Not upheld: unfair credit relationship under Section 140A CCA; connected lender liability under Section 75 CCA; undisclosed commission; alleged breach of Timeshare Regulations 2010 Regulation 14(3) complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr and Mrs K purchased Fractional Club timeshare membership for £14,430 financed by Shawbrook Bank in June 2018. They complained in July 2020 alleging misrepresentation, breach of contract, unfair credit relationship, undisclosed commission, and breach of timeshare marketing regulations. The ombudsman found no actionable misrepresentation as the investment element was genuine; no breach of contract as the Fractional Club continues operating; and no unfair credit relationship despite possible regulatory breaches, because the commission was modest (5%), the complainants' primary motivation was obtaining the timeshare rather than investment returns, they failed to use the 14-day cooling off period, and post-sale records showed satisfaction. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic assessment under Section 140A CCA, considering regulatory breaches do not automatically create unfairness. Regarding Section 75 claims: no actionable misrepresentation was found as the investment element was genuine and no specific sale date guarantee was proven; no breach of contract was found as the Fractional Club continues operating and the property sale mechanism remains intact. Regarding Section 140A: the affordability of lending was not demonstrated to be problematic; the interest rate was not excessive; pressure and language barrier claims were undermined by the 14-day cooling off period not being used and post-sale contact records showing satisfaction; the commission of 5% was low compared to the Supreme Court's benchmark case (55%) and would not have deterred the purchase; no fiduciary duty was owed by the supplier as credit broker; regulatory guidance breaches, even if present, did not render the relationship unfair given the low commission and complainants' motivation to obtain the timeshare.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website