Not upheld: unfair credit relationship (section 140A CCA), section 75 claim, alleged breach of Timeshare Regulations Regulation 14(3), undisclosed commission complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr B purchased a Fractional Club timeshare membership in December 2014 for £8,750 financed by Shawbrook Bank. He later complained that the supplier misrepresented the product, that it was marketed as an investment in breach of Timeshare Regulations, that the lender made irresponsible lending decisions, and that commission was undisclosed. The ombudsman rejected all grounds, finding that Mr B's primary motivation was the shorter 15-year term (versus his existing longer membership) and associated management fee savings, not the investment element. Even if the supplier breached the prohibition on marketing timeshares as investments, this would not have changed Mr B's decision. The commission of £87.50 was too low to render the credit relationship unfair. The ombudsman applied section 140A principles requiring consideration of whether breaches materially affected the debtor's decision, and found they did not.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to section 140A, finding that regulatory breaches do not automatically create unfairness. The key finding was that Mr B's primary motivation for purchase was the shorter membership term and associated fee savings, not the investment element. Even if the supplier breached Regulation 14(3) by marketing as an investment, this would not have changed Mr B's decision. The commission of £87.50 was too low to render the relationship unfair, particularly given Mr B wanted the product and had no alternative means to pay. The ombudsman rejected the later statement about investment motivation as unreliable, given its timing (9 years post-sale, 6 years post-complaint) and potential influence from the Shawbrook & BPF v FOS judgment.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website