Not upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; alleged misrepresentation under Section 75 of the Consumer Credit Act 1974; alleged breach of Regulation 14(3) of the Timeshare Regulations; undisclosed commission complaint against Clydesdale Financial Services Limited trading as Barclays Partner Finance

Decision detail

Summary

Mr S purchased Fractional Club timeshare membership in February 2015 for £10,900 financed through a credit agreement with Barclays Partner Finance. He complained in March 2022 (seven years later) alleging the supplier misrepresented the product as an investment in breach of the Timeshare Regulations, that the credit relationship was unfair under Section 140A of the Consumer Credit Act, and that commission was undisclosed. The ombudsman found no actionable misrepresentation under Section 75, and concluded the credit relationship was not unfair under Section 140A because: (1) Mr S's late recollections (provided nine years after sale) were unreliable and risked being influenced by subsequent court judgments; (2) even if the supplier breached the prohibition on marketing timeshares as investments, this was not material to Mr S's purchasing decision; and (3) the commission of £1,090 (10% of loan amount) was not sufficiently high to render the relationship unfair. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found no actionable misrepresentation by the supplier under Section 75 of the CCA. Regarding Section 140A, the ombudsman concluded that even if the supplier breached Regulation 14(3) of the Timeshare Regulations by marketing the product as an investment, this was not material to Mr S's purchasing decision. The ombudsman gave limited weight to Mr S's late recollections (provided nine years after the sale and after key court judgments), finding a real risk they were influenced by external factors. The commission of £1,090 (10% of amount borrowed) was not sufficiently high to render the credit relationship unfair when compared to the Supreme Court's guidance on commission cases. The ombudsman found no fiduciary duty owed by the supplier to Mr S when acting as credit broker, and no evidence of concealment of the commercial tie between lender and supplier.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website