Not upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; connected lender liability under Section 75 of the Consumer Credit Act 1974; alleged breach of Regulation 14(3) of the Timeshare Regulations; undisclosed commission complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr and Mrs G complained that Shawbrook Bank Limited acted unfairly by being party to an unfair credit relationship and by rejecting Section 75 claims for misrepresentation and breach of contract relating to a £8,299 loan for fractional timeshare membership. The ombudsman found no actionable misrepresentation because the complainants provided insufficient evidence that the supplier made false statements of fact rather than opinions. Although the supplier may have breached Regulation 14(3) by marketing the product as an investment, the ombudsman found this was not causative of the purchase, as the complainants appeared motivated by holiday benefits. The undisclosed commission of £829.90 was not so high as to render the relationship unfair under Section 140A. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found no actionable misrepresentation because Mr and Mrs G provided insufficient evidence that the supplier made false statements of existing fact rather than honestly held opinions. While the supplier may have breached Regulation 14(3) by marketing the product as an investment, this was not causative of their purchasing decision, as they appeared motivated by holiday benefits rather than investment returns. The evidence showed they attempted to cancel due to inability to afford maintenance fees, not because they felt misled about investment potential. The commission of £829.90 was not so high as to render the relationship unfair under Section 140A, particularly given the Supreme Court's guidance in Johnson, Wrench and Hopcraft. Regulatory breaches do not automatically create unfairness; they must be considered in the round with regard to their actual impact on the consumer.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website