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

Decision detail

Summary

Mr and Mrs W purchased a Fractional Club timeshare membership in September 2013 for £10,900, financed by Shawbrook Bank Limited. The membership included a share in the net sale proceeds of an allocated property. In September 2018, they complained that the supplier had misrepresented the product and that the lender had participated in an unfair credit relationship. The lender rejected all grounds of complaint. The ombudsman found no actionable misrepresentation under section 75 of the Consumer Credit Act 1974, as the complainants provided insufficient evidence of false statements of fact. Regarding section 140A unfairness, the ombudsman concluded that even if the supplier had breached Regulation 14(3) by marketing the timeshare as an investment, this was not a material motivating factor in the purchase decision, as evidenced by the complainants' failure to raise this issue until five years later. The ombudsman also found that the commission of 9.93% was not disproportionately high and that the supplier did not owe a fiduciary duty. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found no actionable misrepresentation by the supplier under section 75 because: (1) no guarantee of a specific end date was proven; (2) insufficient evidence of false statements regarding exclusivity or alternative release methods; (3) statements about investment potential were opinions rather than false statements of fact. Regarding section 140A unfairness, the ombudsman concluded: (1) the lending was affordable; (2) no credible evidence of pressure preventing choice; (3) even if the supplier breached Regulation 14(3) by marketing as an investment, this was not a material motivating factor in the purchase decision, as evidenced by the professional representative's failure to raise this issue until five years later and failure to provide promised witness statements; (4) the commission of 9.93% was not disproportionately high compared to the 55% in the Johnson case; (5) the supplier did not owe a fiduciary duty; (6) regulatory breaches do not automatically create unfairness under section 140A and must be considered in the round with their actual impact on the consumer.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website