Not upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; connected lender liability under Section 75 of the Consumer Credit Act 1974; alleged misrepresentation; alleged breach of Timeshare Regulations 2010; alleged breach of unfair contract terms regulations complaint against Shawbrook Bank Limited

Decision detail

Summary

Mrs S complained that Shawbrook Bank Limited acted unfairly by financing a Fractional Club timeshare membership purchased on 28 November 2018 for £19,766, alleging misrepresentation by the supplier and an unfair credit relationship. The complaint, raised in December 2024, claimed the supplier misrepresented the investment potential and holiday availability of the membership, breached Regulation 14(3) of the Timeshare Regulations by marketing it as an investment, and that the lender failed to disclose commission arrangements. The ombudsman found the Section 75 misrepresentation claim time-barred under the Limitation Act 1980 (raised more than six years after the cause of action accrued). On the merits, the ombudsman found insufficient evidence of actionable misrepresentation, as Mrs S provided minimal testimony about what was said and the contractual documentation made no profit promises. Although a breach of Regulation 14(3) was possible, the ombudsman found no causal link between any such breach and Mrs S's purchase decision, as her testimony did not establish that investment potential motivated her purchase. The 5% commission was not disproportionate. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the principles from Plevin v Paragon Personal Finance Ltd, Carney v NM Rothschild & Sons Ltd, and Kerrigan v Elevate Credit International Ltd, finding that regulatory breaches do not automatically create unfairness under Section 140A. The key issue was causation: whether any alleged breach materially impacted Mrs S's decision to purchase. The ombudsman found that Mrs S's testimony was insufficient to establish that she was motivated by investment potential or misled about it. The Section 75 claim was time-barred as it was raised more than six years after the cause of action accrued on 28 November 2018. The commission arrangement (5% of credit charge) was not so high as to render the relationship unfair, distinguishing this case from Johnson v FirstRand Bank Ltd where commission was 55%.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website