Not upheld: connected lender liability (Section 75 CCA); unfair credit relationship (Section 140A CCA); alleged breach of Timeshare Regulations Regulation 14(3); undisclosed commission; alleged misrepresentation complaint against Tandem Bank Limited

Decision detail

Summary

Mrs G complained that Tandem Bank Limited acted unfairly by being party to an unfair credit relationship and by rejecting her Section 75 claim against the supplier for misrepresentation regarding Fractional Club timeshare membership purchased on 18 October 2018 for £10,956, financed by a £14,173 loan. The professional representative argued the supplier misrepresented the investment value, breached Regulation 14(3) of the Timeshare Regulations by marketing it as an investment, failed to provide adequate information, and that undisclosed commission rendered the relationship unfair. The ombudsman found no actionable misrepresentation in the contractual paperwork, no credible evidence of false oral representations, and that Mrs G's purchase motivation was resort offerings and holiday flexibility rather than investment returns. Even if Regulation 14(3) was breached, it was not material to Mrs G's decision. The commission of £354 (2.5%) was low and would not have deterred borrowing. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A analysis, finding that regulatory breaches do not automatically render credit relationships unfair; consequences must be considered in the round. On Section 75, no actionable misrepresentation was found because: (1) the contractual paperwork made no promises of profit; (2) Mrs G provided no credible evidence of false oral representations about the allocated property's value; (3) the 2024 charge was irrelevant as it occurred six years after the purchase; and (4) Mrs G's motivation for purchase was the resort offerings and holiday flexibility, not investment returns. On Section 140A, the ombudsman found: (1) the lending was not unaffordable; (2) insufficient evidence of pressure from the supplier; (3) even if Regulation 14(3) was breached, Mrs G was not motivated by investment prospects; (4) the commission of £354 (2.5%) was low and would not have deterred Mrs G; (5) the supplier did not owe a fiduciary duty; and (6) Mrs G's late statement (provided 5+ years after sale and after Shawbrook judgment) was given limited weight due to concerns about influence from the judicial review outcome.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website