Not upheld: unfair credit relationship under Section 140A CCA; connected lender liability under Section 75 CCA; alleged breach of Timeshare Regulations; undisclosed commission complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr and Mrs P purchased a Signature Collection timeshare membership for £13,650 in February 2019, financed by Shawbrook Bank Limited. They subsequently complained that the product was misrepresented as an investment, that the credit relationship was unfair due to undisclosed commission, and that the lender was liable under Section 75 CCA for the supplier's alleged breaches. The ombudsman found no actionable misrepresentation, as the membership had genuine holiday value and legitimate investment elements through a share in property proceeds. While acknowledging a possible breach of Timeshare Regulations prohibiting marketing as an investment, the ombudsman found this did not render the credit relationship unfair because evidence did not demonstrate financial gain motivated the purchase. The commission of £682.50 (4.6% of credit charge) was found to be low and insufficient to create unfairness under established legal principles. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found no factual and material misrepresentation regarding the product's value or investment potential, as the membership had genuine holiday value and the share in property proceeds was a legitimate investment element. While Regulation 14(3) of the Timeshare Regulations may have been breached by marketing as an investment, this did not render the credit relationship unfair because the evidence did not demonstrate that the prospect of financial gain was a motivating factor in Mr and Mrs P's decision to purchase. The commission of £682.50 was not high enough to render the relationship unfair, particularly when compared to the Supreme Court's guidance in Hopcraft, Johnson and Wrench, and Mr and Mrs P had sufficient information about the cost of credit to make an informed decision.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website