Upheld: unfair credit relationship; breach of Regulation 14(3) of the Timeshare Regulations; irresponsible lending complaint against Honeycomb Finance Limited
Financial Ombudsman decision DRN-6378969 of 2026-05-22T00:00:00+00:00. unfair credit relationship; breach of Regulation 14(3) of the Timeshare Regulations; irresponsible lending complaint against Honeycomb Finance Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6378969 |
|---|---|
| Decision date | 2026-05-22T00:00:00+00:00 |
| Firm | Honeycomb Finance Limited |
| Product | credit agreement (loan for timeshare purchase) |
| Claim type | unfair credit relationship; breach of Regulation 14(3) of the Timeshare Regulations; irresponsible lending |
| Outcome | Upheld |
| Remedy | The Lender must: (1) Refund Mr A's repayments under the Credit Agreement; (2) Refund annual management charges paid; (3) Deduct the value of promotional giveaways used and the market value of holidays taken; (4) Add simple interest at 8% per annum to net repayments from the date each was made until settlement; (5) Remove adverse credit file information within six years; (6) Indemnify Mr A and Ms B against all ongoing liabilities from the Fractional Club membership if they assign or hold the Allocated Property interest for the Lender. |
Summary
Mr A financed the purchase of Fractional Club membership for £15,430 through a credit agreement with Honeycomb Finance Limited. The membership was asset-backed and included a share in an allocated property's sale proceeds. Mr A and Ms B complained that the Supplier breached Regulation 14(3) of the Timeshare Regulations by marketing and selling the membership as an investment, which rendered the credit relationship unfair. The Ombudsman found the Supplier's training materials and sales presentation encouraged representatives to emphasize property ownership and financial returns. Mr A and Ms B's credible testimony indicated the prospect of profit was material to their purchasing decision. The Ombudsman upheld the complaint and directed the Lender to refund repayments and management charges, deduct holiday values, add 8% simple interest, remove adverse credit information, and indemnify against ongoing liabilities.
The Ombudsman's reasoning
The Ombudsman found that the Supplier breached Regulation 14(3) of the Timeshare Regulations by marketing and selling Fractional Club membership as an investment. The training materials and sales presentation encouraged representatives to present membership as property ownership with financial returns, implying future profits. Mr A and Ms B's testimony, which the Ombudsman found credible despite some inconsistencies, demonstrated that the prospect of financial gain from the property sale was material to their purchasing decision. They were reluctant to purchase until the sales representative emphasized the investment element and profit potential. The Ombudsman rejected arguments that the consumers' sophistication or the use of 15 holidays undermined this finding, noting that the total outlay included both the membership cost and holidays taken. The breach of Regulation 14(3) rendered the credit relationship unfair under Section 140A of the CCA because it was material to the consumers' decision to enter into the Purchase Agreement and Credit Agreement.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Honeycomb Finance Limited, all decisions | 48 | 28% |
Source
Read the original decision on the Financial Ombudsman Service website