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

Decision detail

Summary

Mr and Mrs F purchased timeshare membership financed by Shawbrook and later complained that the Supplier had misrepresented the product as an investment with guaranteed returns, and that Shawbrook was party to an unfair credit relationship. They also claimed Shawbrook should have paid a Section 75 claim against the Supplier. The ombudsman found no actionable misrepresentation under Section 75 as the investment element was genuine and no specific end date was guaranteed. Under Section 140A, the ombudsman found the credit relationship was not unfair because Mr and Mrs F were not pressured into the purchase, the lending was affordable, their purchase was motivated by holiday benefits rather than investment returns, and the 5% commission was not sufficiently high to render the relationship unfair. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found no actionable misrepresentation under Section 75 because: (1) stating the membership was an investment that could be sold at profit was factually true given the share in the allocated property; (2) there was no guarantee of a specific end date. Under Section 140A, the ombudsman found the credit relationship was not unfair because: (1) Mr and Mrs F were not pressured into the purchase as they had a 14-day cooling off period and provided no credible explanation for not cancelling; (2) the lending was affordable; (3) even if the Supplier breached Regulation 14(3) by marketing as an investment, Mr and Mrs F's purchase was not motivated by prospect of financial gain but by holiday benefits; (4) the commission of 5% was not high enough to render the relationship unfair, particularly given Mr and Mrs F wanted the membership and had no other means to pay; (5) the Supplier did not owe a fiduciary duty to Mr and Mrs F when acting as credit broker.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website