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

Decision detail

Summary

Ms M purchased Fractional Club timeshare membership in May 2018 for £15,430, financed by a credit agreement with Clydesdale Financial Services Limited. In March 2025, more than six years later, Ms M complained that the lender acted unfairly by rejecting her Section 75 claim for misrepresentation and by being party to an unfair credit relationship under Section 140A of the Consumer Credit Act 1974. Ms M alleged the supplier had misrepresented the investment value and resale potential of the membership and had breached the Timeshare Regulations by marketing it as an investment. She also complained about undisclosed commission (£385.75, 2.5% of the loan). The ombudsman rejected all grounds: the Section 75 claim was time-barred under the Limitation Act 1980; there was no actionable misrepresentation; Ms M's purchase was motivated by holiday access rather than investment; the commission was not disproportionately high; and Ms M would have proceeded with the purchase regardless of commission disclosure. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A analysis, finding that regulatory breaches do not automatically create unfairness. On the Section 75 claim, the six-year limitation period under the Limitation Act 1980 had expired before Ms M notified the lender, making it reasonable for the lender to reject the claim. On the unfair relationship claim, the ombudsman found: (1) no actionable misrepresentation regarding investment value or property appreciation; (2) insufficient evidence that Ms M's purchase was motivated by investment prospects rather than holiday access; (3) the commission of 2.5% was not disproportionately high compared to the 55% in Johnson's case; (4) Ms M would have proceeded with the purchase regardless of commission disclosure given her desire for the product and lack of alternative funding; and (5) the Supplier did not owe Ms M a fiduciary duty when acting as credit broker. The ombudsman gave significant weight to the absence of detail in Ms M's statement and the original complaint regarding her motivations, and noted the timing of her statement (after the Shawbrook judgment) raised concerns about recollection reliability.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website