Not upheld: Other regulated complaint complaint against Clydesdale Financial Services Limited trading as Barclays Partner Finance

Decision detail

Summary

Mr K purchased a Fractional Club timeshare membership for £11,648 in September 2017, financed through a credit agreement with Barclays Partner Finance. In May 2019, through a professional representative, Mr K complained that the timeshare was misrepresented as an investment in breach of Regulation 14(3) of the Timeshare Regulations, that the lender failed to conduct proper affordability checks, that he was pressured into the purchase, and that commission paid to the supplier was undisclosed. The lender declined a Section 75 misrepresentation claim. The ombudsman found that while a breach of Regulation 14(3) was possible, Mr K's own account did not indicate that investment returns motivated his purchase, making any breach non-causative. The commission of 2.5% was found to be low and reasonable. The ombudsman concluded the credit relationship was not unfair under Section 140A and upheld the lender's decision to decline the Section 75 claim.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A analysis, considering whether any breaches or failings were causative of the consumer entering the agreement. The ombudsman found that while it was possible the supplier breached Regulation 14(3) by marketing the timeshare as an investment, this was not determinative. The key finding was that Mr K's own account did not indicate that the prospect of financial gain was an important motivating factor in his purchase decision. The ombudsman noted that regulatory breaches do not automatically create unfairness under Section 140A; the impact on the complainant must be considered. The commission of 2.5% was found to be low and not disproportionate, unlike the 55% commission in the Johnson case. The ombudsman concluded that Mr K would have proceeded with the purchase regardless of any breach.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website