Not upheld: Other regulated complaint complaint against Clydesdale Financial Services Limited trading as Barclays Partner Finance

Decision detail

Summary

The estate of the late Mr K complained that Clydesdale Financial Services Limited (trading as Barclays Partner Finance) acted unfairly by entering into unfair credit relationships under Section 140A of the Consumer Credit Act 1974 and by rejecting a Section 75 connected lender liability claim. Mr K had purchased Fractional Club timeshare membership on two occasions, financed through two credit agreements totaling approximately £74,000. The estate alleged the Supplier misrepresented the product as an investment in breach of Regulation 14(3) of the Timeshare Regulations, failed to provide adequate information, and that the Lender failed to conduct proper affordability checks and failed to disclose commission arrangements. The ombudsman found that while the Supplier may have breached Regulation 14(3), this was not material to Mr K's purchasing decisions, which were motivated by holiday rights and property benefits rather than profit expectations. The lending was affordable, the commission was modest, and there was no evidence of vulnerability or exploitation. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A unfairness, considering that regulatory breaches do not automatically render credit relationships unfair. While the Supplier may have breached Regulation 14(3) by marketing Fractional Club membership as an investment, this was not material to Mr K's purchasing decisions. The ombudsman found that Mr K was motivated by the holiday rights and property share benefits, not by the prospect of financial gain. Mrs K's statement did not establish that Mr K was induced by profit expectations. The lending was affordable at the times of sale, Mr K understood the terms, the commission was modest at 2.5%, and there was no evidence of exploitation or vulnerability affecting his decision-making. The ombudsman rejected the Section 75 misrepresentation claim as the alleged statements reflected the substance of the contracts entered into.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website