Not upheld: unfair credit relationship under Section 140A CCA; Section 75 claim rejection; alleged breach of Timeshare Regulations Regulation 14(3); alleged misrepresentation; alleged pressure selling complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr and Mrs D purchased a Fractional Club timeshare membership in September 2015 for £15,989, financed by a £18,652 loan from Shawbrook Bank. In August 2023, they complained that the lender was party to an unfair credit relationship and rejected a Section 75 claim for misrepresentation. The ombudsman found the Section 75 claim time-barred under the Limitation Act 1980 as more than 6 years had elapsed. Regarding the Section 140A unfair credit relationship claim, the ombudsman found that even if the supplier had 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 and Mrs D's own testimony indicated they were motivated by holiday savings and receiving money back at the end of the membership term, not by prospect of financial gain. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A analysis, considering whether regulatory breaches automatically create unfairness (they do not). The key finding was that even if the supplier breached Regulation 14(3) by marketing the product as an investment, Mr and Mrs D's own testimony showed they were motivated by holiday savings and getting money back at the end, not by prospect of financial gain/profit. Therefore, any breach would not have been material to their purchasing decision. The Section 75 claim was rejected as time-barred since the cause of action accrued at the time of sale (22 September 2015) and the claim was not notified until 22 August 2023, exceeding the 6-year limitation period.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website