Not upheld: unfair credit relationship under Section 140A CCA; alleged misrepresentation under Section 75 CCA; breach of Timeshare Regulations; irresponsible lending complaint against First Holiday Finance Ltd

Decision detail

Summary

Mr and Mrs E purchased Fractional Club timeshare membership for £13,110 on 30 December 2016, funded by a £12,610 credit agreement from First Holiday Finance. They complained that First Holiday Finance was party to an unfair credit relationship and liable for misrepresentations made by the timeshare company C under Sections 75 and 140A of the Consumer Credit Act 1974. The ombudsman found that the alleged misrepresentations regarding guaranteed end dates, resort exclusivity, and Interval International rates were not substantiated. Although the Fractional Club included an investment element and may have been marketed as such in breach of the Timeshare Regulations, the ombudsman found no persuasive evidence that the prospect of financial gain was a material factor in Mr and Mrs E's purchase decision, which appeared motivated by holiday benefits. The ombudsman concluded the credit relationship was not unfair and the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied Section 140A of the CCA to assess whether the credit relationship was unfair. While accepting that C was deemed an agent of First Holiday Finance under Section 56, the ombudsman found no actionable misrepresentations regarding the guaranteed end date, exclusivity of resorts, or Interval International rates. Regarding the investment marketing claim, although the Fractional Club included an investment element and may have been marketed as such in breach of Regulation 14(3) of the Timeshare Regulations, the ombudsman found no persuasive evidence that the prospect of financial gain was a material factor in Mr and Mrs E's purchase decision. The evidence suggested their motivation was the holiday arrangements and Interval International membership. The ombudsman applied the test from Plevin and subsequent case law requiring material impact on the purchase decision, not merely a regulatory breach. The creditworthiness assessment was proportionate to the circumstances.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website