Not upheld: irresponsible lending, unfair credit relationship under Section 140A of the Consumer Credit Act 1974, Section 75 claim handling, alleged breach of Timeshare Regulations complaint against Clydesdale Financial Services Limited (trading as Barclays Partner Finance)

Decision detail

Summary

Mr K purchased Fractional Club timeshare membership in November 2017 for £10,333 using a credit agreement with Clydesdale Financial Services Limited. The membership included a share in the net sale proceeds of an allocated property. In April 2024, more than 6 years later, Mr K raised multiple complaints including that the supplier misrepresented the product, breached contract regarding holiday availability, and that the lender participated in an unfair credit relationship by potentially allowing the supplier to market the timeshare as an investment in breach of Regulation 14(3) of the Timeshare Regulations. The lender rejected all complaints. The ombudsman found the Section 75 misrepresentation claim was time-barred under the Limitation Act 1980, found no evidence of breach of contract, and found that even if the supplier breached Regulation 14(3), this was not material to Mr K's purchasing decision as the evidence did not demonstrate that the prospect of financial gain was an important motivating factor. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a multi-layered analysis. First, regarding the Section 75 misrepresentation claim, the ombudsman found it was time-barred under the Limitation Act 1980 as more than 6 years had passed since the time of sale (5 November 2017) before the claim was first notified to the lender (16 April 2024). The ombudsman rejected arguments that Section 32 of the Limitation Act applied due to concealment, finding insufficient evidence that the true nature of the product was concealed. Second, regarding the breach of contract claim, the ombudsman found no evidence that the supplier had breached the Purchase Agreement regarding holiday availability, as the terms made clear availability was subject to demand. Third, regarding the Section 140A unfair credit relationship claim, the ombudsman considered whether a possible breach of Regulation 14(3) of the Timeshare Regulations (prohibition on marketing timeshares as investments) rendered the relationship unfair. The ombudsman found that even if such a breach occurred, it was not material to Mr K's decision to purchase because the prospect of financial gain was not an important motivating factor. The ombudsman placed limited weight on Mr K's witness statement due to the 6.5-year delay and risk of recollection being influenced by discussions with others. The ombudsman also found that Mr K knew what he was getting in return for his payments and made an informed choice. Finally, regarding commission arrangements, the ombudsman distinguished the case from the Supreme Court's decision in Hopcraft, Johnson and Wrench, finding no evidence of a fiduciary duty owed by the supplier or that commission arrangements led to disproportionate credit costs.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website