Not upheld: unfair credit relationship under Section 140A CCA; alleged misrepresentation of timeshare as investment; breach of Timeshare Regulations Regulation 14(3); undisclosed commission; Section 75 CCA claim complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr T purchased a Fractional Club timeshare membership in August 2018 for £17,888, financed by a £19,708 loan from Shawbrook Bank Limited. Nearly seven years later, in April 2025, Mr T complained that the Lender acted unfairly by being party to an unfair credit relationship under Section 140A of the Consumer Credit Act 1974 and by rejecting his Section 75 claim. Mr T alleged the timeshare was misrepresented as an investment, that he was promised returns based on property appreciation, and that he was misled about holiday access. He also complained about undisclosed commission and alleged the Supplier breached Regulation 14(3) of the Timeshare Regulations by marketing the product as an investment. The ombudsman found no actionable misrepresentation, rejected the Section 140A unfairness claim despite acknowledging a possible regulatory breach, and determined the 10% commission was not disproportionate. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A unfairness, rejecting technical or narrow interpretations. While acknowledging that a possible breach of Regulation 14(3) existed (marketing as an investment), the ombudsman found this did not automatically render the credit relationship unfair. The key finding was that Mr T was not motivated by prospect of financial gain—his statement describing property appreciation was consistent with the asset-backed nature of the product rather than evidence of investment marketing. The commission of 10% was not 'so high' as to be unfair (contrasting with the 55% in Johnson's case), and Mr T would have proceeded with the loan regardless of disclosure given his desire for the membership and lack of alternative funding. The ombudsman rejected claims of misrepresentation regarding investment value, holiday access, and property appreciation as either not proven or not constituting actionable misrepresentation. Regulatory breaches do not automatically create unfairness; consequences must be considered in the round.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website