Not upheld: irresponsible lending, misrepresentation, unfair credit relationship, breach of timeshare regulations complaint against Tandem Bank Limited

Decision detail

Summary

Mr M purchased a Fractional Club timeshare membership in April 2019 for £10,207 financed by Tandem Bank Limited, and later complained that the supplier misrepresented it as an investment and that the lender participated in an unfair credit relationship. The ombudsman found no actionable misrepresentation under Section 75 of the Consumer Credit Act 1974, as the supplier's documentation clearly disclosed the terms and Mr M's own testimony lacked meaningful detail about investment representations influencing his decision. Although the supplier may have breached Regulation 14(3) of the Timeshare Regulations by marketing the membership as an investment, regulatory breaches do not automatically create unfairness under Section 140A. The ombudsman concluded that Mr M's purchase was primarily motivated by holiday benefits based on his previous trial memberships and his statement, and that he would have proceeded regardless of any investment marketing. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found no actionable misrepresentation by the supplier under Section 75 of the CCA. While the supplier may have marketed the membership as an investment in breach of Regulation 14(3) of the Timeshare Regulations, this did not automatically render the credit relationship unfair. The ombudsman concluded that Mr M's decision to purchase was primarily motivated by the holiday benefits rather than the prospect of financial gain, based on his own testimony which lacked meaningful detail about investment considerations. The ombudsman noted that Mr M's recollections were vague and potentially influenced by the Shawbrook judgment handed down after the complaint was made. Regarding commission, the ombudsman found that no commission was actually paid by the lender to the supplier, distinguishing this case from the Supreme Court's Johnson case. The ombudsman applied the principles from Hopcraft, Johnson and Wrench but found they did not assist Mr M given the specific facts. The ombudsman also found no evidence of unfair contract terms being operated unfairly in practice, no evidence of unaffordable lending, and insufficient evidence of pressure preventing Mr M from exercising choice (particularly given the 14-day cooling-off period he did not use).

How this compares

Source

Read the original decision on the Financial Ombudsman Service website