Not upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; connected lender liability under Section 75 of the Consumer Credit Act 1974; alleged breach of Timeshare Regulations 2010 Regulation 14(3); undisclosed commission arrangements complaint against Clydesdale Financial Services Limited trading as Barclays Partner Finance

Decision detail

Summary

Mr L purchased Fractional Club timeshare membership in November 2012 for £6,803 financed by a £8,803 credit agreement from Clydesdale Financial Services Limited. The product included a share in an Allocated Property's net sale proceeds. Over ten years later, Mr L complained that the Supplier misrepresented the product as an investment in breach of Timeshare Regulations, that the Lender failed to conduct proper affordability checks, and that commission arrangements were undisclosed, rendering the credit relationship unfair. The ombudsman found no misrepresentation, no evidence that investment potential motivated the purchase (Mr L sought additional holiday points), and that the 10% commission was low and would not have deterred the purchase. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A unfairness, considering regulatory breaches do not automatically create unfairness. On Section 75 claims, no actionable misrepresentation or breach of contract by the Supplier was established. Regarding alleged marketing as an investment in breach of Regulation 14(3), while the ombudsman acknowledged this was possible, Mr L's own evidence showed his purchase was motivated by needing additional holiday points, not investment potential. The 10% commission was low compared to the Supreme Court's benchmark cases and would not have deterred Mr L from the purchase. The ombudsman found no fiduciary duty owed by the Supplier as credit broker, and no evidence of concealment of commercial ties. The credit relationship was not rendered unfair by any of the alleged failings.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website