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

Decision detail

Summary

Mrs S and Mr S purchased a Fractional Club timeshare membership in June 2016 for £13,873, financed by a £16,000 loan from Shawbrook Bank Limited. In July 2022, they complained that the timeshare had been misrepresented as an investment in breach of Regulation 14(3) of the Timeshare Regulations and that the lender was party to an unfair credit relationship. They also claimed the lender should have paid their Section 75 claim against the supplier. The ombudsman found the Section 75 claim was time-barred, having been raised more than six years after the Time of Sale. Regarding the unfair credit relationship claim, the ombudsman concluded that even if the supplier had breached Regulation 14(3), this was not material to the consumers' purchasing decision, as their evidence was provided over seven years after the sale and likely influenced by external factors. The ombudsman also found no evidence of undisclosed commission and concluded the supplier did not owe a fiduciary duty. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found the Section 75 claim was time-barred under the Limitation Act 1980, as more than six years had passed between the Time of Sale (21 June 2016) and when the claim was first notified to the lender (15 July 2022). Regarding Section 140A, the ombudsman concluded that even if the supplier had breached Regulation 14(3) by marketing the timeshare as an investment, this was not material to the consumers' purchasing decision. The ombudsman placed little weight on the consumers' late evidence (provided over seven years after the sale) regarding their motivations, finding it likely to have been influenced by the Investigator's view and/or the Shawbrook & BPF v FOS judgment. The ombudsman also found no evidence of commission payment to the supplier and concluded that the supplier did not owe a fiduciary duty to the consumers when acting as a credit broker.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website