Not upheld: Section 75 connected lender liability claim - time-barred misrepresentation claim complaint against Clydesdale Financial Services Limited trading as Barclays Partner Finance

Decision detail

Summary

Mr Y and Mrs Y purchased Fractional Club timeshare membership on 4 September 2014 for £13,900, financed through a credit agreement with Clydesdale Financial Services Limited trading as Barclays Partner Finance. Mr Y alleged the Supplier made misrepresentations at the Time of Sale and raised Section 75 connected lender liability claims on 28 May 2024, more than nine years later. The Lender rejected the claims, and Mr Y complained to the Financial Ombudsman Service. The Ombudsman found the claims were time-barred under the Limitation Act 1980, as the six-year limitation period had expired on 4 September 2020. The Ombudsman upheld the Lender's decision to reject the claims as it was fair and reasonable to do so given the time-barred nature of the claims.

The Ombudsman's reasoning

The Ombudsman applied the Limitation Act 1980 and the Misrepresentation Act 1967 to determine that the cause of action for misrepresentation accrued at the Time of Sale (4 September 2014) when Mr Y entered into the purchase agreement based on alleged misrepresentations. The six-year limitation period for claims under Section 75 of the Consumer Credit Act expired on 4 September 2020. As Mr Y did not notify the Lender of his Section 75 claims until 28 May 2024, the claims were time-barred. The Ombudsman found it was not unfair or unreasonable for the Lender to reject time-barred claims, as it would not be fair to expect creditors to investigate claims so long after the liability arose when a limitation defence would be available in court.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website