsman applied the principle from case law that regulatory breaches do not automatically create unfairness under Section 140A; the impact on the complainant must be considered in the round. Since Mr M would likely have proceeded with the purchase regardless of any breach of Regulation 14(3), no unfair credit relationship was established.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website