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; undisclosed commission; alleged breach of Timeshare Regulations complaint against Clydesdale Financial Services Limited trading as Barclays Partner Finance

Decision detail

Summary

Mr L complained that Clydesdale Financial Services Limited (trading as Barclays Partner Finance) acted unfairly by financing a timeshare purchase and rejecting his Section 75 claims for alleged misrepresentation and breach of contract by the Supplier. Mr L also alleged the credit relationship was unfair under Section 140A due to undisclosed commission and alleged breaches of the Timeshare Regulations. The ombudsman found no actionable misrepresentation because European Collection membership was not asset-backed and could not be marketed as an investment, and no evidence showed it was so marketed. No breach of contract was found as the Purchase Agreement did not include the provision alleged. The credit relationship was not unfair under Section 140A because the commission was low (2.55%), Mr L had information to understand the cost of credit, and the Supplier did not owe a fiduciary duty. The ombudsman concluded the Lender acted fairly in rejecting the claims and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found no actionable misrepresentation by the Supplier because: (1) European Collection membership was not asset-backed and therefore could not be marketed as an investment; (2) the evidence did not show the Supplier marketed it as an investment; (3) there was no breach of contract as the Purchase Agreement did not include the provision alleged; (4) the credit relationship was not unfair under Section 140A because the commission was low (2.55%), Mr L had the information needed to understand the cost of credit, and the Supplier did not owe a fiduciary duty to Mr L; (5) regulatory breaches do not automatically create unfairness under Section 140A and must be considered in the round; (6) Mr L would have proceeded with the purchase even with full disclosure of commission given his desire for the membership and lack of alternative means to pay.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website