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

Decision detail

Summary

Mr B purchased a Fractional Club timeshare membership in July 2013 for £7,480 financed by the lender. The membership included a share in the net sale proceeds of an Allocated Property. In March 2017, Mr B complained that the supplier had misrepresented the product and that the lender had participated in an unfair credit relationship, citing potential breaches of Section 75 of the Consumer Credit Act 1974 and Regulation 14(3) of the Timeshare Regulations. The ombudsman found no actionable misrepresentation, as Mr B was not promised a specific sale date and there was insufficient evidence the membership was presented as the only exit route. Although the supplier may have breached Regulation 14(3) by marketing the membership as an investment, this was not determinative of unfairness because Mr B's primary motivation was the shorter membership term and fee savings, not investment returns. The ombudsman therefore rejected all grounds of complaint and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found no actionable misrepresentation because Mr B was not told the Allocated Property would be sold on a specific date, and there was insufficient evidence he was told membership was the only way to exit his existing membership. Regarding the investment element, while it was possible the supplier breached Regulation 14(3) by marketing membership as an investment, this was not determinative. The key finding was that Mr B's primary motivation was the shorter membership term and fee savings, not the investment prospect. The Letter of Complaint (made closer to the sale) was more reliable than a statement submitted 10 years later, particularly as it came after influential case law. Even if Regulation 14(3) was breached, Mr B would likely have proceeded with the purchase regardless. No commission was paid by the lender to the supplier, distinguishing this from the Supreme Court's Johnson case. Regulatory breaches do not automatically create unfairness under Section 140A; the impact must be considered holistically.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website