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

Decision detail

Summary

Ms M purchased Fractional Club timeshare membership in June 2013 for £7,713 financed by a credit agreement with Clydesdale Financial Services Limited. The membership included holiday rights and a share in a property's net sale proceeds. Ms M complained in April 2025 (over 11 years later) that the lender was party to an unfair credit relationship and should pay Section 75 claims for the supplier's alleged misrepresentations and breach of contract. The ombudsman rejected all grounds: Section 75 claims were time-barred under the Limitation Act 1980; no breach of contract was established as availability limitations were disclosed; and the credit relationship was not unfair under Section 140A because Ms M's own evidence showed she was motivated by holiday benefits rather than investment returns, the commission of 10% was not excessive, and she would have proceeded with the purchase regardless of disclosure of commission arrangements.

The Ombudsman's reasoning

The ombudsman applied a multi-layered analysis. First, Section 75 claims for misrepresentation were time-barred under the Limitation Act 1980 (six years from time of sale), making it reasonable for the lender to reject them. Second, no breach of contract was established as holiday availability limitations were disclosed in the sales paperwork. Third, under Section 140A, while a possible breach of Regulation 14(3) (marketing as investment) was acknowledged, the ombudsman found Ms M's own evidence showed she was motivated by improved holiday rights and shorter contract term, not profit expectations, so any regulatory breach was not material to her decision. Fourth, the commission of 10% was not high enough to render the relationship unfair, particularly given Ms M wanted the product and had no alternative means of payment. The ombudsman applied the Supreme Court's Hopcraft, Johnson and Wrench principles but distinguished the case on the basis of the low commission level, lack of evidence of commercial concealment, and Ms M's likely conduct had disclosure been made.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website