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

Decision detail

Summary

Mr H complained that BPF acted unfairly by being party to an unfair credit relationship and by rejecting his Section 75 claim for misrepresentation relating to a Signature Collection timeshare purchased on 23 November 2015 for £15,767, financed by a £18,547 loan. The complaint was raised on 3 July 2024, more than six years after purchase. The ombudsman found the Section 75 claim was time-barred under the Limitation Act 1980. For the Section 140A unfair relationship claim, the ombudsman found that although the Supplier may have breached Regulation 14(3) by marketing the timeshare as an investment, this did not render the credit relationship unfair because Mr H's purchase was motivated by upgrading his holiday options and increasing his fractional points, not by the prospect of financial gain. The low commission (1.70% of loan amount) and absence of a fiduciary duty owed by the Supplier meant the undisclosed commission did not create unfairness. 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 related unfairness. The key finding was that Mr H's purchase motivation was to upgrade his holiday options and increase his fractional points, not to achieve financial gain from the investment element. The ombudsman found that even if the Supplier breached Regulation 14(3) by marketing the membership as an investment, this did not render the credit relationship unfair because the prospect of profit was not a material factor in Mr H's decision. The commission was low (1.70% of loan amount) and did not create the extreme inequality of knowledge seen in the Supreme Court's Johnson case. Regulatory breaches do not automatically create unfairness; their consequences must be considered in the round.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website