Not upheld: unfair credit relationship under Section 140A CCA; rejection of Section 75 claim; alleged breach of Timeshare Regulations Regulation 14(3) complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr and Mrs H purchased Fractional Club timeshare membership in May 2014 financed by Shawbrook Bank Limited and raised complaints in May 2023 alleging the Supplier breached Regulation 14(3) by marketing it as an investment and that the Lender was party to an unfair credit relationship. They also claimed the Lender wrongly rejected a Section 75 claim. The ombudsman found the Section 75 claim time-barred under the Limitation Act as it was raised more than six years after the purchase. On the Section 140A unfair relationship claim, the ombudsman found that while the Supplier may have marketed the product as an investment in breach of Regulation 14(3), the evidence did not establish this was material to Mr and Mrs H's decision to purchase, particularly given they had prior timeshare experience, allowed the membership to lapse due to holiday booking difficulties, and delayed raising investment concerns for years. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A analysis, considering that regulatory breaches do not automatically create unfairness. The key issue was whether any alleged breach of Regulation 14(3) (prohibition on marketing timeshares as investments) materially motivated Mr and Mrs H's purchase decision. The ombudsman found inconsistencies in their account: they had prior timeshare experience, yet claimed not to understand the system; they allowed membership to lapse due to holiday booking difficulties rather than investment concerns; and they waited until 2023 to raise investment-related complaints despite allegedly discovering issues in 2015. The ombudsman concluded the evidence suggested they would have purchased regardless of any breach, and therefore the credit relationship was not unfair. The Section 75 claim was rejected as time-barred under the Limitation Act, with the cause of action accruing at the time of sale in 2014.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website