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

Decision detail

Summary

Mr and Mrs F purchased a Signature Collection timeshare membership in May 2015 for £8,007, financed by a £20,549 credit agreement from Shawbrook Bank. The membership included a share in net sale proceeds of an allocated property. Over six years later, in June 2021, they complained that the supplier had misrepresented the product as an investment in breach of Timeshare Regulations, that the lender had lent irresponsibly, and that undisclosed commission arrangements rendered the credit relationship unfair. The ombudsman found that while the supplier may have marketed the product as an investment in breach of Regulation 14(3), Mr and Mrs F's unreliable and evolving testimony did not establish that financial gain was a material motivating factor in their purchase. Accordingly, the ombudsman found no actionable misrepresentation, no unfair credit relationship under Section 140A, and no basis to uphold the Section 75 claim, and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A analysis, considering whether any regulatory breach or misrepresentation was causative of the consumers' decision to purchase. While acknowledging that the supplier may have breached Regulation 14(3) of the Timeshare Regulations by marketing the product as an investment, the ombudsman found that Mr and Mrs F's testimony was unreliable due to evolution over time and likely external influence from similar case law. Critically, the ombudsman found no credible evidence that the prospect of financial gain was a material motivating factor in their purchase decision. The ombudsman rejected the argument that regulatory breaches automatically create unfairness, citing Supreme Court authority that such breaches must be considered in the round with their actual impact on the relationship.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website