Not upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; misrepresentation claim under Section 75 of the Consumer Credit Act 1974; alleged breach of Regulation 14(3) of the Timeshare Regulations; undisclosed commission complaint against Shawbrook Bank Limited

Decision detail

Summary

Mrs A purchased Fractional Club timeshare membership for £17,433 financed by Shawbrook Bank Limited in November 2017. She later complained that the supplier misrepresented the product and that the lender participated in an unfair credit relationship, citing alleged breaches of Regulation 14(3) of the Timeshare Regulations (prohibition on marketing timeshares as investments), undisclosed commission, and irresponsible lending. The ombudsman rejected all grounds, finding no actionable misrepresentation, that any regulatory breach would not have motivated her purchase (as she sought holiday flexibility rather than profit), and that the modest 5% commission would not have changed her decision to borrow. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A, considering whether regulatory breaches automatically created unfairness. The key finding was that even if the supplier breached Regulation 14(3) by marketing the product as an investment, this would not render the credit relationship unfair because Mrs A's own evidence showed she was motivated by booking flexibility and recovering some money, not by profit expectations. The ombudsman found the commission was modest (5% of borrowing) and would not have changed Mrs A's decision had it been disclosed. The ombudsman rejected arguments about irresponsible lending and pressure, finding no evidence of material misrepresentation and that Mrs A had adequate information and a cooling-off period.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website