Not upheld: unfair credit relationship; alleged breach of Timeshare Regulations Regulation 14(3); unfair contract terms; insufficient information provision complaint against Shawbrook Bank Limited

Decision detail

Summary

Ms O complained that Shawbrook Bank Limited was party to an unfair credit relationship when it financed her purchase of Fractional Club timeshare membership for £9,929 in August 2013. She alleged the Supplier breached Timeshare Regulations by marketing the asset-backed membership as an investment, included unfair contract terms, and failed to provide sufficient information about ongoing costs. The ombudsman rejected all grounds, finding that while a regulatory breach was possible, it was not material to the credit relationship's fairness because Ms O's purchase was motivated by lower maintenance fees rather than investment returns, as evidenced by contemporaneous sales notes. The ombudsman also found Ms O's witness statement unreliable due to post-judgment influence and factual inconsistencies, and concluded that regulatory breaches do not automatically render credit relationships unfair under Section 140A.

The Ombudsman's reasoning

The ombudsman applied a holistic analysis under Section 140A, considering the Supplier's commercial conduct, information provision, commission arrangements, and evidence of what was said at the Time of Sale. While acknowledging it was possible the Supplier breached Regulation 14(3) by marketing the membership as an investment, the ombudsman found this was not material because: (1) Ms O's own evidence was unreliable, influenced by similar case law and containing factual inconsistencies (claiming a rental scheme that did not exist); (2) the sales notes indicated her primary motivation was lower maintenance fees, not investment returns; (3) regulatory breaches do not automatically render credit relationships unfair under Section 140A; and (4) the breach would only warrant relief if it materially influenced Ms O's decision to enter the agreements, which the evidence did not support.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website