Not upheld: section 75 claim rejection and alleged unfair credit relationship under section 140A of the Consumer Credit Act 1974 complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr H purchased a Fractional Club timeshare membership in March 2017 for £10,338 financed through a credit agreement with Shawbrook Bank Limited. The membership included a share in an allocated property's net sale proceeds. In December 2023, Mr H complained that the lender acted unfairly by rejecting his section 75 claim for misrepresentation and by participating in an unfair credit relationship under section 140A of the Consumer Credit Act 1974. The ombudsman found the section 75 claim was time-barred as it was raised more than six years after the purchase date. Regarding the section 140A claim, the ombudsman found no unfair credit relationship, determining that Mr H's purchase was motivated by holiday availability and accommodation quality rather than investment potential, and that even if the supplier breached regulations prohibiting marketing timeshares as investments, this did not materially affect Mr H's decision-making. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the Limitation Act 1980 to determine that the cause of action accrued at the time of sale (8 March 2017), making the section 75 claim time-barred when raised on 19 December 2023. Regarding section 140A unfairness, the ombudsman found that even if the supplier breached Regulation 14(3) by marketing the timeshare as an investment, this did not render the credit relationship unfair because Mr H's purchase decision was motivated primarily by holiday availability and accommodation quality, not by the prospect of financial gain. The ombudsman rejected arguments about misrepresentation, unfair contract terms, and undisclosed commission, finding that none of these factors materially impacted Mr H's decision-making or rendered the relationship unfair when considered in the round.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website