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

Decision detail

Summary

Mrs and Mr M purchased a Fractional Club timeshare membership in August 2012 for £9,898 borrowed through Shawbrook Bank Limited, with total repayment of £28,077 over 180 months. The membership included holiday points and a share in an Allocated Property. They complained in September 2020, over eight years later, alleging the lender was party to an unfair credit relationship and wrongly rejected their Section 75 claim against the supplier. The ombudsman found the Section 75 claim was time-barred under the Limitation Act 1980 as the six-year limitation period had expired. Regarding the Section 140A unfair relationship claim, the ombudsman concluded the relationship was not unfair because: the consumers were experienced timeshare purchasers motivated by holiday points rather than investment returns; any breach of the prohibition on marketing as an investment was not material to their decision; the commission of 1.09% of the charge for credit was modest and properly disclosed; and the consumers had full information about all costs. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that the Section 75 claim was time-barred under the Limitation Act 1980 because the cause of action accrued on 30 August 2012 (date of sale) and the claim was not made until 21 September 2020, exceeding the six-year limitation period. Regarding Section 140A, the ombudsman concluded the credit relationship was not unfair because: (1) affordability concerns were generic and unsupported; (2) undue pressure allegations were implausible given the consumers' experience and prior declining of purchases; (3) while a possible breach of Regulation 14(3) existed regarding marketing as an investment, the consumers were not motivated by investment considerations but by desire for holiday points; (4) the commission was modest at 1.09% of charge for credit, well below the 55% in the Supreme Court's Johnson case; (5) the consumers had full information about pricing and costs; and (6) regulatory breaches do not automatically render credit relationships unfair under Section 140A.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website