Not upheld: misrepresentation, unfair credit relationship under Section 140A CCA, breach of Timeshare Regulations, Section 75 CCA claim rejection complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr C and Mrs P purchased Fractional Club timeshare membership for £19,044 financed by Shawbrook Bank in August 2018. They later complained that the supplier misrepresented the product as an investment and that the credit relationship was unfair under Section 140A of the CCA. The ombudsman found no actionable misrepresentation because statements about investment returns were opinions rather than false facts, and the consumers' primary motivation was holiday access, not profit. Although the supplier may have breached Regulation 14(3) of the Timeshare Regulations by marketing the product as an investment, this did not render the credit relationship unfair because the consumers would have purchased the membership regardless. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A, finding that regulatory breaches do not automatically render a credit relationship unfair. The key finding was that Mr C and Mrs P's purchase was motivated primarily by holiday benefits, not investment potential, even if the supplier may have breached Regulation 14(3) by marketing the product as an investment. The ombudsman found no actionable misrepresentation because statements about investment potential were honestly held opinions rather than false statements of fact, and the consumers would have purchased the membership regardless of any investment element. The ombudsman also found no breach of the RAO as the Fractional Club qualified as a timeshare contract exempt from collective investment scheme rules.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website