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 Regulation 14(3) of the Timeshare Regulations; alleged failure to disclose commission arrangements; alleged failure to provide adequate pre-contractual information complaint against Clydesdale Financial Services Limited trading as Barclays Partner Finance

Decision detail

Summary

Mr C purchased Fractional Club timeshare membership for £16,989 in October 2015, financed by a credit agreement with Barclays Partner Finance. In November 2023, over 8 years later, Mr C complained that the supplier had misrepresented the product as an investment and that the lender was party to an unfair credit relationship. The ombudsman found the Section 75 misrepresentation claim was time-barred. On the Section 140A unfair relationship claim, the ombudsman found that although the supplier may have breached regulations by marketing the timeshare as an investment, this did not render the credit relationship unfair because Mr C's purchase decision was not motivated by the prospect of financial gain from the property share. The ombudsman also rejected arguments about undisclosed commission and inadequate information disclosure, finding no evidence that these factors materially influenced Mr C's decision to proceed with the purchase.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A, finding that regulatory breaches do not automatically render a credit relationship unfair. The key finding was that Mr C's purchase decision was not motivated by the prospect of financial gain from the property share, even if the supplier had breached Regulation 14(3). The ombudsman noted that Mr C knew the cost of borrowing, annual charges, and holiday entitlements, and made a conscious choice. The Section 75 claim was properly rejected as time-barred. The commission arrangements, unlike in Hopcraft/Johnson/Wrench, did not involve the lender paying commission to the supplier, and there was no evidence of a fiduciary duty owed by the supplier to Mr C.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website