Not upheld: Goods and services under S75 complaint against Clydesdale Financial Services Limited (trading as Barclays Partner Finance)

Decision detail

Summary

Mr V purchased a Fractional Club timeshare membership in June 2015 for £12,989 using a loan from Clydesdale Financial Services Limited. The membership included a share in an Allocated Property. Mr V complained in November 2023 that the Lender was party to an unfair credit relationship under Section 140A of the Consumer Credit Act 1974, alleging the Supplier marketed the product as an investment in breach of Timeshare Regulations and failed to disclose commission arrangements. The ombudsman found the complaint was made in time but rejected it on the merits, concluding that Mr V's primary motivation was holidays rather than investment returns (as evidenced by sales notes), no commission was paid by the Lender to the Supplier, and regulatory breaches do not automatically render a credit relationship unfair. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found the complaint was made in time under DISP 2.8.2 R (2)(b) because Mr V became aware of the potential mis-selling around July/August 2022 and had three years to complain. However, on the merits, the ombudsman concluded the credit relationship was not unfair because: (1) even if the Supplier breached Regulation 14(3) by marketing the product as an investment, Mr V's primary motivation was holidays, not investment returns, as evidenced by contemporaneous sales notes; (2) Mr V's witness statement was unreliable due to being written after similar case law and containing factual inconsistencies; (3) no commission was paid by the Lender to the Supplier, distinguishing this case from Hopcraft, Johnson and Wrench; and (4) regulatory breaches do not automatically render a credit relationship unfair under Section 140A—the impact on the complainant must be considered holistically.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website