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

Decision detail

Summary

Mr and Mrs K purchased Fractional Club timeshare membership in May 2016 for £11,862, financed by a loan from FHF. In March 2024, they complained that FHF was party to an unfair credit relationship and that FHF should pay a Section 75 claim against the Supplier for alleged misrepresentations. The ombudsman rejected both claims. The Section 75 claim was time-barred under the Limitation Act 1980 as it was raised more than 6 years after the purchase. For the Section 140A unfair credit relationship claim, while the ombudsman accepted the Supplier may have breached Regulation 14(3) by marketing the membership as an investment, the ombudsman found this was not material to Mr and Mrs K's decision to purchase, as they were primarily motivated by holiday options and had previously held a trial membership. The ombudsman found no other basis for upholding the complaint.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A, considering whether regulatory breaches automatically created unfairness. While accepting that the Supplier may have breached Regulation 14(3) by marketing the membership as an investment, the ombudsman found this was not material to Mr and Mrs K's decision to purchase, as they were primarily motivated by holiday options and had previously held a trial membership. The ombudsman rejected the Section 75 claim as time-barred (more than 6 years after the cause of action) and found no actionable misrepresentation on the merits. The ombudsman distinguished the case from Hopcraft, Johnson and Wrench, noting FHF paid no commission and the Supplier was not acting as an agent of Mr and Mrs K.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website