Not upheld: unfair credit relationship (Section 140A CCA), misrepresentation (Section 75 CCA), undisclosed commission, alleged breach of Timeshare Regulations complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr & Mrs P complained that Shawbrook Bank acted unfairly by participating in an unfair credit relationship and rejecting their Section 75 claim regarding alleged misrepresentations by the timeshare supplier. They purchased Fractional Club membership (asset-backed with a share in an allocated property) for £8,520 financed through the lender. The ombudsman found no actionable misrepresentation - statements about investment potential were honestly held opinions rather than false facts. While a possible breach of the prohibition on marketing timeshares as investments was acknowledged, the ombudsman found this was not causative of the purchase decision, as Mr & Mrs P's own evidence did not establish investment returns as a motivating factor. The small undisclosed commission (1% of loan) would not have changed their purchasing decision, and the lending was affordable. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A analysis, considering whether any alleged breaches or failings materially impacted the credit relationship's fairness. Key findings: (1) No actionable misrepresentation was proven - statements about investment potential and property share were not false statements of existing fact but honestly held opinions; (2) While a breach of Regulation 14(3) (prohibition on marketing timeshares as investments) was possible, it was not causative of the purchase decision - Mr & Mrs P's own evidence did not establish that investment returns motivated their purchase; (3) The commission was small (1% of loan) and would not have deterred the purchase had it been disclosed; (4) Mr & Mrs P were not deprived of information that would have changed their purchasing decision; (5) The lending was affordable based on their employment and earnings; (6) No evidence of pressure or lack of real choice in the purchase decision; (7) Regulatory breaches do not automatically create unfairness under Section 140A - they must be considered in the round with their actual impact on the complainant.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website