Not upheld: unfair credit relationship under Section 140A CCA; alleged misrepresentation under Section 75 CCA; alleged breach of Regulation 14(3) Timeshare Regulations 2010 complaint against First Holiday Finance Ltd

Decision detail

Summary

Mr and Mrs A purchased a Fractional Club timeshare membership in August 2013 for £20,500 (after trade-in) financed by a £19,900 loan from First Holiday Finance Ltd. Nearly 10 years later, they complained that the membership was sold as an investment in breach of Regulation 14(3) of the Timeshare Regulations, rendering their credit relationship unfair under Section 140A of the Consumer Credit Act 1974. They also claimed the Lender should have accepted their Section 75 misrepresentation claim. The ombudsman found the complaint not upheld, determining that while a regulatory breach was possible, it was not probable given the absence of this allegation from their detailed original complaint, and even if it had occurred, it would not have materially influenced their decision to purchase. The Section 75 claim failed on grounds of price limit and limitation period.

The Ombudsman's reasoning

The ombudsman found that while a breach of Regulation 14(3) was possible, it was not probable that the Fractional Club was marketed as an investment. Critically, Mr and Mrs A did not allege this in their original 9-page Letter of Complaint despite making numerous other detailed allegations, suggesting their recollections were tainted by the subsequent Shawbrook judgment. Even if a breach had occurred, the ombudsman found it would not have materially influenced their decision to purchase, as they would have bought for the additional holiday rights. The ombudsman applied the principle from Plevin that regulatory breaches do not automatically create unfairness under Section 140A; causation and impact must be considered. The Section 75 claim failed on two grounds: the purchase price exceeded £30,000 and the claim was made outside the 6-year limitation period.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website