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

Decision detail

Summary

Mr and Mrs P purchased a trial timeshare membership for £4,395 in November 2017 using a loan from Shawbrook Bank Limited. In March 2024, they complained that the Lender was party to an unfair credit relationship and that it wrongly rejected their Section 75 claim for misrepresentation by the timeshare supplier. The ombudsman found the Section 75 claim was time-barred under the Limitation Act as it was made more than six years after the purchase. The ombudsman also found no evidence that the credit relationship was unfair under Section 140A, rejecting allegations that the trial membership was misrepresented as an investment or that availability was misrepresented, and finding that the 5% commission was not sufficiently high or concealed to render the relationship unfair. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that the Section 75 claim was time-barred as it was made more than six years after the Time of Sale (15 November 2017 to 13 March 2024), and it was neither unfair nor unreasonable for the Lender to reject it. Regarding Section 140A, the ombudsman considered the Supplier's sales practices, information provision, and commission arrangements. The ombudsman found no evidence of actionable misrepresentation regarding the trial membership as an investment (as it lacked an investment element) or regarding availability (as the sales documentation clearly stated availability was subject to demand). The commission of 5% was not high enough to render the relationship unfair, particularly when compared to the 55% commission in the Supreme Court's Johnson case. The ombudsman rejected arguments about pressure and lack of value for money as subjective and unsupported by credible evidence.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website