Not upheld: unfair credit relationship (Section 140A) and Section 75 claim handling complaint against Clydesdale Financial Services Limited (trading as Barclays Partner Finance)

Decision detail

Summary

Mr A purchased a timeshare membership for £12,494 on 23 December 2014, financed through a credit agreement with Clydesdale Financial Services Limited (Barclays Partner Finance). He subsequently experienced difficulties booking holidays and alleged the Supplier had misrepresented the product and breached the purchase agreement. Mr A complained to the Lender on 15 May 2024, raising concerns about an unfair credit relationship under Section 140A of the Consumer Credit Act 1974 and making Section 75 claims for misrepresentation and breach of contract. The Lender rejected all aspects of the complaint. The Ombudsman found the Section 140A complaint was out of jurisdiction as it was made outside the three-year time limit (Mr A should have complained by 24 March 2023). The Section 75 claims were rejected on merits as both the misrepresentation and breach of contract claims were time-barred under the Limitation Act 1980, having been made more than six years after the Time of Sale.

The Ombudsman's reasoning

The Ombudsman found that the Section 140A complaint about unfair credit relationship was made outside the time limits set by DISP 2.8.2 R (2). The six-year limit ran from 24 March 2017 (when the Credit Agreement ended), and the three-year limit from when Mr A ought reasonably to have become aware of cause for complaint. The Ombudsman concluded Mr A should have been aware shortly after purchase when he experienced booking difficulties, meaning he should have complained by 24 March 2023 at the latest. For the Section 75 claims, both the misrepresentation claim and breach of contract claim were time-barred under the Limitation Act 1980 (six-year limitation period from Time of Sale on 23 December 2014). The Lender was therefore entitled to reject these claims as it would be unfair to expect creditors to investigate claims made so long after the liability arose when a limitation defence would be available in court.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website