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

Decision detail

Summary

Mr and Mrs W purchased a Fractional Club timeshare membership in 2016 for €18,456, financed by a £14,950 loan from Shawbrook Bank Limited. In 2019, they complained that the supplier had misrepresented the product as exclusive, guaranteed to exit after a finite period, and as an investment opportunity, and that the lender had acted unfairly by not disclosing commission arrangements and by lending to them through an unauthorized credit broker. The ombudsman found no credible evidence of actionable misrepresentations, determined that even if the supplier had breached the prohibition on marketing timeshares as investments, this was not material to their purchasing decision as they were primarily motivated by holiday benefits, and concluded that the credit intermediary's lack of FCA authorization did not entitle them to redress because the activity occurred in Spain and Tenerife outside UK jurisdiction. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a balance of probabilities test and found that Mr and Mrs W had not provided sufficient evidence to support their allegations of misrepresentation. The ombudsman noted that unsubstantiated allegations do not require the lender to provide proof to rebut them. Regarding the alleged breach of Regulation 14(3) of the Timeshare Regulations (marketing as an investment), the ombudsman found that even if such a breach occurred, it was not material to Mr and Mrs W's purchasing decision, as the evidence suggested they were primarily motivated by holiday benefits rather than investment returns. The ombudsman also found that the credit intermediary's lack of FCA authorisation did not entitle Mr and Mrs W to redress because the intermediary was based in Spain and the activity took place in Tenerife, outside the UK jurisdiction. Regarding commission, the ombudsman distinguished the case from the Supreme Court's Hopcraft, Johnson and Wrench decision, finding no evidence of a commercial tie that was improperly concealed or a commission arrangement that gave the supplier control over interest rates.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website