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

Decision detail

Summary

Mr A purchased a Fractional Club timeshare membership in May 2018 for £30,094, financing £12,913 through Tandem Bank Limited. The membership included a share in net sale proceeds of an allocated property. Over six years later, in December 2024, Mr A complained that the lender acted unfairly by rejecting his section 75 claim for misrepresentation and breach of contract, and by being party to an unfair credit relationship under section 140A of the Consumer Credit Act 1974. The ombudsman found the misrepresentation claim time-barred under the Limitation Act 1980, no breach of contract established, and the credit relationship not unfair because, even if the supplier breached the prohibition on marketing timeshares as investments, Mr A's purchase was not motivated by financial gain. The ombudsman rejected all grounds of complaint and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman applied a multi-layered analysis. First, section 75 misrepresentation claims were time-barred under the Limitation Act 1980 as they were made over six years after the purchase, with no persuasive evidence of concealment or fraud to extend the limitation period. Second, no breach of contract was established as the purchase agreement stated holiday availability was subject to demand, and Mr A successfully used his fractional points. Third, regarding section 140A unfairness, the ombudsman found: (1) the lending was affordable based on Mr A's employment and earnings; (2) Mr A was not pressured into the purchase as evidenced by his lack of detailed recollection, his failure to use the 14-day cooling-off period, and the sales notes; (3) while a possible breach of Regulation 14(3) existed (marketing as investment), this was not causative of the purchase decision as Mr A provided no persuasive evidence that financial gain was a motivating factor; (4) the commission of 2.5% was low and would not have deterred the purchase; (5) Mr A was provided with information on the price, interest rate, fees, APR and monthly repayments; and (6) any information failings regarding ongoing costs or key information would not have changed his purchasing decision given that financial gain was not his primary motivation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website