Not upheld: Goods and services under S75 complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr O purchased a Fractional Club timeshare membership in June 2016 for £12,795, financed by a £28,069 loan from Shawbrook Bank Limited. The timeshare included a share in an allocated property's net sale proceeds. In September 2024, over eight years later, Mr O complained that the lender should have accepted his section 75 claim against the supplier for misrepresentation and breach of contract, and that the credit relationship was unfair under section 140A of the Consumer Credit Act 1974. Mr O alleged the supplier had marketed the timeshare as an investment in breach of Timeshare Regulations and that he could not book holidays as promised. The ombudsman found the section 75 claim was time-barred under the Limitation Act 1980 and that the credit relationship was not unfair because Mr O's purchase motivation was holiday access, not investment returns, meaning any breach of the investment marketing prohibition was not causative of his decision to purchase.

The Ombudsman's reasoning

The ombudsman applied the Limitation Act 1980 and found the section 75 claim was time-barred as more than six years had passed since the time of sale (2 June 2016) before Mr O notified the lender (20 September 2024). Section 32(1) of the Limitation Act did not apply as the PR failed to explain sufficiently what acts of concealment or fraud by the supplier would justify extension. Regarding section 140A, the ombudsman found no unfair credit relationship because: (1) Mr O's purchase motivation was holiday access, not investment returns, as evidenced by his own testimony focusing on booking holidays rather than profit; (2) even if the supplier breached Regulation 14(3) by marketing as an investment, this was not causative of Mr O's decision to purchase; (3) no fiduciary duty existed between supplier and Mr O to trigger bribery claims; (4) no commission was paid by the lender to the supplier at time of sale; (5) regulatory breaches do not automatically create unfairness under section 140A and must be considered in the round.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website