Not upheld: unfair credit relationship; potential mis-selling of timeshare as investment; potential breach of Timeshare Regulations; affordability concerns complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr and Mrs H complained that their credit relationship with Shawbrook Bank Limited was unfair under section 140A of the Consumer Credit Act 1974 in relation to a Fractional Club timeshare membership purchased in July 2017 for £5,499, financed by a £16,946 loan. They alleged the Supplier marketed the membership as an investment in breach of Timeshare Regulations, that they were pressured into the purchase, that they could not afford the loan (being in debt management plans), and that they lacked sufficient information to make an informed decision. The ombudsman acknowledged the possibility of a regulatory breach but found that this did not automatically render the credit relationship unfair. The ombudsman found the evidence supporting the complainants' recollections (a questionnaire completed years later with leading questions) insufficiently credible and lacking corroboration. The ombudsman concluded there was insufficient evidence that financial gain was a motivating factor, that the complainants were pressured, or that they could not afford the loan, and therefore did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman applied a multi-factor test under section 140A, considering the Supplier's commercial conduct, information provided, commission arrangements, evidence of what was said at sale, and the circumstances of Mr and Mrs H. While acknowledging that the Supplier may have breached Regulation 14(3) of the Timeshare Regulations by marketing the membership as an investment, the ombudsman found that a regulatory breach does not automatically render a credit relationship unfair. The ombudsman was not persuaded that the prospect of financial gain was an important and motivating factor for the purchase, partly because the evidence (a questionnaire completed years later with leading questions) lacked sufficient weight and corroboration. The ombudsman found insufficient evidence that Mr and Mrs H were pressured into the purchase or that they could not afford the loan. Even if there were information failings or unfair contract terms, the ombudsman found no evidence that these led to a different purchasing decision or caused detriment.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website