Not upheld: unfair credit relationship under Section 140A CCA; Section 75 CCA claims (misrepresentation and breach of contract); alleged breach of Timeshare Regulations; irresponsible lending; undisclosed commission arrangements complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr B purchased two Fractional Club timeshare memberships in 2015, financed by loans from Shawbrook Bank. The estate of Mr B complained in 2023 (over 6 years later) alleging misrepresentation, breach of contract, and an unfair credit relationship. The ombudsman rejected all grounds: Section 75 claims were time-barred under the Limitation Act 1980; no actionable breach of contract was established; and the credit relationship was not rendered unfair under Section 140A, as the evidence did not show that the prospect of financial gain motivated Mr B's purchase, meaning any potential regulatory breach by the Supplier was not material to his decision. The ombudsman also found that Credit Agreement 2 could not be considered against the Lender as it had been sold to a debt purchaser.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A analysis, considering whether any alleged breaches (including potential breach of Regulation 14(3) of the Timeshare Regulations regarding marketing as an investment) were material to Mr B's purchasing decision. The key finding was that even if the Supplier had breached regulatory requirements, the evidence did not demonstrate that the prospect of financial gain was an important motivating factor in Mr B's decision to purchase. The ombudsman rejected the argument that regulatory breaches automatically create unfairness, instead requiring consideration of their actual impact on the complainant. Regarding Credit Agreement 2, the ombudsman found the Lender ceased to be the creditor when the debt was sold, removing the basis for complaint against the Lender on that agreement.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website