Not upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; rejected Section 75 claim; alleged breach of Timeshare Regulations 2010 Regulation 14(3); undisclosed commission complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr L complained that Shawbrook Bank Limited acted unfairly by being party to an unfair credit relationship and by rejecting his Section 75 claim regarding alleged misrepresentations by the timeshare supplier. Mr L and Ms P purchased Fractional Club timeshare membership in September 2015 for £20,232, financed through a £32,924 credit agreement. The complaint was made in April 2025, nearly 10 years later. The ombudsman found the Section 75 claim time-barred under the Limitation Act 1980 and rejected the Section 140A unfair relationship claim, concluding that even if the Supplier breached regulations prohibiting investment marketing, this was not material to Mr L's purchase decision, which was primarily motivated by holiday accommodation. The ombudsman also noted the Lender paid no commission to the Supplier, distinguishing the case from recent Supreme Court precedent.

The Ombudsman's reasoning

The ombudsman found that the Section 75 claim was time-barred under the Limitation Act 1980, as it was made nearly 10 years after the time of sale rather than within 6 years. Regarding the Section 140A unfair relationship claim, the ombudsman considered whether the Supplier breached Regulation 14(3) by marketing the timeshare as an investment, but concluded that even if such a breach occurred, it was not material to Mr L's decision to purchase. The ombudsman gave limited weight to Mr L's later statement that the purchase was purely for investment purposes, finding it inconsistent with his earlier testimony that his biggest motivation was a guaranteed holiday apartment. The ombudsman also found that the Lender paid no commission to the Supplier at the time of sale, distinguishing this case from the Supreme Court's decision in Hopcraft, Johnson and Wrench. Regulatory breaches do not automatically render a credit relationship unfair; their consequences must be considered in the round.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website