Not upheld: Section 75 Consumer Credit Act claim (misrepresentation/breach of contract); alleged unfair credit relationship due to undisclosed commission complaint against Clydesdale Financial Services Limited (trading as Barclays Partner Finance)

Decision detail

Summary

Mr B purchased a timeshare membership in December 2008 using a loan from Clydesdale Financial Services Limited (Barclays Partner Finance). In October 2019, over 11 years later, he complained that the membership was misrepresented and that the credit relationship was unfair due to undisclosed commission paid to the Supplier. The ombudsman rejected the Section 75 misrepresentation claim as time-barred under the Limitation Act 1980, since the six-year limitation period had expired before the complaint was made. The ombudsman also rejected the unfair credit relationship complaint, finding that the commission level of 10.68% of the charge for credit was not disproportionately high compared to the Supreme Court's benchmark cases, and that Mr B would have proceeded with the purchase regardless of commission disclosure.

The Ombudsman's reasoning

The ombudsman applied the Limitation Act 1980 to determine that Section 75 claims become time-barred six years from the date of the cause of action. Since the timeshare was purchased on 23 December 2008 and the complaint was not made until 3 October 2019 (over 11 years later), the claim was time-barred when presented to the Lender. It is reasonable for creditors to reject Section 75 claims that are time-barred under the Limitation Act. Regarding the commission, the ombudsman applied the Supreme Court's guidance from Hopcraft, Johnson and Wrench, finding that the commission level of 10.68% of the charge for credit was not disproportionately high (compared to 55% in Mr Johnson's case), there was no evidence of improper commercial ties between Lender and Supplier, and Mr B would likely have proceeded with the purchase regardless of commission disclosure given his desire for the membership and lack of alternative funding.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website