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

Decision detail

Summary

Mr and Mrs W purchased fractional timeshare membership in May 2017 financed by a loan from Shawbrook Bank Limited. Nearly eight years later, they complained that the lender was party to an unfair credit relationship and that the lender should have upheld their Section 75 claim against the supplier. The complaints centred on alleged misrepresentations about investment value and property appreciation, a possible breach of the Timeshare Regulations prohibition on marketing timeshares as investments, undisclosed commission arrangements, and unfair contract terms. The ombudsman found no material misrepresentation, concluded that even if the supplier breached the investment prohibition, this was not a motivating factor in the purchase decision, and determined that the 5% commission was not so high or concealed as to render the relationship unfair. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found no factual and material misrepresentation by the supplier regarding investment claims, holiday access, or property value appreciation. While acknowledging it was possible the supplier breached Regulation 14(3) by marketing the product as an investment, the ombudsman concluded this was not material to the decision because Mr and Mrs W's own evidence indicated the investment element was mentioned as an aside rather than a motivating factor. The commission arrangement, at 5% of the amount borrowed, was not so high as to render the relationship unfair, particularly given the consumers wanted the product and had no alternative means to pay. The ombudsman applied the principles from Hopcraft, Johnson and Wrench, distinguishing the case on the basis that the commission was low, there was no evidence of concealment of the commercial tie, and the consumers would have proceeded with the loan regardless of disclosure.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website