Not upheld: unfair credit relationship under Section 140A CCA; connected lender liability under Section 75 CCA; alleged breach of Timeshare Regulations 2010 Regulation 14(3); undisclosed commission arrangements complaint against Clydesdale Financial Services Limited (trading as Barclays Partner Finance)

Decision detail

Summary

Mrs R purchased Signature Collection timeshare membership in October 2016 using finance from BPF. The membership was asset-backed, offering a share in property proceeds. In January 2021, Mrs R complained that the supplier misrepresented the investment potential, breached contract by ceasing to trade, and that BPF was party to an unfair credit relationship. The ombudsman found no actionable misrepresentation (the investment element was genuine, though possibly marketed in breach of Regulation 14(3)), no material breach of contract (Mrs R remained a member with rights), and no unfair credit relationship. Critically, Mrs R's written recollections supporting the misrepresentation claim were provided three years late and appeared influenced by subsequent case law, undermining their credibility. The ombudsman distinguished the commission/subsidy arrangement from Hopcraft/Johnson/Wrench, finding it modest and non-determinative. The complaint was rejected in its entirety.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A, considering the entirety of the relationship. On misrepresentation, the ombudsman found that describing Signature Collection as an investment was not factually false, as it genuinely offered a share in property proceeds. Even if Regulation 14(3) of the Timeshare Regulations was breached (marketing as investment), causation was critical: Mrs R provided no credible evidence that the investment prospect was material to her purchasing decision. Her written recollections were provided three years late and appeared potentially influenced by subsequent case law (Shawbrook & BPF v FOS). On the commission/subsidy arrangement, the ombudsman distinguished this case from Hopcraft/Johnson/Wrench: the subsidy was paid by the supplier to BPF (not vice versa), was modest (6.3%), and there was no evidence of artificial price inflation or that disclosure would have changed Mrs R's decision to borrow. The ombudsman rejected the 'bad bargain' argument, citing Plevin: Parliament did not intend Section 140A to reopen transactions merely because they were subjectively poor value.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website