Not upheld: unfair credit relationship (Section 140A of Consumer Credit Act 1974), connected lender liability (Section 75 of Consumer Credit Act 1974), alleged misrepresentation, breach of Timeshare Regulations, undisclosed commission complaint against Clydesdale Financial Services Limited trading as Barclays Partner Finance

Decision detail

Summary

Mr M and Mrs M purchased Fractional Club timeshare membership in July 2016 for £9,398, financed by a £13,393 credit agreement from Clydesdale Financial Services Limited trading as Barclays Partner Finance. Mr M complained in April 2023 that the supplier misrepresented the product as an investment, that the credit relationship was unfair under Section 140A of the Consumer Credit Act 1974, and that the lender was liable under Section 75 for the supplier's misrepresentations. The ombudsman found no actionable misrepresentation because statements about investment value and property share were factually true and Mr M's supporting statement lacked credibility due to inconsistencies with documentary evidence and late emergence. The ombudsman also found the credit relationship was not unfair because Mr M's purchase was not motivated by the prospect of financial gain, the commission was low (2.50%) and disclosed, and regulatory breaches do not automatically create unfairness. Accordingly, the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found no actionable misrepresentation because: (1) statements that membership was an investment with a share in property proceeds were factually true; (2) Mr M provided no credible evidence of false statements of existing fact about the property's value; (3) Mr M's statement lacked credibility due to inconsistencies with documentary evidence, absence of holiday-related recollections, and late emergence after relevant case law. Regarding Section 140A unfairness: (1) the prospect of financial gain was not Mr M's motivating factor for purchase; (2) the commission was low (2.50%) and disclosed; (3) the supplier did not owe a fiduciary duty; (4) Mr M had information about costs and could compare options; (5) regulatory breaches do not automatically create unfairness and must be considered in the round with their impact on the complainant. The ombudsman applied principles from Hopcraft, Johnson and Wrench but distinguished the facts as involving a much lower commission and different marketplace than the car finance cases.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website