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

Decision detail

Summary

Miss L and Mr W financed two timeshare purchases from a supplier through Shawbrook Bank: Fractional Club membership (£15,430) in 2018 and Signature Collection membership (£26,944) in 2019. They complained that the lender was party to an unfair credit relationship and failed to uphold a Section 75 claim for misrepresentation, alleging the products were marketed as investments in breach of the Timeshare Regulations. The ombudsman found no actionable misrepresentation because statements about holiday security and investment potential were factually accurate. Under Section 140A, the ombudsman concluded the relationships were not unfair because the complainants were motivated by holiday rights rather than investment returns, commission levels were modest, and no fiduciary duty was owed. The ombudsman rejected the PR's later argument about encumbered properties as speculative and temporally irrelevant.

The Ombudsman's reasoning

The ombudsman found no actionable misrepresentation under Section 75 because statements about holiday accommodation security and investment potential were not factually untrue. Under Section 140A, the ombudsman concluded the credit relationships were not unfair because: (1) evidence did not demonstrate pressure impaired the complainants' choice; (2) the prospect of financial gain was not a material motivating factor for either purchase; (3) commission levels (5% and 4.6%) were not high enough to render the relationship unfair, especially given the complainants wanted the products and had no alternative means to pay; (4) the supplier did not owe a fiduciary duty; and (5) any regulatory breaches regarding commission disclosure did not automatically create unfairness when considered in the round. The ombudsman rejected the PR's new argument about encumbered properties as speculative and unsupported, noting the charges were not in place at the times of sale.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website