Not upheld: Section 75 claim handling; alleged unfair credit relationship; unauthorised credit broker arrangement complaint against First Holiday Finance Ltd

Decision detail

Summary

Mrs and Mr A purchased a Fractional Club timeshare membership in April 2014 financed by a £15,810 loan from First Holiday Finance Ltd. In February 2025, over six years later, they complained that the Lender should have upheld their Section 75 claim for alleged misrepresentations by the Supplier at the Time of Sale, and that the Credit Agreement was unenforceable due to an unauthorised credit broker. The ombudsman found the Section 75 claim was time-barred under the Limitation Act 1980 (six-year limitation period from the Time of Sale), making it fair for the Lender to reject it. The complaint about the unauthorised broker was rejected as no financial loss was demonstrated. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the Limitation Act 1980 to determine that a claim for misrepresentation must be made within six years of the cause of action accruing. Since the Time of Sale was 6 April 2014 and the Section 75 claim was first notified on 14 February 2025 (more than six years later), the claim was time-barred. It would not be fair to expect the Lender to investigate a claim so long after liability arose when a limitation defence would be available in court. Regarding the unauthorised broker allegation, the ombudsman found no financial loss resulted from any improper arrangement, as Mrs and Mr A knew the material terms of the borrowing.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website