Not upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; potential breach of Timeshare Regulations Regulation 14(3); inadequate provision of information regarding ongoing costs complaint against First Holiday Finance Ltd

Decision detail

Summary

Mr and Mrs D complained that First Holiday Finance Ltd was party to an unfair credit relationship when it financed their purchase of Fractional Club membership (a timeshare product) for £19,699 in July 2012. They alleged the Supplier breached Regulation 14(3) of the Timeshare Regulations by marketing the membership as an investment and failed to provide adequate information about ongoing costs. The ombudsman found that while a breach of Regulation 14(3) was possible, Mr and Mrs D's own statements indicated they understood the 'return' as merely recovering their initial outlay rather than achieving a profit, and they would have proceeded with the purchase regardless. Consequently, the ombudsman concluded the credit relationship was not unfair and rejected the complaint.

The Ombudsman's reasoning

The ombudsman found that while the Supplier may have breached Regulation 14(3) of the Timeshare Regulations by marketing the membership as an investment, this did not automatically render the credit relationship unfair. The key issue was whether Mr and Mrs D's decision to purchase was motivated by the prospect of financial gain/profit. The ombudsman concluded from their own statements that they understood the 'return' as merely recovering their initial outlay, not making a profit. Therefore, even if a regulatory breach occurred, it was not material to their decision to proceed, and the credit relationship was not unfair.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website