Not upheld: unfair credit relationship under section 140A CCA; section 75 CCA claim (misrepresentation and breach of contract); timeshare mis-selling; alleged breach of Timeshare Regulations 2010 Regulation 14(3); undisclosed commission complaint against Clydesdale Financial Services Limited (trading as Barclays Partner Finance)

Decision detail

Summary

Mrs L purchased Fractional Club timeshare membership for £9,604 in May 2013, financed by a credit agreement with Clydesdale Financial Services Limited. In May 2017, through a professional representative, she complained that the supplier had misrepresented the product and that the lender was party to an unfair credit relationship. She alleged the supplier breached Regulation 14(3) of the Timeshare Regulations by marketing the membership as an investment, failed to conduct proper affordability checks, and that undisclosed commission arrangements rendered the relationship unfair. The ombudsman found no evidence of actionable misrepresentation or breach of contract, and concluded that even if Regulation 14(3) had been breached, Mrs L's purchase was motivated by holiday benefits rather than investment potential, so the breach was not causative of her decision. The commission amount was modest and would not have deterred her. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to section 140A analysis, considering whether any breaches or failings were causative of the consumer's decision to enter the agreement. While acknowledging that a breach of Regulation 14(3) was possible, the ombudsman found that Mrs L's purchase was not motivated by the prospect of financial gain, as evidenced by her original statement emphasizing holiday benefits and shorter term rather than investment returns. The ombudsman preferred Mrs L's detailed original statement over later questionnaires, finding them more persuasive and internally consistent. The commission amount (8.95% of charge for credit) was found to be low and not disproportionate. The ombudsman concluded that regulatory breaches do not automatically create unfairness under section 140A; such breaches must be considered in the round with regard to their actual impact on the consumer's decision-making.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website