Not upheld: irresponsible lending, misrepresentation, unfair credit relationship under Section 140A, Section 75 connected lender liability complaint against Clydesdale Financial Services Limited trading as Barclays Partner Finance

Decision detail

Summary

Mrs S purchased fractional timeshare memberships in October 2017 and March 2018, financed through credit agreements with Barclays Partner Finance. She complained that the supplier misrepresented the product as an investment and that the lender was party to an unfair credit relationship. The ombudsman found no actionable misrepresentation, as statements about investment potential were either factually true or honestly held opinions. Although the supplier may have breached regulations prohibiting marketing timeshares as investments, this breach was not material to Mrs S's purchasing decision, as evidence showed her primary motivation was avoiding booking fees and obtaining holiday benefits, not financial gain. The ombudsman rejected all claims under Section 75 and Section 140A of the Consumer Credit Act, finding the lender acted fairly throughout.

The Ombudsman's reasoning

The ombudsman found no factual misrepresentation by the supplier regarding investment potential, guaranteed end dates, exclusivity, or necessity of upgrade. While acknowledging competing evidence on whether the product was marketed as an investment in breach of Regulation 14(3), the ombudsman determined this was not determinative because Mrs S's primary motivation was avoiding booking fees and obtaining holiday benefits, not financial gain. The ombudsman applied the principle from case law that regulatory breaches do not automatically create unfairness under Section 140A; the impact on the complainant must be considered. Mrs S's evidence that she would have purchased regardless of investment representations, combined with her history of multiple timeshare purchases and successful use of the membership, undermined claims of unfair relationship. The ombudsman was cautious about Mrs S's witness statement credibility given its timing (after the Shawbrook judgment) and the four-year delay.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website