Not upheld: Goods and services under S75 complaint against Clydesdale Financial Services Limited trading as Barclays Partner Finance (BPF)

Decision detail

Summary

Mrs J purchased a Signature Collection timeshare membership in September 2015 for £20,488, taking out a £9,438 loan with BPF. In December 2023, over eight years later, she complained that BPF was party to an unfair credit relationship and rejected her Section 75 claim for misrepresentation. She alleged the Supplier breached Regulation 14(3) of the Timeshare Regulations by marketing the timeshare as an investment, failed to provide adequate information about ongoing costs and property valuation, and that BPF failed to disclose a £235.95 commission payment. The ombudsman found the Section 75 claim time-barred under the Limitation Act 1980 (raised outside the six-year limitation period). On the Section 140A unfair relationship claim, the ombudsman found that even if regulatory breaches occurred, they did not render the credit relationship unfair because Mrs J's primary motivation for purchase was obtaining better holiday accommodation rather than investment returns, and the low commission level did not suggest unfairness. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A analysis, considering that regulatory breaches do not automatically create unfairness. The key reasoning was: (1) the Section 75 claim was time-barred as it was raised more than six years after the cause of action arose on 29 September 2015; (2) even if the Supplier breached Regulation 14(3) by marketing the timeshare as an investment, this did not render the credit relationship unfair because Mrs J's purchase decision was not materially motivated by the prospect of financial gain—her primary motivation was obtaining better holiday accommodation; (3) the commission of £235.95 (2.50% of amount borrowed) was not so high as to suggest unfairness, particularly when compared to the Supreme Court's findings in Hopcraft, Johnson and Wrench where 55% commission was found problematic; (4) Mrs J had adequate knowledge of what she was purchasing and the costs involved; (5) any information failings regarding ongoing costs or property valuation did not materially impact her decision-making given her primary motivation was holiday accommodation rather than investment returns.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website