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

Decision detail

Summary

Mr S and Mrs S purchased a Fractional Club timeshare membership for £14,112 in December 2019, financed by a £33,917 credit agreement from Shawbrook Bank Limited that consolidated previous timeshare debt. They complained that the supplier misrepresented the product as an investment, breached the contract by failing to secure holiday accommodation, and that the lender participated in an unfair credit relationship by failing to conduct proper affordability checks and by receiving undisclosed commission. The ombudsman rejected all grounds: the statements about investment potential and property share were factually true; holiday availability was subject to demand as disclosed; and even if the supplier breached the Timeshare Regulations prohibition on marketing timeshares as investments, the complainants' purchase was not motivated by investment prospects, making any breach immaterial to the fairness of the credit relationship. The commission of 4.63% of the charge for credit was low and would not have deterred the purchase.

The Ombudsman's reasoning

The ombudsman found no actionable misrepresentation because telling prospective members that Fractional Club membership was an investment offering a share in property proceeds was factually true. Regarding breach of contract, holiday availability was subject to demand as stated in the terms, and the complainants successfully used their fractional points on multiple occasions. For the section 140A unfair credit relationship claim, the ombudsman found that even if the supplier breached Regulation 14(3) by marketing the product as an investment, this would not have rendered the credit relationship unfair because the prospect of financial gain was not an important motivating factor in the complainants' purchase decision. The complainants provided insufficient detail about what was said at the point of sale, their arguments were inconsistent and contradictory, and they failed to explain why they did not use the 14-day cooling-off period. The commission of 4.63% of the charge for credit was low and would not have deterred the purchase. The ombudsman applied the principle that regulatory breaches do not automatically create unfairness under section 140A; the impact on the complainant must be considered in the round.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website