Upheld: breach of Regulation 14(3) of the Timeshare Regulations (marketing timeshare as investment) and unfair credit relationship under Section 140A of the Consumer Credit Act 1974 complaint against Shawbrook Bank Limited
Financial Ombudsman decision DRN-6351273 of 2026-05-11T00:00:00+00:00. breach of Regulation 14(3) of the Timeshare Regulations (marketing timeshare as investment) and unfair credit relationship under Section 140A of the Consumer Credit Act 1974 complaint against Shawbrook Bank Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6351273 |
|---|---|
| Decision date | 2026-05-11T00:00:00+00:00 |
| Firm | Shawbrook Bank Limited |
| Product | timeshare (fractional points) financed by personal loan |
| Claim type | breach of Regulation 14(3) of the Timeshare Regulations (marketing timeshare as investment) and unfair credit relationship under Section 140A of the Consumer Credit Act 1974 |
| Outcome | Upheld |
| Remedy | The Lender must: (1) refund all repayments made under the Credit Agreement and cancel any outstanding balance; (2) refund annual management charges paid for the Balkan Jewel membership; (3) deduct the market value of holidays taken using the fractional points and any promotional giveaways used; (4) add 8% simple interest per annum to net repayments from the date each was made until settlement; (5) remove any adverse credit file information recorded within six years of the decision; (6) indemnify Mr and Mrs W against all ongoing liabilities from the Balkan Jewel membership if it remains in place, provided they assign or hold the benefit of their interest in the Allocated Property for the Lender. |
Summary
Mr and Mrs W complained that Shawbrook Bank Limited acted unfairly by financing a £11,600 purchase of 20,000 Balkan Jewel fractional timeshare points on 21 October 2015, which they alleged was marketed and sold as an investment in breach of Regulation 14(3) of the Timeshare Regulations. The Ombudsman initially rejected the complaint in a first provisional decision, finding the written evidence unreliable due to inconsistencies. However, after reviewing a telephone recording of Mr and Mrs W's conversation with the PR's agent from August 2019, the Ombudsman found credible evidence that the Supplier had positioned the membership as an investment offering profit potential of approximately £25,000 after 15 years. The Ombudsman determined this breach was material to their purchasing decision and rendered the credit relationship unfair under Section 140A of the Consumer Credit Act 1974. The Lender was directed to refund all repayments, cancel outstanding balances, refund management charges, deduct holiday value and promotional benefits, add 8% simple interest, remove adverse credit file entries, and indemnify against ongoing liabilities.
The Ombudsman's reasoning
The Ombudsman found that the Supplier breached Regulation 14(3) of the Timeshare Regulations by marketing and selling Balkan Jewel membership as an investment. Although the product included disclaimers stating it should not be viewed as an investment, the Ombudsman applied the principle from Shawbrook & BPF v FOS that the prohibition captures not just the use of the word 'investment' but also leading consumers to expect financial gains. The telephone recording evidence showed Mr and Mrs W were told the membership was an investment in property that would provide profit potential. The Ombudsman found this was material to their purchasing decision, particularly given their previous fractional purchase in 2013 was sold with similar investment messaging. The Ombudsman rejected the Lender's argument that the evidence only related to the 2013 sale, finding the pattern of sales and Mr and Mrs W's consistent motivation (investment potential and defined membership term) demonstrated the Balkan Jewel membership was sold the same way. The breach rendered the credit relationship unfair under Section 140A because Mr and Mrs W would not have purchased the membership but for the breach.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Shawbrook Bank Limited, all decisions | 2,486 | 17% |
Source
Read the original decision on the Financial Ombudsman Service website