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 complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr H complained that Shawbrook Bank Limited acted unfairly by being party to an unfair credit relationship and by refusing to pay Section 75 claims relating to a timeshare purchase financed by a loan in July 2014. The timeshare (Balkan Jewel membership) included both holiday rights and a share in property proceeds (an investment element). Mr H raised his complaints in October 2022, over eight years after the purchase. The ombudsman found the misrepresentation claim time-barred under the Limitation Act 1980 and concluded there was insufficient evidence of breach of contract. Regarding the alleged breach of Regulation 14(3) (prohibition on marketing timeshares as investments), while the ombudsman acknowledged this was possible, no credible evidence was provided that the investment prospect motivated the purchase, and therefore the credit relationship was not unfair under Section 140A. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Mr H's Section 75 misrepresentation claim was time-barred as it was made more than six years after the date of sale (10 July 2014 to 24 October 2022). While breach of contract claims within six years could be considered, insufficient evidence was provided about when specific breaches occurred. Regarding Section 140A unfairness, the ombudsman considered whether the Supplier breached Regulation 14(3) by marketing the membership as an investment. Although this was possible, the ombudsman found no credible evidence that the prospect of financial gain was a motivating factor in Mr and Mrs H's purchase decision, as no direct testimony was provided. The ombudsman concluded that even if a regulatory breach occurred, it did not render the credit relationship unfair because the purchase was not motivated by investment considerations.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website