Not upheld: unfair credit relationship under section 140A of the Consumer Credit Act 1974; section 75 claims for misrepresentation and breach of contract; alleged breach of Regulation 14(3) of the Timeshare Regulations complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr P purchased a fractional timeshare membership for £14,810 financed by Shawbrook Bank Limited and later complained that the supplier misrepresented the product, that the lender was party to an unfair credit relationship, and that the lender wrongly rejected his section 75 claim. The ombudsman found that while the supplier may have breached Regulation 14(3) by marketing the timeshare as an investment, this did not render the credit relationship unfair because Mr P's purchase was motivated by holiday rights rather than investment prospects, as evidenced by his own written recollections. No actionable misrepresentation or breach of contract was established. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to section 140A, finding that regulatory breaches do not automatically create unfairness. The key finding was that Mr P's purchase was not motivated by investment prospects but by holiday rights, as evidenced by his own written recollections which made no mention of investment motivation. The ombudsman found the PR's later assertion that investment was a motivating factor lacked credibility and appeared influenced by subsequent case law. Even if Regulation 14(3) was breached, this would not have altered Mr P's purchasing decision. The ombudsman also found no actionable misrepresentation, no breach of contract (as Mr P remained a member with ongoing rights), and no unfair credit relationship arising from commission arrangements, particularly as no commission was paid at the time of sale.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website