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

Decision detail

Summary

Mr E and Mrs E purchased Fractional Club timeshare membership for £15,250 in August 2017, financed by a credit agreement of £18,976 from Barclays Partner Finance. They complained in November 2021 that the supplier had misrepresented the product as an investment and that the lender had participated in an unfair credit relationship. The ombudsman found no actionable misrepresentation under Section 75 of the Consumer Credit Act, as statements about investment appreciation were opinions rather than false facts. While the supplier may have breached Regulation 14(3) of the Timeshare Regulations by marketing the product as an investment, the ombudsman found this was not material to the consumers' decision, as the evidence did not demonstrate that profit motivation was a key factor in their purchase. The undisclosed commission of £474.40 (2.5% of the amount borrowed) was not sufficiently high to render the credit relationship unfair under Section 140A. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found no actionable misrepresentation under Section 75 because statements about investment appreciation were opinions rather than false statements of fact. Regarding Section 140A, while the supplier may have breached Regulation 14(3) by marketing the product as an investment, this was not material to the consumers' purchasing decision, as the evidence did not persuade the ombudsman that profit motivation was a key factor in their decision. The commission of 2.5% was not so high as to render the relationship unfair, particularly given the consumers' desire for the product and lack of alternative means to pay. The ombudsman gave little weight to the consumers' late recollections about investment motivation due to timing concerns and risk of external influence.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website