Upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; breach of Regulation 14(3) of the Timeshare, Holiday Products, Resale and Exchange Contracts Regulations 2010 complaint against Shawbrook Bank Limited
Financial Ombudsman decision DRN-6240965 of 2026-04-01T00:00:00+00:00. unfair credit relationship under Section 140A of the Consumer Credit Act 1974; breach of Regulation 14(3) of the Timeshare, Holiday Products, Resale and Exchange Contracts Regulations 2010 complaint against Shawbrook Bank Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6240965 |
|---|---|
| Decision date | 2026-04-01T00:00:00+00:00 |
| Firm | Shawbrook Bank Limited |
| Product | timeshare with associated credit agreement |
| Claim type | unfair credit relationship under Section 140A of the Consumer Credit Act 1974; breach of Regulation 14(3) of the Timeshare, Holiday Products, Resale and Exchange Contracts Regulations 2010 |
| Outcome | Upheld |
| Remedy | The Lender must: (1) refund all repayments under the Credit Agreement and the deposit paid; (2) refund the difference between Fractional Membership annual management charges and what European Collection charges would have been; (3) deduct the value of promotional giveaways used and the market value of holidays taken using excess Fractional Points beyond European Collection entitlement; (4) add simple interest at 8% per annum to net repayments from the date each was made until settlement; (5) remove adverse credit file information recorded within six years of the decision; (6) indemnify Mr and Mrs J against ongoing Fractional Membership liabilities if membership is still in place, provided they assign or hold the Allocated Property interest for the Lender. |
Summary
Mr and Mrs J purchased Fractional Membership in a timeshare property on 13 February 2013 for £8,070, financed through a Credit Agreement with Shawbrook Bank Limited. They complained that the Supplier breached Regulation 14(3) of the Timeshare Regulations by marketing the product as an investment, and that this breach rendered their credit relationship with the Lender unfair under Section 140A of the Consumer Credit Act 1974. The Ombudsman upheld the complaint, finding that Fractional Membership provided no additional holiday benefits beyond Mr and Mrs J's existing European Collection membership, so the only rational motivation for purchase was the prospect of financial return on the Allocated Property—which the Supplier had explicitly promoted as an investment opportunity. The Ombudsman ordered the Lender to refund all payments, management charge differences, add interest, remove adverse credit information, and indemnify Mr and Mrs J against ongoing liabilities.
The Ombudsman's reasoning
The Ombudsman found that Regulation 14(3) of the Timeshare Regulations prohibits marketing or selling a timeshare contract as an investment. Although Fractional Membership contained an investment element (the share in the Allocated Property), the prohibition applies to how the product was marketed and sold, not merely to the existence of an investment component. Given that Fractional Membership provided no additional holiday entitlement beyond the existing European Collection membership, the only rational reason Mr and Mrs J would have purchased it was if the Supplier promoted the potential financial return on the Allocated Property. Mrs J's statement, corroborated by scheduling evidence, indicated the Supplier explicitly presented this as an investment opportunity with guaranteed profit. This breach of Regulation 14(3) rendered the credit relationship unfair under Section 140A of the CCA because it was the prospect of financial gain that motivated Mr and Mrs J to enter into both the Purchase Agreement and Credit Agreement.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Shawbrook Bank Limited, all decisions | 2,486 | 17% |
Source
Read the original decision on the Financial Ombudsman Service website