Not upheld: irresponsible lending, misrepresentation, unfair credit relationship under Section 140A CCA, Section 75 claim handling complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr B complained that Shawbrook Bank Limited acted unfairly by being party to an unfair credit relationship and by declining his Section 75 claim for misrepresentation regarding a Fractional Club timeshare purchased in 2013. The timeshare was purchased for £10,685 with £8,548 financed by the Lender. Mr B raised his complaint in November 2023, over ten years after the purchase, and after his wife's death in 2016. The ombudsman found the Section 75 claim was time-barred under the Limitation Act 1980 and that the credit relationship was not unfair under Section 140A because Mr B's own testimony indicated the purchase was motivated by the shorter membership term rather than investment returns, and any regulatory breaches did not cause the alleged unfairness. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the Limitation Act 1980, finding that the Section 75 misrepresentation claim was time-barred as it was made more than six years after the cause of action accrued (27 July 2013). Regarding Section 140A, the ombudsman found no unfair credit relationship because: (1) the alleged misrepresentations were not proven to be actionable statements of fact; (2) Mr B's own testimony indicated the purchase was motivated by the shorter membership term and return of some money, not investment potential; (3) even if Regulation 14(3) was breached, causation was not established as Mr and Mrs B would have proceeded regardless; (4) the commission of 8% was not disproportionately high compared to the Supreme Court's guidance; and (5) regulatory breaches do not automatically create unfairness under Section 140A.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website