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

Decision detail

Summary

Mr and Mrs B complained that Shawbrook Bank Limited acted unfairly by rejecting their section 75 claim and by being party to an unfair credit relationship under section 140A of the Consumer Credit Act 1974 in relation to their 2015 purchase of Signature Club timeshare membership financed through a credit agreement. They alleged the Supplier misrepresented the product as an investment, applied improper pressure, failed to provide sufficient information, and concealed a debenture on the Allocated Suite. The ombudsman found the section 75 claim was time-barred as it was raised more than six years after the purchase. On section 140A, the ombudsman concluded the credit relationship was not unfair because the consumers' primary motivation was to escape their previous 63-year membership lock-in rather than to obtain investment returns, there was no actionable misrepresentation or improper pressure, and any regulatory breaches were not material to the fairness of the relationship. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied section 75 and section 140A of the Consumer Credit Act 1974 to assess the complaint. For section 75, the claim was time-barred under the Limitation Act as it was made more than six years after the Time of Sale. For section 140A, the ombudsman examined whether the credit relationship was unfair by considering: the Supplier's sales practices, information provision, regulatory compliance, and commercial arrangements. The ombudsman found no actionable misrepresentation, no evidence of improper pressure, and concluded that Mr and Mrs B's purchase motivation was to escape their previous membership lock-in rather than to obtain investment returns. Even if the Supplier had breached Regulation 14(3) by marketing the product as an investment, this would not have rendered the credit relationship unfair because it was not material to the consumers' decision. The ombudsman applied the Supreme Court's principles from Hopcraft, Johnson and Wrench regarding commission disclosure but found them inapplicable as no commission was paid at the Time of Sale and there was no evidence of a fiduciary duty owed by the Supplier.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website