Not upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; rejection of Section 75 claim; alleged breach of Regulation 14(3) of the Timeshare Regulations; undisclosed commission arrangements complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr and Mrs G complained that Shawbrook Bank Limited acted unfairly by being party to an unfair credit relationship and by rejecting their Section 75 claim regarding alleged misrepresentations by a timeshare supplier. They purchased Fractional Club membership in February 2016 for £11,760, financed by a £15,165 loan, and raised complaints in April 2022—over six years later. The ombudsman rejected both grounds: the Section 75 claim was time-barred under the Limitation Act, and the credit relationship was not unfair under Section 140A because the lending was affordable, there was no evidence of pressure, any breach of investment marketing regulations did not motivate the purchase, and no commission was paid by the lender to the supplier. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to assess fairness under Section 140A, considering regulatory breaches do not automatically create unfairness. The Section 75 claim was rejected as time-barred under the Limitation Act, with the six-year limitation period running from the Time of Sale (1 February 2016) to when the claim was first raised (14 April 2022). Regarding Section 140A, the ombudsman found: (1) the lending was affordable; (2) insufficient evidence of pressure or impaired choice; (3) even if Regulation 14(3) was breached, Mr and Mrs G's purchase was not motivated by investment prospects; (4) no fiduciary duty existed between the Supplier and Mr and Mrs G; (5) no commission was paid at the Time of Sale; and (6) Mr and Mrs G's late recollections were unreliable and potentially influenced by subsequent litigation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website