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

Decision detail

Summary

Mr and Mrs L purchased a Fractional Club timeshare membership in March 2018 for £15,465, financed by a credit agreement with First Holiday Finance Ltd. Over six years later, in June 2024, they complained that the Lender acted unfairly by rejecting their Section 75 claim for alleged misrepresentations and by being party to an unfair credit relationship under Section 140A of the Consumer Credit Act 1974. The ombudsman rejected the complaint on all grounds: the Section 75 claim was time-barred under the Limitation Act, and the credit relationship was not unfair because, even if the Supplier had breached the Timeshare Regulations by marketing the product as an investment, Mr and Mrs L's purchase was motivated by resolving booking difficulties with a previous membership rather than by the prospect of financial gain. The ombudsman found no evidence of pressure, misrepresentation, or unfair lending practices that would render the relationship unfair.

The Ombudsman's reasoning

The ombudsman applied a multi-layered analysis. First, regarding Section 75, the claim was time-barred under the Limitation Act as more than six years had passed since the time of sale (4 March 2018) before the claim was notified (4 June 2024). Second, regarding Section 140A, the ombudsman examined whether the credit relationship was unfair by considering: (1) the Supplier's commercial conduct and sales practices; (2) information provision; (3) evidence of what was said at sale; (4) inherent probabilities; and (5) any existing unfairness. The ombudsman found that even if the Supplier had breached Regulation 14(3) by marketing the timeshare as an investment, this would not have rendered the relationship unfair because the evidence showed Mr and Mrs L's purchase was motivated primarily by resolving booking difficulties with their previous membership, not by the prospect of financial gain. The ombudsman rejected arguments about pressure, affordability, misrepresentation, and commission arrangements, finding none materially affected the fairness of the relationship. The ombudsman emphasised that regulatory breaches do not automatically create unfairness under Section 140A; the impact on the complainant must be considered holistically.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website