Not upheld: Goods and services under S75 complaint against Shawbrook Bank Limited

Decision detail

Summary

Miss W complained that Shawbrook Bank Limited acted unfairly by being party to an unfair credit relationship and by rejecting her Section 75 claims for misrepresentation regarding fractional timeshare membership purchased in June 2018 for £19,494 financed by a £22,469 loan. The ombudsman found no actionable misrepresentation, as the supplier's statements about the investment element were factually accurate and Miss W's primary motivation was holiday use, not financial gain. Although the supplier may have breached Regulation 14(3) of the Timeshare Regulations by marketing the product as an investment, this would not have affected Miss W's purchasing decision. The undisclosed commission of 5% (£1,123.45) was not sufficiently high to render the credit relationship unfair under Section 140A, and Miss W had adequate knowledge of the credit terms. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that while the fractional club membership included an investment element (share in allocated property proceeds), this did not constitute an actionable misrepresentation. The supplier's training material left open the possibility of positioning membership as an investment, but Miss W's own testimony and the evidence indicated her primary motivation was holiday use and the ability to charge friends and family, not financial gain from property sale. Even if the supplier had breached Regulation 14(3) by marketing the product as an investment, this would not have rendered the credit relationship unfair because Miss W would have proceeded with the purchase regardless. The undisclosed commission of 5% was not so high as to render the relationship unfair, particularly given Miss W's knowledge of the credit terms and her desire for the product. The debenture and charge were either discharged before the time of sale or executed after, and therefore could not have affected the fairness of the credit relationship at the time of lending.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website