Not upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; alleged breach of Timeshare Regulations 14(3); irresponsible lending; undue pressure; unfair contract terms complaint against First Holiday Finance Ltd

Decision detail

Summary

Mr and Mrs M complained that First Holiday Finance Ltd was party to an unfair credit relationship when it lent them £6,975 to finance a Fractional Club timeshare purchase in February 2012. They alleged the Supplier breached Timeshare Regulations by marketing the membership as an investment, that the lending was irresponsible, that they were unduly pressured, and that unfair contract terms applied. The ombudsman found no unfair credit relationship because Mr and Mrs M's own testimony emphasised holiday usage rather than financial gain, meaning any regulatory breach was not material to their decision; there was no evidence the loan was unaffordable; they were not unduly pressured (having a 14-day cooling-off period they did not use and making a joint decision); and no unfair terms were operated against them in practice. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied Section 140A of the CCA and considered whether the credit relationship was unfair by examining the Supplier's conduct, information provision, commission arrangements, and evidence of what was said at the Time of Sale. The ombudsman found that even if the Supplier breached Regulation 14(3) of the Timeshare Regulations by marketing the membership as an investment, this was not causative of the purchase decision because Mr and Mrs M's own testimony emphasised holiday usage rather than financial gain. The ombudsman rejected arguments about irresponsible lending (finding no evidence the loan was unaffordable), undue pressure (noting the 14-day cooling-off period was not used and Mrs M was present as a joint purchaser), and unfair contract terms (finding no evidence they were operated unfairly in practice). The ombudsman applied the principle from Plevin that regulatory breaches do not automatically create unfairness and must be considered in the round with all circumstances.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website