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

Decision detail

Summary

Mr D and Miss D purchased Fractional Club timeshare membership for £14,430 in October 2018, financed through Shawbrook Bank. In November 2023, they complained that the Supplier misrepresented the membership as a guaranteed investment and that Shawbrook was party to an unfair credit relationship. The ombudsman found no actionable misrepresentation because statements about investment potential were honestly held opinions rather than false facts, and the complainants failed to demonstrate they relied on such statements. Regarding the unfair credit relationship claim, the ombudsman found that even if the Supplier breached Regulation 14(3) by marketing the product as an investment, the complainants' purchase was motivated by desire for holiday accommodation rather than investment returns. The modest 5% commission and absence of a fiduciary duty owed by the Supplier further supported the finding that the credit relationship was not unfair. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to assess fairness under Section 140A, considering regulatory breaches do not automatically create unfairness. Regarding Section 75, the ombudsman found no actionable misrepresentation as statements about investment potential were honestly held opinions rather than false statements of fact, and Mr D and Miss D failed to provide sufficient detail about how the Supplier fell short of representations. For Section 140A, the ombudsman found the credit relationship was not unfair because: (1) there was insufficient evidence of coercion or undue influence; (2) even if Regulation 14(3) was breached regarding marketing as an investment, Mr D and Miss D's purchase was not motivated by prospect of financial gain but by desire for holiday accommodation; (3) the commission was modest at 5% and would not have deterred the purchase; (4) the Supplier did not owe a fiduciary duty; and (5) any information failings were not material to their purchasing decision.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website