Not upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; misrepresentation claim under Section 75 of the Consumer Credit Act 1974; alleged breach of Timeshare Regulations complaint against Clydesdale Financial Services Limited trading as Barclays Partner Finance

Decision detail

Summary

The estate of Mr N complained that Clydesdale Financial Services Limited (trading as Barclays Partner Finance) acted unfairly by being party to an unfair credit relationship and by rejecting a Section 75 claim for misrepresentation relating to a Fractional Club timeshare purchased in August 2016 for £34,291. The estate alleged the Supplier misrepresented the product as an investment and failed to provide adequate information, in breach of the Timeshare Regulations. The ombudsman found the Section 75 misrepresentation claim failed because the purchase price exceeded £30,000. On the Section 140A unfair credit relationship claim, the ombudsman accepted it was possible the Supplier breached Regulation 14(3) by marketing the product as an investment, but found this breach was not causative of Mr N's purchasing decision. Evidence showed Mr N was motivated by holiday rights, not investment returns, as demonstrated by his regular holiday usage and his 2018 complaint focused on holiday bookings. The ombudsman applied the Supreme Court's principle from Plevin that regulatory breaches do not automatically create unfairness under Section 140A, and concluded the credit relationship was not unfair to Mr N. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the legal test for unfair credit relationships under Section 140A of the Consumer Credit Act 1974, considering all circumstances including the Supplier's conduct, information provision, and evidence of what was said at the time of sale. The ombudsman found that while it was possible the Supplier marketed the product as an investment in breach of Regulation 14(3) of the Timeshare Regulations, this breach was not causative of Mr N's purchasing decision. The evidence suggested Mr N was motivated by holiday rights rather than investment potential, as evidenced by his regular holiday usage, his 2018 complaint focused on holiday bookings, and the Lender's contemporaneous statement that the purchase was for holidays. The ombudsman applied the Supreme Court's principle from Plevin that regulatory breaches do not automatically create unfairness under Section 140A, and that the impact on the complainant must be considered. The ombudsman also found no evidence of undisclosed commission arrangements that would render the relationship unfair.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website