Not upheld: Goods and services under S75 complaint against Clydesdale Financial Services Limited

Decision detail

Summary

Mr K purchased Fractional Club timeshare membership for £14,340 in August 2016, financed by a £17,636 credit agreement from Clydesdale Financial Services Limited. Mr K's professional representative complained that the supplier misrepresented the product as an investment in breach of Regulation 14(3) of the Timeshare Regulations, that the lender failed to properly assess affordability, and that the credit relationship was unfair under Section 140A of the Consumer Credit Act 1974. The ombudsman found no actionable misrepresentation, no breach of contract, and no unfair credit relationship. Although the supplier may have breached Regulation 14(3), this did not render the credit relationship unfair because Mr K's purchase was not motivated by the prospect of financial gain. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A analysis, considering the supplier's commercial conduct, information provision, evidence of what was said at sale, inherent probabilities, and any commercial arrangements. The key finding was that Mr K's purchase was not motivated by the prospect of financial gain, even if the supplier had breached Regulation 14(3) by marketing the product as an investment. The ombudsman noted that regulatory breaches do not automatically render a credit relationship unfair; the impact on the complainant must be considered. The ombudsman distinguished this case from the Supreme Court's Johnson decision on commission grounds, finding no comparable unfairness in the commercial arrangements between the lender and supplier.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website