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

Decision detail

Summary

Mrs G purchased a fractional club timeshare membership in May 2015 for £37,385, financing £10,475 through Shawbrook Bank Limited. She complained in August 2017 that the supplier misrepresented the product as an investment and that the lender was party to an unfair credit relationship. The ombudsman found no actionable misrepresentation under section 75 of the CCA, as statements about investment appreciation were opinions and representations about guaranteed end dates reflected the actual contract. Under section 140A, even if the supplier breached Regulation 14(3) by marketing as an investment, the ombudsman found this was not material to Mrs G's decision because evidence showed her purchase was motivated by the guarantee of property access (a new benefit not previously available), not investment prospects. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a multi-layered analysis. First, under section 75 of the CCA, no actionable misrepresentation was found because statements about investment appreciation were opinions honestly held, and representations about guaranteed end dates reflected the actual contract terms. Second, no breach of contract was established as availability limitations were disclosed and the property sale was a future uncertain event. Third, under section 140A, even if the supplier breached Regulation 14(3) by marketing as an investment, this was not material to Mrs G's decision because the evidence showed her purchase was motivated by the guarantee of access to the allocated property (a new benefit not previously available), not by investment prospects. The ombudsman noted Mrs G's original complaint letter made no mention of investment, and her own responses to questions about misrepresentation did not reference this purchase. Fourth, regarding commission, the ombudsman found no undisclosed commercial tie, no commission was actually paid by the lender, and the Hopcraft principles did not apply given the factual differences.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website