Not upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; connected lender liability under Section 75 of the CCA; alleged breach of Regulation 14(3) of the Timeshare Regulations; misrepresentation and breach of contract claims complaint against Tandem Bank Limited

Decision detail

Summary

Mr R financed a £18,995 Fractional Club timeshare purchase through Tandem Bank Limited in July 2018. In May 2024, via a professional representative, he complained that the supplier misrepresented the product as an investment in breach of Regulation 14(3) of the Timeshare Regulations, and that the lender was party to an unfair credit relationship. The ombudsman found that while the product included an investment element (a share in an allocated property), telling prospective members this was not a factual misrepresentation. More significantly, the evidence showed Mr and Mrs R's purchase was motivated by holiday availability and family facilities, not investment returns, meaning any regulatory breach regarding investment marketing was not material to their decision. The ombudsman rejected the complaint, finding no breach of Section 75 of the CCA and no unfair credit relationship under Section 140A.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to assess fairness under Section 140A of the CCA, considering regulatory breaches do not automatically create unfairness. The key finding was that Mr and Mrs R's purchase decision was motivated primarily by holiday availability and family facilities, not by investment potential. Even if the supplier breached Regulation 14(3) by marketing the product as an investment, this breach was not material to their purchasing decision. The ombudsman found the witness statement unreliable due to its undated nature, lack of signature, and apparent drafting after the Shawbrook & BPF v FOS judgment. The ombudsman rejected arguments about exorbitant holiday costs and debentures affecting the allocated property, finding these did not render the credit relationship unfair given the absence of investment motivation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website