Not upheld: unfair credit relationship under Section 140A CCA; Section 75 claim; alleged breach of Timeshare Regulations; undisclosed commission complaint against Clydesdale Financial Services Limited trading as Barclays Partner Finance (BPF)

Decision detail

Summary

Mr B purchased Fractional Club timeshare membership for £6,600 financed by BPF on 5 November 2014. He complained on 10 November 2021 that BPF was party to an unfair credit relationship and rejected his Section 75 claim. Mr B alleged the Supplier misrepresented the membership as an investment and that BPF failed to conduct proper affordability checks and failed to disclose commission. The ombudsman found the Section 75 misrepresentation claim was time-barred (raised over six years later). Although the Supplier may have breached the Timeshare Regulations by marketing the membership as an investment, the ombudsman found Mr B's purchase was motivated primarily by holiday benefits and membership upgrade, not investment returns, so any breach did not render the credit relationship unfair. The undisclosed commission of £145.20 (2.2% of the loan) was too small to create unfairness. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that while the Supplier may have breached Regulation 14(3) of the Timeshare Regulations by marketing the membership as an investment, this did not render the credit relationship unfair because Mr B's purchase decision was not materially motivated by the investment element. The evidence showed Mr B was primarily motivated by the holiday benefits and the upgrade to gold membership tier. The Section 75 claim for misrepresentation was time-barred (raised more than six years after the cause of action arose). The commission arrangement, while possibly undisclosed, was too small (2.2% of amount borrowed) to create unfairness compared to the high commissions in the Supreme Court's Hopcraft case (55%). The ombudsman applied the principle that regulatory breaches do not automatically create unfairness under Section 140A; the impact on the consumer must be considered holistically.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website