Not upheld: Section 75 claim for misrepresentation and breach of contract; Section 140A unfair credit relationship; undisclosed commission complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr and Mrs D purchased Fractional Club timeshare membership on 30 May 2013 for £11,520, financed by a loan from Shawbrook Bank Limited. They raised complaints in March 2018 alleging misrepresentation by the supplier regarding exit routes, guaranteed exit dates, exclusive membership, and holiday use, as well as claiming the credit relationship was unfair under Section 140A of the Consumer Credit Act 1974. The lender rejected the complaint, and the matter was referred to the Financial Ombudsman Service. The ombudsman found insufficient persuasive evidence for the misrepresentation claims, the breach of contract claim was premature as it concerned a future uncertain event, and the credit relationship was not unfair as the commission was proportionate, Mr and Mrs D had signed declarations understanding the product was not an investment, and the late-emerging witness statement alleging investment marketing lacked credibility. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found insufficient persuasive evidence for the alleged misrepresentations regarding the only exit route, guaranteed exit date, exclusive club status, and holiday use. For the breach of contract claim, any failure to sell the property would be a future uncertain event and the contract did not guarantee a specific sale date. Regarding Section 140A unfairness, the ombudsman considered the commission was small (8% of loan), Mr and Mrs D had signed a declaration understanding the product was not an investment, the witness statement alleging investment marketing had questionable provenance and emerged very late, and the credit relationship was not rendered unfair by the timing of agreements, employment status of sales representatives, or commission arrangements which were proportionate and did not create extreme inequality of knowledge.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website