Not upheld: Irresponsible lending complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr W and Miss L purchased timeshare fractional club membership for £13,298 financed by Shawbrook Bank Limited in April 2017. They subsequently complained that the supplier had misrepresented the investment, that the lender had acted irresponsibly in lending, and that the credit relationship was unfair under Section 140A CCA. The ombudsman rejected all grounds: finding no material misrepresentation by the supplier, determining that Section 140A claims could not be brought against the original lender as the debt had been sold, and concluding that the lender's affordability checks were proportionate given the loan characteristics and the absence of financial distress indicators on the credit check at the time of lending. The complaint was not upheld and no compensation was awarded.

The Ombudsman's reasoning

The ombudsman found no factual and material misrepresentation by the supplier regarding investment value, property appreciation, resale potential, or holiday access, as the claims lacked sufficient colour, context, and supporting evidence. Regarding Section 140A claims, the ombudsman determined that as the debt had been sold, the original lender was no longer the creditor and therefore could not be subject to unfair relationship claims. On affordability, the ombudsman concluded the lender's checks were proportionate given the loan characteristics (relatively low repayments despite large amount and ten-year term), low existing credit commitments, and no apparent financial distress on the credit check. The ombudsman rejected arguments based on alleged Spanish law breaches, noting the absence of Spanish court judgments against the supplier and that the Purchase Agreement was governed by English law.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website