Not upheld: Goods and services under S75 complaint against First Holiday Finance Ltd

Decision detail

Summary

Mr B and Mrs B purchased timeshare fractional club membership in 2014 for £10,194, financed by the lender. They complained that the lender acted unfairly by being party to an unfair credit relationship and by rejecting section 75 claims based on alleged misrepresentation and breach of contract by the supplier. The ombudsman found no actionable misrepresentation because statements that the membership had substance and could be sold at profit were factually true. Although the ombudsman acknowledged the supplier may have breached the Timeshare Regulations by marketing the product as an investment, this did not render the credit relationship unfair because evidence showed the consumers were primarily motivated by holiday access, not investment returns. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found no actionable misrepresentation under section 75 because the statements that the fractional club membership had substance and could be sold at profit were factually true. Regarding section 140A, while the ombudsman acknowledged it was possible the supplier breached Regulation 14(3) by marketing the product as an investment, this did not render the credit relationship unfair because the evidence showed Mr B and Mrs B were primarily motivated by holiday access, not investment potential. The ombudsman gave little weight to their later statement due to the 10-year delay and apparent influence from the Shawbrook & BPF v FOS judgment. The ombudsman also found no unfairness arising from commission arrangements or non-disclosure of the group relationship, distinguishing the case from the Supreme Court's Johnson decision on the basis that no commission was paid to the supplier and the lender offered competitive terms.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website