Not upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; connected lender liability under Section 75 of the Consumer Credit Act 1974; alleged breach of Timeshare Regulations Regulation 14(3); undisclosed commission complaint against Clydesdale Financial Services Limited trading as Barclays Partner Finance

Decision detail

Summary

Mrs S complained that Clydesdale Financial Services Limited (trading as Barclays Partner Finance) acted unfairly by entering into an unfair credit relationship and refusing to pay Section 75 claims relating to her 2015 purchase of Signature Collection timeshare membership financed by a £32,805 credit agreement. She alleged the supplier misrepresented the product as an investment in breach of Timeshare Regulations, failed to conduct proper affordability checks, applied pressure during the sales process, and that undisclosed commission rendered the relationship unfair. The ombudsman found the Section 75 claim time-barred under the Limitation Act 1980 (raised more than six years after the cause of action). Although acknowledging a possible breach of Regulation 14(3), the ombudsman found Mrs S's purchase was motivated by holiday rights and loan consolidation, not investment prospects, and that the low commission (2.5%) with full price disclosure did not render the relationship unfair. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A, considering whether regulatory breaches automatically created unfairness (they do not). The key finding was that Mrs S's purchase was not motivated by the prospect of financial gain from the property share, despite the possible breach of Regulation 14(3). The commission was low (2.5%) compared to the 55% in the Johnson case, and Mrs S had full information about the cost of credit and what she was purchasing. The ombudsman found no fiduciary duty owed by the supplier to Mrs S, and no evidence that the credit relationship was unfair in substance.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website