Not upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; rejection of Section 75 claim; alleged breach of Regulation 14(3) of the Timeshare Regulations; undisclosed commission complaint against First Holiday Finance Ltd

Decision detail

Summary

Mr and Mrs H purchased a Fractional Club timeshare membership in March 2018 for £12,749 financed by a loan from First Holiday Finance Ltd. In June 2024, over six years later, they complained that the Supplier had misrepresented the membership and that the credit relationship was unfair under Section 140A of the Consumer Credit Act. They alleged the Supplier breached Regulation 14(3) of the Timeshare Regulations by marketing the membership as an investment. The ombudsman rejected both claims: the Section 75 misrepresentation claim was time-barred under the Limitation Act, and the Section 140A claim failed because even if a breach occurred, it was not a material motivating factor in the purchase decision. The ombudsman found Mr and Mrs H were motivated by holiday rights and pressure, not investment prospects, and was skeptical of the credibility of their recollections given the six-year delay and the timing of the complaint after relevant case law was decided.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A, considering whether regulatory breaches automatically create unfairness (they do not). On the Section 75 claim, the six-year limitation period had expired before notification, making it reasonable for the Lender to reject it. On the Section 140A claim, the ombudsman found that even if the Supplier breached Regulation 14(3) by marketing the membership as an investment, this was not a material motivating factor in Mr and Mrs H's purchase decision. The evidence suggested they were motivated by holiday rights and felt pressured, not by investment prospects. The ombudsman was also skeptical of the credibility of Mr and Mrs H's recollections, given the six-year delay and the timing of the complaint after the Shawbrook judgment. The absence of any commission payment by the Lender to the Supplier distinguished this case from the Supreme Court's Hopcraft decision. No other factors rendered the credit relationship unfair.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website