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) complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr and Mrs S complained that Shawbrook Bank Limited acted unfairly by financing a Fractional Club timeshare purchase that was allegedly misrepresented by the supplier as an investment and by rejecting their Section 75 CCA claim. The timeshare, purchased in June 2015 for £9,278 financed by a £17,192 loan, included a share in an allocated property's net sale proceeds. The ombudsman found no actionable misrepresentation (the investment element was factually accurate), no breach of contract (holiday availability was subject to demand as disclosed), and no unfair credit relationship under Section 140A CCA. Although the supplier may have breached the Timeshare Regulations by marketing the product as an investment, this was not material because Mr and Mrs S's own evidence showed other motivations (premium accommodation, additional holiday points) and they would have purchased regardless. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a multi-layered analysis under Section 75 CCA (misrepresentation and breach of contract) and Section 140A CCA (unfair credit relationship). On Section 75, no actionable misrepresentation was found because: (1) describing the membership as an investment was factually accurate given the property share element; (2) no guarantee of a specific sale date was proven; and (3) insufficient evidence supported claims about exclusivity or being the only exit route. On breach of contract, the ombudsman found holiday availability was subject to demand as stated in the paperwork, and Mr and Mrs S had successfully used their points. Regarding Section 140A, the ombudsman considered whether a potential breach of Regulation 14(3) of the Timeshare Regulations (prohibition on marketing timeshares as investments) rendered the credit relationship unfair. While acknowledging competing evidence on whether the supplier marketed the product as an investment, the ombudsman found this was not material because: (1) Mr and Mrs S's own statement indicated other motivations (premium accommodation, additional points); (2) the statement was provided five years late and potentially influenced by subsequent case law; (3) the evidence suggested they would have purchased regardless; and (4) there was no undisclosed commission at point of sale, distinguishing this from the Supreme Court's Hopcraft/Johnson precedent. The ombudsman rejected other allegations (unjust enrichment, fraudulent misrepresentation, concealment) as lacking evidence of actual loss or misleading conduct.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website