Not upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; Section 75 claim for misrepresentation; potential breach of Regulation 14(3) of the Timeshare Regulations; undisclosed commission arrangements complaint against Tandem Bank Limited

Decision detail

Summary

Ms S purchased Fractional Club timeshare membership for £14,000 in September 2018, financed by a loan from Tandem Bank Limited. In December 2024, she complained that the Lender acted unfairly by being party to an unfair credit relationship and by rejecting her Section 75 claim for misrepresentation. Ms S alleged the product was marketed as an investment in breach of Regulation 14(3) of the Timeshare Regulations and that she had disclosed neurological conditions that made her susceptible to high-pressure sales tactics. The ombudsman rejected the Section 75 claim as time-barred (raised more than six years after purchase) and found the credit relationship was not unfair under Section 140A, concluding that Ms S's own evidence did not demonstrate financial gain was a motivating factor in her purchase decision, even if a regulatory breach had occurred.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A, considering whether regulatory breaches automatically create unfairness (they do not). The key finding was that Ms S's witness statement, though brief and lacking detail, did not persuade the ombudsman that financial gain was a motivating factor in her purchase decision. Even if the Supplier breached Regulation 14(3) by marketing the product as an investment, this breach was not material to Ms S's decision. The ombudsman distinguished the case from Hopcraft, Johnson and Wrench because no commission was actually paid at the time of sale, and there was no evidence of a fiduciary duty owed by the Supplier to Ms S. The Section 75 claim was rejected as time-barred under the Limitation Act 1980, as more than six years had passed since the time of sale.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website