Not upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; connected lender liability under Section 75 of the Consumer Credit Act 1974; alleged breach of Regulation 14(3) of the Timeshare Regulations; alleged misrepresentation; undisclosed commission arrangements complaint against Clydesdale Financial Services Limited trading as Barclays Partner Finance

Decision detail

Summary

Mrs A complained that Clydesdale Financial Services Limited (trading as Barclays Partner Finance) acted unfairly by being party to an unfair credit relationship and by rejecting her Section 75 claim for misrepresentation relating to the purchase of Fractional Club timeshare membership financed by a £23,004 credit agreement in February 2017. She alleged the supplier misrepresented the membership as providing secured holiday accommodation and as an investment, breached Regulation 14(3) of the Timeshare Regulations by marketing it as an investment, failed to provide adequate information, and that undisclosed commission arrangements rendered the relationship unfair. The ombudsman found the Section 75 claim time-barred under the six-year limitation period and found no factual misrepresentation, as Mrs A provided no supporting testimony. Although the supplier may have breached Regulation 14(3), the ombudsman found this did not render the credit relationship unfair because Mrs A's own evidence showed the investment element did not motivate her purchase and she would have proceeded regardless. The ombudsman also found the 1.7% commission was not high and would not have deterred Mrs A from taking the loan. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the six-year limitation period under the Limitation Act 1980 to the Section 75 misrepresentation claim, finding it time-barred as it was first raised in May 2024, more than six years after the cause of action accrued on 12 February 2017. Even if not time-barred, the ombudsman found no factual and material misrepresentation by the supplier, as Mrs A provided no testimony supporting the alleged misrepresentations and no other evidence corroborated them. Regarding the Section 140A unfair credit relationship claim, the ombudsman found that while the supplier may have breached Regulation 14(3) of the Timeshare Regulations by marketing the membership as an investment, this did not render the credit relationship unfair because Mrs A's own testimony showed she was not motivated by the investment element and would have made the same purchasing decision regardless. The ombudsman applied the principles from Hopcraft, Johnson and Wrench, noting that the commission of 1.7% was not high and did not create a sufficiently extreme inequality of knowledge. The ombudsman rejected arguments about inadequate information disclosure and unfair contract terms, finding no evidence that Mrs A would have acted differently had more information been provided.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website