Not upheld: connected lender liability (Section 75 CCA) and unfair credit relationship (Section 140A CCA) - timeshare financing complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr and Mrs B purchased fractional timeshare membership financed by a £16,000 loan from Shawbrook Bank Limited in September 2015. They complained in May 2019 that the supplier had misrepresented the membership as an investment and promised a refund from Spanish court proceedings that never materialised as described. They also claimed the lender was party to an unfair credit relationship. The ombudsman found that the allegations of misrepresentation lacked sufficient weight, particularly given the three-and-a-half-year delay before raising concerns and the failure to use the 14-day cooling-off period. The ombudsman concluded the credit relationship was not unfair, as the lending was affordable and the primary motivation for purchase was escaping an existing timeshare rather than investment returns. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Mr and Mrs B's allegations of misrepresentation lacked sufficient weight because: (1) describing the membership as an investment was not untrue given the asset-backed nature; (2) estimates about court timelines and refund amounts were not guarantees; (3) Mr and Mrs B did not follow up on the refund for three and a half years, inconsistent with relying on such promises; and (4) their primary motivation was escaping their existing timeshare, not the investment element. Regarding the unfair credit relationship claim, the ombudsman found the lending was affordable, no unfair contract terms were operated against them, they had a 14-day cooling-off period they did not use, and any regulatory breaches by the supplier did not render the credit relationship unfair given the circumstances and impact on the complainants.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website