Not upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; Section 75 claims for misrepresentation and breach of contract; undisclosed commission payments complaint against Clydesdale Financial Services Limited, trading as Barclays Partner Finance

Decision detail

Summary

Mr N complained that Clydesdale Financial Services Limited (trading as Barclays Partner Finance) acted unfairly by participating in an unfair credit relationship and rejecting his Section 75 claims relating to timeshare purchases financed through two credit agreements in 2015 and 2016. The ombudsman rejected all aspects of the complaint. Section 75 claims for misrepresentation were time-barred under the Limitation Act 1980, as Mr N did not notify the lender until February 2023, more than six years after the purchases. The ombudsman found no breach of contract by the supplier regarding holiday availability, as the terms stated availability was subject to demand. Regarding the Section 140A unfair credit relationship claim, the ombudsman found that even if the supplier breached regulations by marketing the fractional club as an investment, this would not render the credit relationship unfair because Mr N's own testimony demonstrated his primary motivation was obtaining better holiday rights rather than financial gain. The ombudsman also found that commission payments to the supplier (1.7-2.5% of the charge for credit) were at low levels and would not have deterred Mr N from borrowing had they been disclosed.

The Ombudsman's reasoning

The ombudsman applied a holistic assessment of the credit relationship under Section 140A, considering the supplier's commercial conduct, information provision, evidence of what was said at sale, and inherent probabilities. The ombudsman found that even if the supplier breached Regulation 14(3) of the Timeshare Regulations by marketing the product as an investment, this would not have rendered the credit relationship unfair because Mr N's own testimony demonstrated his purchases were motivated primarily by obtaining better holiday rights rather than financial gain. The ombudsman also found that the commission payments, while possibly undisclosed, were at low levels (1.7-2.5% of the charge for credit) and would not have deterred Mr N from borrowing. Section 75 claims were rejected as time-barred under the Limitation Act 1980, with the six-year limitation period having expired before Mr N notified the lender in February 2023.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website