Not upheld: Section 75 Consumer Credit Act claim (misrepresentation) and undisclosed commission complaint against Shawbrook Bank Limited

Decision detail

Summary

Mrs M and the estate of Mr M complained that Shawbrook Bank acted unfairly by declining their Section 75 claim for misrepresentation regarding a timeshare purchase financed in February 2013, and by failing to disclose commission paid to the timeshare supplier. The ombudsman found the Section 75 claim was time-barred under the Limitation Act 1980, as the complaint was not raised until January 2023, nearly 10 years after the sale. The undisclosed commission complaint was rejected as the 8% commission was not disproportionately high and would not have altered the borrowers' decision to proceed with the loan. The ombudsman applied the Supreme Court's recent judgment in Hopcraft, Johnson and Wrench and found no evidence of improper commercial arrangements or fiduciary duties owed by the Supplier.

The Ombudsman's reasoning

The ombudsman found that the Section 75 claim was time-barred as the cause of action accrued on the date of sale (February 2013) and the complaint was not raised until January 2023, outside the six-year limitation period under the Limitation Act 1980. Regarding the undisclosed commission, the ombudsman applied the Supreme Court's judgment in Hopcraft, Johnson and Wrench and found that the 8% commission was not disproportionately high, the Supplier was not acting as an agent with fiduciary duties to the borrowers, and the borrowers would have proceeded with the loan regardless of commission disclosure given their desire for the timeshare and lack of alternative funding.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website