Not upheld: Section 75 misrepresentation claim and Section 140A unfair credit relationship complaint against Honeycomb Finance Limited

Decision detail

Summary

Miss C purchased a timeshare and associated loan from Honeycomb Finance Limited in June 2018 and later complained that the supplier had misrepresented the product and that the credit relationship was unfair. She sought to hold the lender liable under Section 75 of the Consumer Credit Act for the supplier's alleged misrepresentations and under Section 140A for an unfair credit relationship. The ombudsman found that Miss C's own recollection did not support allegations that the timeshare was sold as an investment, that she was pressured into the purchase, or that there were material misrepresentations about the product's features. The ombudsman also found that no commission was paid by the lender to the supplier and that there was no evidence of undisclosed commercial ties. Applying the Supreme Court's recent judgment in Hopcraft, Johnson and Wrench, the ombudsman concluded that even if regulatory breaches had occurred, they did not render the credit relationship unfair in the circumstances. The complaint was rejected in full.

The Ombudsman's reasoning

The ombudsman found that Miss C's own recollection of events did not support allegations of misrepresentation or improper pressure. Critically, Miss C did not recall the June 2018 timeshare being sold as an investment, despite recalling a later product being sold that way, suggesting the supplier did not breach Regulation 14(3) on that occasion. The ombudsman applied the Supreme Court's Hopcraft, Johnson and Wrench principles on commission but found them inapplicable because no commission was actually paid. The ombudsman emphasised that regulatory breaches do not automatically create unfairness under Section 140A; breaches must be considered in the round with their practical consequences.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website