Not upheld: unfair credit relationship under section 140A CCA; connected lender liability under section 75 CCA; irresponsible lending; alleged misrepresentation and breach of timeshare regulations; undisclosed commission complaint against Clydesdale Financial Services Limited trading as Barclays Partner Finance

Decision detail

Summary

Mr C complained that BPF acted unfairly by entering into an unfair credit relationship and refusing to pay a section 75 claim relating to his 2015 purchase of timeshare membership financed by a £12,521 loan. The complaint alleged misrepresentation, pressure selling, unfair contract terms, irresponsible lending, and undisclosed commission. The ombudsman found section 75 claims were time-barred under the Limitation Act 1980 (over eight years after the cause of action accrued). For section 140A unfair credit relationship claims, while some regulatory breaches were possible (marketing as investment, commission non-disclosure), the ombudsman found these did not render the relationship unfair when considered in context, as Mr C's own evidence did not show the alleged misrepresentations affected his decision, the lending was affordable given his maintained payments and membership use, and the commission level was modest. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the Plevin test, which establishes that regulatory breaches do not automatically create unfairness under section 140A; instead, all relevant facts must be considered holistically. On section 75 claims, the six-year limitation period under the Limitation Act 1980 provided BPF with a complete defence since the cause of action accrued in September 2015 and the claim was made over eight years later. Regarding section 140A, the ombudsman found: (1) key information including fees and interest rates were provided in writing as required; (2) no evidence that unfair contract terms were actually operated against Mr C; (3) the liquidation of C's sales companies did not prevent contract fulfillment; (4) the lending was not shown to be unaffordable given Mr C maintained payments and used the membership; (5) while Regulation 14(3) of the Timeshare Regulations may have been breached by marketing membership as an investment, Mr C's own evidence did not establish this was material to his purchase decision; and (6) the commission of 2.31% of the charge for credit was not disproportionate and, even if undisclosed, would not have deterred Mr C from obtaining the loan he needed for a purchase he wanted.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website