Not upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; connected lender liability under Section 75 of the Consumer Credit Act 1974; alleged breach of Regulation 14(3) of the Timeshare Regulations 2010; undisclosed commission complaint against Clydesdale Financial Services Limited trading as Barclays Partner Finance

Decision detail

Summary

Mr S purchased Signature Collection timeshare membership in February 2016 for £11,091, financed by a £22,587 credit agreement from Clydesdale Financial Services Limited trading as Barclays Partner Finance. Mr S, through a professional representative, complained in May 2018 that the supplier had misrepresented the product, that the lender had failed to conduct proper affordability checks, and that the credit relationship was unfair under Section 140A of the Consumer Credit Act 1974, particularly because the timeshare was marketed as an investment in breach of Regulation 14(3) of the Timeshare Regulations 2010. The lender rejected all complaints. An investigator upheld the complaint, but the ombudsman found no actionable misrepresentation, concluded that even if the supplier had breached Regulation 14(3), this would not have rendered the credit relationship unfair because Mr S's purchase was not motivated by financial gain, and found the commission arrangement (£383.98 or 1.7% of amount borrowed) was not disproportionate. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found no actionable misrepresentation by the supplier regarding guaranteed end dates, exclusivity, or being the only way to exit existing membership. While acknowledging the supplier's sales process left open the possibility that Signature Collection was marketed as an investment in breach of Regulation 14(3) of the Timeshare Regulations, the ombudsman concluded this was not determinative because Mr S's purchase was not motivated by the prospect of financial gain. The ombudsman rejected arguments about unfair affordability checks, lack of lender choice, sales pressure, and unfair contract terms, finding none rendered the credit relationship unfair. The commission of £383.98 (1.7% of amount borrowed) was found to be low and not disproportionate, distinguishing this case from the Supreme Court's Johnson decision where commission was 55%. The ombudsman gave limited weight to Mr S's witness statement due to timing issues, lack of signature/date, and inconsistencies with statements provided in relation to other complaints.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website