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

Decision detail

Summary

Mr M purchased a Fractional Club timeshare membership in March 2018 for £12,789 financed through a credit agreement with Clydesdale Financial Services Limited. In March 2025, over six years later, Mr M complained that the lender acted unfairly by being party to an unfair credit relationship and by rejecting Section 75 claims against the supplier for misrepresentation and breach of contract. Mr M alleged the supplier marketed the timeshare as an investment in breach of Regulation 14(3) of the Timeshare Regulations and failed to disclose commission arrangements. The ombudsman rejected all grounds: the Section 75 misrepresentation claim was time-barred under the Limitation Act 1980; no breach of contract occurred as holiday availability was contractually subject to demand; and even if regulatory breaches occurred, they did not render the credit relationship unfair because Mr M's purchase motivation was improved holiday flexibility rather than financial gain, and no commission was actually paid by the lender to the supplier.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A claims, finding that regulatory breaches do not automatically render a credit relationship unfair. The section 75 misrepresentation claim was time-barred under the Limitation Act 1980 (six years from time of sale). For the breach of contract claim, the ombudsman found insufficient evidence that the supplier breached the purchase agreement regarding holiday availability, as the terms explicitly stated availability was subject to demand. Regarding the alleged breach of Regulation 14(3) of the Timeshare Regulations (marketing as an investment), the ombudsman found that even if such a breach occurred, Mr M's primary motivation for purchase was increased booking flexibility and improved holiday rights, not financial gain. The ombudsman distinguished this case from the Supreme Court's Hopcraft, Johnson and Wrench decision on commission, noting that no commission was paid by the lender to the supplier at the time of sale, and the supplier was not acting as a fiduciary agent for Mr M.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website