Not upheld: mis-selling of timeshare product and alleged unfair credit relationship under Section 140A of the Consumer Credit Act 1974; alleged failure to honour Section 75 claim; undisclosed commission; insufficient information disclosure; aggressive sales practices complaint against Shawbrook Bank Limited

Decision detail

Summary

Mrs M and Mr M purchased a Fractional Club timeshare membership for £8,706 in February 2019, financed by a loan from Shawbrook Bank Limited. They subsequently complained through a professional representative, alleging the Supplier had mis-sold the timeshare and that the Lender had participated in an unfair credit relationship by failing to disclose a commission payment and providing insufficient information about costs. The Investigator initially upheld the complaint, but the Lender disagreed. The Ombudsman found no evidence supporting the alleged misrepresentations regarding holiday accommodation, investment status, or membership validity. Applying the Supreme Court's recent judgment on commission disclosure, the Ombudsman found the 5% commission was not sufficiently high to render the relationship unfair, and the consumers clearly wanted the product. No evidence demonstrated that alleged regulatory breaches, unfair terms, or aggressive sales practices caused actual harm or prejudiced the purchasing decision. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the principles from the Supreme Court's Hopcraft, Johnson and Wrench judgment on commission disclosure but found the circumstances distinguishable. The 5% commission was not 'so high' as to indicate unfairness (unlike the 55% in Johnson's case), there was no evidence of concealment of a commercial tie, and the consumers clearly wanted the product and had no alternative means to fund it. Regarding alleged misrepresentations, the ombudsman found insufficient evidence that the Supplier falsely represented the product as an investment (in the sense of guaranteed financial gain), that holiday accommodation would be unavailable, or that the previous membership was invalid. The witness statement did not support these allegations. Regarding unfair terms and aggressive practices, no evidence demonstrated these had caused actual harm or prejudiced the purchasing decision. The ombudsman emphasised that regulatory breaches do not automatically create unfairness under Section 140A and must be considered in the round.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website