Not upheld: Other regulated complaint complaint against Clydesdale Financial Services Limited trading as Barclays Partner Finance

Decision detail

Summary

Mr L purchased a Fractional Club timeshare membership in August 2016 for £9,170, financed by a credit agreement with Clydesdale Financial Services Limited. The membership included a share in an allocated property's net sale proceeds. In January 2024, over seven years later, Mr L's professional representative raised complaints alleging misrepresentation, unfair credit relationship under Section 140A, breach of Timeshare Regulations, and undisclosed commission. The ombudsman found the Section 75 misrepresentation claim time-barred and lacking merit on the facts, as statements about holiday availability and investment potential were not factually untrue. On the Section 140A unfair relationship claim, the ombudsman found no actionable misrepresentation, no improper pressure (Mr L had a 14-day cooling-off period), and critically, that Mr L's primary motivation was holiday usage, not financial gain, based on his own statements emphasizing booking difficulties. Even if the supplier breached Regulation 14(3) by marketing as an investment, this breach lacked causative impact. The ombudsman also found the 2.5% commission was low and properly disclosed. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a multi-layered analysis. First, on Section 75 misrepresentation claims, the ombudsman found the claim time-barred under the Limitation Act 1980 (more than six years after 4 August 2016). Second, even on the merits, the ombudsman found no factual and material misrepresentation: statements that membership would secure holiday accommodation and that it constituted an investment were not untrue given the product's actual features. Third, on Section 140A unfair credit relationship claims, the ombudsman examined the supplier's commercial conduct, information provision, sales pressure, and regulatory compliance. The ombudsman found that Mr L's primary motivation was holiday usage, not financial gain, based on his own statements emphasizing booking difficulties as his main complaint. This finding was critical: even if the supplier breached Regulation 14(3) by marketing as an investment, causation was not established because Mr L would have purchased regardless. The ombudsman rejected arguments about pressure, noting Mr L had a 14-day cooling-off period he did not use. On commission, the ombudsman distinguished this case from the Supreme Court's Hopcraft decision, finding the 2.5% commission was low and properly disclosed, and that Mr L would have taken the loan regardless. The ombudsman applied the principle from Plevin that regulatory breaches do not automatically create unfairness; the impact must be assessed in the round.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website