Not upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; rejection of Section 75 claims; alleged breach of Timeshare Regulations 2010; undisclosed commission complaint against Clydesdale Financial Services Limited trading as Barclays Partner Finance

Decision detail

Summary

Mr C complained that Clydesdale Financial Services Limited (trading as Barclays Partner Finance) acted unfairly by rejecting his Section 75 claims and being party to an unfair credit relationship when financing his purchase of Fractional Club timeshare membership in May 2015. The complaint, raised in May 2024, alleged the supplier misrepresented the investment potential and breached contract regarding holiday availability, and that the lender failed to disclose commission arrangements. The ombudsman found the Section 75 claim was properly rejected as made outside the 6-year limitation period. While acknowledging the supplier may have breached Regulation 14(3) by marketing membership as an investment, the ombudsman found this was not material because Mr C's own evidence did not demonstrate his purchase was motivated by the prospect of financial gain. The modest commission (2.5% of the borrowed amount) and lack of evidence of a fiduciary duty meant the credit relationship was not unfair under Section 140A. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to assess fairness under Section 140A, considering the supplier's commercial conduct, information provision, evidence of what was said at sale, inherent probabilities, and any regulatory breaches. While acknowledging it was possible the supplier breached Regulation 14(3) by marketing membership as an investment, the ombudsman found this was not determinative. The critical finding was that Mr C's purchase was not motivated by the prospect of financial gain, as evidenced by inaccuracies and omissions in his own statement about why he purchased. The commission arrangement was modest (2.5%) and did not create the extreme inequality of knowledge seen in the Supreme Court's Johnson case. The lender's rejection of the Section 75 claim was fair as it was made outside the 6-year limitation period. No evidence demonstrated the supplier breached contract regarding holiday availability, as Mr C made extensive use of his membership and availability was stated to be subject to demand.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website