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

Decision detail

Summary

Mr and Mrs B purchased two timeshare memberships (Fractional Club in 2014 and Signature Collection in 2015) financed by loans from Shawbrook Bank Limited. In April 2024, approximately 9-10 years later, they complained that the lender acted unfairly by rejecting their Section 75 claim against the supplier and by being party to unfair credit relationships. The complaint alleged the memberships were marketed as investments in breach of Regulation 14(3) of the Timeshare Regulations, that there were undisclosed commissions, undue sales pressure, and inadequate information about costs. The ombudsman found the Section 75 claim was time-barred under the Limitation Act 1980 and that while a regulatory breach may have occurred, the credit relationships were not unfair because the investment element was not a material motivating factor in the complainants' purchasing decisions. The ombudsman rejected the professional representative's generic and templated allegations as not credibly reflecting the complainants' own concerns and found the commission levels (10% and 5.44% of credit charge) were not so extreme as to render the relationships unfair.

The Ombudsman's reasoning

The ombudsman found that the Section 75 claim was time-barred under the Limitation Act 1980 as more than six years had passed between the sales (2014 and 2015) and the complaint (2024). Regarding Section 140A, the ombudsman concluded that while the supplier may have breached Regulation 14(3) of the Timeshare Regulations by marketing the memberships as investments, this did not render the credit relationship unfair because the investment element was not a material motivating factor in Mr and Mrs B's purchasing decision. The ombudsman found they were primarily motivated by upgrading their holiday points and accommodation quality. The commission arrangements, while possibly not adequately disclosed, were not so extreme as to render the relationship unfair, particularly at 10% and 5.44% of the charge for credit, far below the 55% in the Johnson case. The ombudsman rejected the generic and templated nature of the professional representative's allegations as not credibly reflecting Mr and Mrs B's own concerns.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website