Not upheld: alleged unfair credit relationship under Section 140A CCA; alleged breach of Regulation 14(3) of the Timeshare Regulations; alleged mis-selling of timeshare memberships as investments complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr and Mrs S complained that Shawbrook Bank participated in unfair credit relationships by financing two timeshare memberships (2012 and 2013) that were allegedly sold as investments in breach of Regulation 14(3) of the Timeshare Regulations. The ombudsman found that while the Supplier's training material suggested sales representatives could position memberships as investments, Mr and Mrs S's own evidence demonstrated their primary motivation was holiday flexibility and accommodation. For the 2012 purchase, they made no mention of investment motivation. For the 2013 upgrade, although they recalled an investment element, the ombudsman found this testimony unreliable given the 12-year delay and external influences, and noted their actual dissatisfaction related to availability issues, not investment returns. The ombudsman concluded that even if a regulatory breach occurred, it was not material to their purchasing decisions, and therefore the credit relationships were not unfair under Section 140A.

The Ombudsman's reasoning

The ombudsman applied the Plevin principle that regulatory breaches do not automatically create unfairness under Section 140A; such breaches must be considered in the round. The key issue was whether any breach of Regulation 14(3) was causative of Mr and Mrs S entering into the credit relationships. The ombudsman found that Mr and Mrs S's primary motivation for both purchases was holiday benefits and accommodation, not investment prospects. For the 2012 sale, they made no mention of investment motivation. For the 2013 sale, although they recalled an investment element, the ombudsman found their testimony unreliable given the 12-year delay, external influences (judicial review publicity, firm's response letter), and the fact that their dissatisfaction stemmed from availability issues, not investment returns. The additional 38% increase in holiday points and desire to access a specific resort were the material drivers. Therefore, even if a breach occurred, it would not have been material to their purchasing decisions.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website