Not upheld: Other regulated complaint complaint against Tandem Bank Limited

Decision detail

Summary

Mrs M complained that Tandem Bank Limited acted unfairly by being party to an unfair credit relationship and by rejecting her Section 75 claims for misrepresentation and breach of contract relating to a Fractional Club timeshare membership purchased on 27 June 2019 for £13,342, financed by a £29,526 credit agreement. The ombudsman found no actionable misrepresentation regarding the investment element of the membership, as telling prospective members they were investing in a share of a property was factually accurate. Although the ombudsman acknowledged it was possible the supplier breached the prohibition on marketing timeshares as investments under Regulation 14(3) of the Timeshare Regulations, this would not have rendered the credit relationship unfair because Mrs M's own statement provided no evidence that the prospect of financial gain motivated her purchase decision. The ombudsman also found the commission arrangement of £738.15 (2.5% of the amount borrowed) was not disproportionate and that Mrs M had sufficient information to make an informed decision about the credit agreement. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to assess fairness under Section 140A of the Consumer Credit Act 1974, considering the supplier's commercial conduct, information provision, evidence of what was said at the time of sale, inherent probabilities, and commission arrangements. The key finding was that even if the supplier breached Regulation 14(3) by marketing the membership as an investment, this would not have rendered the credit relationship unfair because the evidence did not demonstrate that the prospect of financial gain was a motivating factor in Mrs M's purchase decision. The ombudsman found that Mrs M's own statement made no reference to the investment element being a reason for purchase, and the assertion that she would only have agreed due to promised financial returns was speculative. The commission of 2.5% was found to be low and not disproportionate, and Mrs M had sufficient information about the cost of the credit agreement to make an informed decision. The ombudsman rejected the argument that the cost of holidays was exorbitant as subjective and noted that people make purchasing decisions for various reasons.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website