Not upheld: unfair credit relationship, Section 75 claim rejection, undisclosed commission complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr and Mrs M purchased a Fractional Club timeshare membership on 19 June 2015 for £8,486, financed by a 12-month 0% interest loan from Shawbrook Bank Limited. More than seven years later, in December 2022, they raised complaints about an unfair credit relationship, the Lender's rejection of a Section 75 claim regarding alleged misrepresentations by the Supplier, and undisclosed commission payments. The ombudsman found that the Section 75 misrepresentation claim was time-barred under the Limitation Act 1980, no breach of contract was demonstrated, and the undisclosed commission complaint failed because the Supplier did not owe a fiduciary duty to the consumers and no commission was paid at the time of sale. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that the Section 75 misrepresentation claim was time-barred as it was made more than six years after the time of sale (19 June 2015 to 6 December 2022), and Section 32 of the Limitation Act 1980 did not apply as there was no evidence of concealment. No breach of contract was demonstrated in the evidence. Regarding the undisclosed commission complaint, the Supreme Court judgment in Hopcraft, Johnson and Wrench established that commission payments to credit brokers are legal where the broker does not owe a fiduciary duty to the consumer. The Supplier, acting as both seller and credit broker, did not owe a fiduciary duty as it was pursuing its own commercial interests in the timeshare sale. Additionally, no commission was actually paid at the time of sale, distinguishing this case from the Supreme Court authorities.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website