Not upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; misrepresentation and breach of contract claims under Section 75 of the Consumer Credit Act 1974; alleged breach of Regulation 14(3) of the Timeshare Regulations; undisclosed commission complaint against Tandem Bank Limited (formerly Honeycomb Finance Limited)

Decision detail

Summary

Mr T complained that Tandem Bank Limited acted unfairly by being party to unfair credit relationships and by rejecting Section 75 claims relating to two timeshare purchases financed in 2018 and 2019. The timeshares were asset-backed Fractional Club memberships purchased jointly with Mrs T but financed solely in Mr T's name. Mr T alleged the supplier misrepresented the products as investments and breached contractual terms, and that the lender failed to disclose commission arrangements. The ombudsman found that the first Section 75 claim was time-barred under the Limitation Act 1980, and on the merits there was insufficient evidence of misrepresentation or breach. Regarding Section 140A unfairness claims, the ombudsman found that the purchases were motivated by holiday rights rather than investment returns, any regulatory breach would not have been material, and the low commission (2.5%) would not have rendered the relationships unfair. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that without direct testimony from Mr and Mrs T, reliance had to be placed on documentary evidence and inherent probabilities. On Section 75 claims, the first purchase claim was outside the six-year limitation period under the Limitation Act 1980. On the merits, there was insufficient evidence of actionable misrepresentation or breach of contract by the supplier. Regarding Section 140A unfairness claims, the ombudsman considered the supplier's sales practices, information provision, and commission arrangements. The ombudsman found that: (1) the purchases were motivated by holiday rights rather than investment returns; (2) any breach of Regulation 14(3) of the Timeshare Regulations would not have been material to the purchasing decision; (3) the commission was low (2.5%) compared to the Supreme Court's guidance in Hopcraft, Johnson and Wrench; and (4) the supplier did not owe a fiduciary duty to Mr T. Therefore, the credit relationships were not rendered unfair.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website