Not upheld: Section 75 Consumer Credit Act claim (misrepresentation); undisclosed commission; unfair credit relationship complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr J and Ms N complained to Shawbrook Bank Limited about a timeshare purchase financed by a £29,704 credit agreement in November 2015, raising a Section 75 claim for alleged misrepresentations by the timeshare supplier and complaining about undisclosed commission. The complaint was not raised until July 2023, more than seven years after the purchase. The ombudsman found the Section 75 claim was time-barred under the Limitation Act 1980 as it was raised outside the six-year limitation period from the date of the credit agreement. The exception for fraud or concealment was rejected as there was no evidence of knowing misrepresentation and the relevant information was contained in contractual documentation provided at sale. The commission complaint was also rejected as no evidence showed the Lender paid commission at the time of sale. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the Limitation Act 1980, which provides a six-year limitation period for claims based on misrepresentation from the date the cause of action arose. The cause of action arose on 3 November 2015 when Mr J and Ms N entered into the agreements. The claim was raised on 12 July 2023, which is outside this six-year window. Section 32 of the Limitation Act 1980 (fraud or concealment exception) was considered but rejected because: (1) the alleged misrepresentations were not all based on fraud or concealment; (2) information about share ownership and property sale was contained in contractual documentation provided at the time of sale; (3) no evidence of the Supplier knowingly or recklessly making false statements; and (4) post-sale documents (2024 Deed of Assignment) did not evidence deliberate concealment at the time of sale. The ombudsman found no evidence that Mr J and Ms N were prevented from raising a claim earlier. Regarding the commission complaint, the ombudsman found no evidence that the Lender paid the Supplier any commission at the time of sale, and therefore no disclosure failure could result in compensation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website