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

Decision detail

Summary

Mr P complained that Shawbrook Bank Limited acted unfairly by being party to an unfair credit relationship and by rejecting his Section 75 claim for misrepresentation regarding three timeshare purchases financed between 2013 and 2016. The ombudsman found no actionable misrepresentation regarding guaranteed end dates, exclusivity, or exit mechanisms. While acknowledging that the supplier may have breached Regulation 14(3) by marketing Fractional Club membership as an investment, the ombudsman concluded this breach was not causative of Mr P's purchases, as his conduct (making 12 total purchases, accumulating points, using rental schemes for fee reduction) demonstrated investment returns were not a material motivating factor. The commission payments were low (1-8.72% of credit charge) and Mr P had adequate pricing information. The ombudsman rejected all grounds of complaint and found the credit relationships were not unfair under Section 140A.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A analysis, considering whether regulatory breaches (potential breach of Regulation 14(3) prohibiting marketing timeshares as investments) rendered the credit relationship unfair. The key reasoning was: (1) regulatory breaches do not automatically create unfairness under Section 140A; (2) causation is relevant—whether the breach materially influenced Mr P's decision to purchase; (3) Mr P's testimony and conduct (making 12 purchases, retaining and accumulating points, using the Wish to Rent scheme for fee reduction rather than profit) did not demonstrate that investment returns were a motivating factor; (4) the commission amounts were low (1-8.72% of charge for credit) compared to the 55% in the Johnson case, and Mr P had pricing information; (5) the Supplier was not acting as Mr P's agent but as seller of contractual rights, without a fiduciary duty; (6) Mr P knew the cost of borrowing, annual charges, and holiday entitlements; (7) the alleged misrepresentations about guaranteed end dates and exclusivity lacked persuasive evidence; (8) even if Regulation 14(3) was breached, Mr P would likely have proceeded with purchases regardless.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website