Upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; breach of Regulation 14(3) of the Timeshare Regulations (marketing/selling timeshare as investment) complaint against Shawbrook Bank Limited
Financial Ombudsman decision DRN-6265299 of 2026-05-01T00:00:00+00:00. unfair credit relationship under Section 140A of the Consumer Credit Act 1974; breach of Regulation 14(3) of the Timeshare Regulations (marketing/selling timeshare as investment) complaint against Shawbrook Bank Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6265299 |
|---|---|
| Decision date | 2026-05-01T00:00:00+00:00 |
| Firm | Shawbrook Bank Limited |
| Product | credit agreement (loan) for timeshare purchase |
| Claim type | unfair credit relationship under Section 140A of the Consumer Credit Act 1974; breach of Regulation 14(3) of the Timeshare Regulations (marketing/selling timeshare as investment) |
| Outcome | Upheld |
| Remedy | The lender must: (1) Refund all repayments made under the Credit Agreement, including sums paid to settle the debt, and cancel any outstanding balance; (2) Refund the difference between annual management charges paid for Membership 3 and what would have been paid for Memberships 1 and 2; (3) Deduct the value of promotional giveaways used and the market value of holidays taken using Membership 3 (proportionately, only for additional fractional points beyond what they would have had); (4) Add simple interest at 8% per annum to net repayments from the date each was made until settlement; (5) Remove any adverse credit file information recorded within six years of the decision; (6) If the membership is still in place, indemnify Mr and Mrs C against all ongoing liabilities if they assign or hold the Allocated Property interest in trust for the lender. |
Summary
Mr and Mrs C purchased a Balkan Jewel timeshare membership for £5,600 on 30 September 2015, financed by a credit agreement with Shawbrook Bank Limited. The asset-backed membership gave them a share in the net sale proceeds of a property. Mr and Mrs C complained that the supplier marketed and sold the membership as an investment in breach of Regulation 14(3) of the Timeshare Regulations, which rendered their credit relationship with the lender unfair under Section 140A of the Consumer Credit Act 1974. An investigator rejected the complaint, but the ombudsman upheld it after finding the supplier's sales practices, training materials, and presentation slides indicated the membership was sold as an investment offering financial returns. The ombudsman found Mr and Mrs C's testimony credible and concluded the prospect of financial gain was material to their purchasing decision. The lender was directed to refund all credit agreement repayments, refund management charge differences, deduct holiday usage and promotional benefits, add 8% simple interest, remove adverse credit file information, and indemnify Mr and Mrs C against ongoing liabilities.
The Ombudsman's reasoning
The ombudsman found that the supplier breached Regulation 14(3) of the Timeshare Regulations by marketing and selling the Balkan Jewel membership as an investment. The regulation prohibits marketing or selling a timeshare contract as an investment if it would be a regulated contract. Although the contemporaneous paperwork contained disclaimers, the ombudsman found that weighing what happened in practice requires looking beyond written documentation. The supplier's training materials, presentation slides, and the nature of the product (offering a share in property sale proceeds) indicated the membership was likely sold as an investment. The ombudsman found Mr and Mrs C's testimony credible and consistent throughout their complaint, stating they were told the purchase would add to their existing investment and provide a financial return. The ombudsman concluded that the prospect of financial gain was a material and motivating factor in their decision to purchase, and that they would not have proceeded without this representation. This breach rendered the credit relationship unfair under Section 140A of the Consumer Credit Act 1974.
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