Not upheld: Other regulated complaint complaint against Honeycomb Finance Limited

Decision detail

Summary

Mrs A complained that Honeycomb Finance Limited acted unfairly by declining her Section 75 misrepresentation claim and by being party to an unfair credit relationship under Section 140A of the Consumer Credit Act 1974 in relation to a timeshare loan. Mrs A and Mr E purchased Fractional Club timeshare membership in August 2018 for £18,131, financed by a loan from the lender. Mrs A complained in August 2024, alleging the supplier made fraudulent misrepresentations about investment returns, breached regulations prohibiting marketing timeshares as investments, failed to provide adequate information, and that the lender failed to disclose commission payments. The ombudsman found the Section 75 claim was time-barred under the Limitation Act 1980 as it was made more than six years after the Time of Sale. On the Section 140A claim, the ombudsman found insufficient evidence of misrepresentation or regulatory breach, and that the 2.5% commission was low and properly reflected in the disclosed credit terms. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Mrs A's Section 75 misrepresentation claim was made outside the six-year limitation period (claim made 20 August 2024, more than six years after 15 August 2018 Time of Sale). Regarding Section 140A unfair credit relationship claims, the ombudsman found: (1) no fraudulent misrepresentation was proven as Mrs A provided only generic descriptions without specific detail of what was said; (2) no breach of Regulation 14(3) prohibition on marketing timeshares as investments was established on the balance of probability, noting Mrs A's recollections may have been tainted by the complaints process and Shawbrook judgment; (3) any information failings regarding ongoing costs or property security would not have changed Mrs A's decision to purchase as she wanted the membership and had no alternative means to pay; (4) the 2.5% commission was low and properly disclosed through the credit agreement terms, and unlike the car dealer cases in Hopcraft/Johnson/Wrench, there was no extreme inequality of knowledge or disproportionate impact on credit costs; (5) the supplier did not owe Mrs A a fiduciary duty when acting as credit broker as it was not acting as her agent but as seller of the timeshare.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website