Not upheld: unfair credit relationship (Section 140A CCA), connected lender liability (Section 75 CCA), alleged misrepresentation and breach of contract by supplier, undisclosed commission, breach of Timeshare Regulations complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr and Mrs A purchased Fractional Club timeshare membership in April 2015 for £7,784, financed by a £10,052 loan from Shawbrook Bank Limited. The membership provided holiday rights and a share in net sale proceeds of an allocated property. They later complained that the supplier misrepresented the investment as profitable, that the lender failed to accept Section 75 claims, and that the credit relationship was unfair under Section 140A of the Consumer Credit Act 1974. The ombudsman found that while the supplier may have positioned the membership as an investment (potentially breaching Regulation 14(3) of the Timeshare Regulations), the complainants' primary motivation was holiday access rather than financial gain. The commission of £100.52 (1% of the loan) was not disproportionate. No actionable misrepresentation, breach of contract, or unfair credit relationship was established, and the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to assess fairness under Section 140A, considering the supplier's commercial conduct, information provision, evidence of what was said at sale, inherent probabilities, and any related credit agreement unfairness. The key finding was that although the supplier may have positioned the membership as an investment (potentially breaching Regulation 14(3) of the Timeshare Regulations), this was not material to the complainants' purchasing decision. The evidence showed their primary motivation was the holiday resort location and future holiday prospects, not the prospect of financial gain. The commission arrangement, at only 1% of the borrowed amount, was not disproportionate and would not have deterred the purchase had it been disclosed. The ombudsman found no actionable misrepresentation, no material breach of contract regarding holiday availability, and no unfair credit relationship.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website