Not upheld: unfair credit relationship under Section 140A CCA; misrepresentation claims under Section 75 CCA; undisclosed commission; alleged breach of Timeshare Regulations complaint against Clydesdale Financial Services Limited trading as Barclays Partner Finance

Decision detail

Summary

Mrs T purchased a Fractional Club timeshare membership in July 2017 for £10,849, financed by a £32,213 credit agreement that consolidated two existing loans. The membership included a share in net sale proceeds of an allocated property. Mrs T complained that the supplier misrepresented the product as an investment in breach of Timeshare Regulations, that the lender failed to uphold Section 75 claims, and that the credit relationship was unfair due to undisclosed commission (£547.62). The ombudsman found that Mrs T's primary motivations were consolidating loans at lower interest rates and removing her ex-partner's name from existing membership, not investment returns. Although the supplier may have breached Regulation 14(3), this breach was not causative of her purchasing decision. The commission was low (1.7% of amount borrowed) and did not create unfairness. No actionable misrepresentations were established. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A claims, finding that regulatory breaches do not automatically create unfairness. The key finding was that Mrs T's purchase decision was not materially motivated by the prospect of financial gain from the property share, but rather by the ability to consolidate loans at lower interest rates and remove her ex-partner's name. Even if the supplier breached Regulation 14(3) by marketing the product as an investment, this breach was not causative of her purchasing decision. The commission of £547.62 was low (1.7% of amount borrowed) and did not create the extreme inequality of knowledge required under Section 140A. Mrs T had adequate information about the cost of credit and could have compared alternatives. The supplier did not owe a fiduciary duty to Mrs T, so claims for dishonest assistance of breach of fiduciary duty failed. No actionable misrepresentations were proven because Mrs T's own testimony was inconsistent and did not establish false statements of existing fact that materially influenced her decision.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website