Not upheld: unfair credit relationship under Section 140A CCA; connected lender liability under Section 75 CCA; undisclosed commission; irresponsible lending; misrepresentation complaint against Shawbrook Bank Limited

Decision detail

Summary

Mrs I complained that Shawbrook Bank Limited acted unfairly by being party to an unfair credit relationship and by rejecting her Section 75 claim for misrepresentation regarding a non-fractional Vacation Club timeshare purchased on 14 August 2019 for £21,550. She alleged the supplier misrepresented the product as providing year-round accommodation, that the lending was irresponsible, and that commission payments were undisclosed. The ombudsman found no credible evidence of material misrepresentation, determined the lending was affordable, and concluded that the 5% commission was not disproportionately high and did not render the credit relationship unfair. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied Section 140A of the CCA and Section 75 of the CCA to assess fairness. For the Section 75 misrepresentation claim, insufficient evidence was provided to demonstrate a factual and material misrepresentation regarding year-round accommodation access. For the Section 140A unfair credit relationship claim, the ombudsman examined the supplier's sales practices, information provision, affordability, and commission arrangements. The ombudsman found that: (1) the lending was not unaffordable; (2) there was insufficient evidence of pressure or impaired choice; (3) any information gaps regarding ongoing costs were not material to the purchase decision; (4) the commission of 5% was not high enough to render the relationship unfair, particularly in contrast to the 55% commission in the Supreme Court's Johnson case; (5) the supplier did not owe a fiduciary duty to Mrs I; and (6) regulatory breaches do not automatically create unfairness under Section 140A.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website