Not upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; connected lender liability under Section 75 of the Consumer Credit Act 1974; alleged breach of Regulation 14(3) of the Timeshare Regulations; alleged misrepresentation and breach of contract by supplier; undisclosed commission arrangements complaint against Tandem Bank Limited (trading as Tandem)

Decision detail

Summary

Mr C complained that Tandem Bank Limited acted unfairly by being party to an unfair credit relationship and by rejecting his Section 75 claims against the Supplier regarding a Fractional Club timeshare membership purchased in May 2019 for £22,188 financed through a loan. Mr C alleged the Supplier misrepresented the product as an investment and opportunity for savings, breached the Purchase Agreement, and marketed the timeshare in breach of Regulation 14(3) of the Timeshare Regulations. The ombudsman found no actionable misrepresentation in the written materials, no breach of contract, and concluded that even if the Supplier had breached Regulation 14(3), this would not have rendered the credit relationship unfair because Mr C's purchase was not motivated by profit expectations. This conclusion was supported by Mr C's actions in trading in the membership for significantly less value six months later and the ombudsman's assessment that his statement, provided four years after the sale, was unreliable. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found no actionable misrepresentation by the Supplier regarding savings on holiday accommodation or exclusive access. While acknowledging the Supplier may have marketed Fractional Club membership as an investment in breach of Regulation 14(3) of the Timeshare Regulations, the ombudsman concluded this was not material to Mr C's purchasing decision because: (1) Mr C's statement was unreliable, provided years after the sale and conflating two separate purchases; (2) Mr C's actions in trading in the membership for significantly less value six months later demonstrated he was not motivated by profit expectations; (3) regulatory breaches do not automatically render credit relationships unfair under Section 140A; and (4) the prospect of financial gain was not an important motivating factor in Mr C's purchase decision. The ombudsman also found the commission arrangements (at most 2.5% of the loan) were not so high as to render the relationship unfair, and Mr C would have proceeded with the loan regardless of disclosure given his desire for the product.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website