Not upheld: unfair credit relationship under Section 140A CCA; connected lender liability under Section 75 CCA; alleged breach of Timeshare Regulations; undisclosed commission complaint against First Holiday Finance Ltd

Decision detail

Summary

Mr and Mrs B complained that First Holiday Finance Ltd acted unfairly by being party to an unfair credit relationship and by rejecting Section 75 claims regarding their December 2014 purchase of Signature Collection timeshare membership financed through a £9,453 credit agreement. They alleged the supplier misrepresented the product as an investment with a guaranteed end date, breached Timeshare Regulations, and that undisclosed commission arrangements rendered the credit relationship unfair. The ombudsman found no actionable misrepresentation, concluded that even if the supplier breached Regulation 14(3) by marketing as an investment, this was not material to Mr and Mrs B's decision to purchase (which was primarily motivated by holiday rights), and found no unfairness from commission arrangements as no commission was paid at the time of sale. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found no actionable misrepresentation regarding the guaranteed end date or investment nature of the product. While acknowledging the possibility that the supplier may have breached Regulation 14(3) by marketing the membership as an investment, the ombudsman concluded this was not material to Mr and Mrs B's decision to purchase. The evidence showed their purchasing decisions were primarily motivated by holiday rights rather than investment returns, evidenced by their subsequent trade-in of the investment-backed product for one with only holiday rights. The ombudsman applied the principles from Hopcraft, Johnson and Wrench regarding commission disclosure but found no unfairness as no commission was paid at the time of sale. The lending was found to be affordable, and there was insufficient evidence of pressure or impaired choice.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website