Not upheld: Other regulated complaint complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr and Mrs N purchased a Fractional Club timeshare membership for £8,859 financed by Shawbrook Bank in August 2018. The membership included a share in net sale proceeds of an allocated property. In February 2023, they complained that the supplier misrepresented the product, breached contract, and that the lender participated in an unfair credit relationship. The ombudsman found no actionable misrepresentation due to insufficient evidence of false statements of fact, no breach of contract as Mr and Mrs N retained membership benefits, and no unfair credit relationship. Although the ombudsman acknowledged it was possible the supplier breached Regulation 14(3) by marketing the timeshare as an investment, this was not material to the purchasing decision as Mr and Mrs N's primary motivation was acquiring additional holiday points. The low commission (5%) and pricing transparency did not render the relationship unfair. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found no actionable misrepresentation because Mr and Mrs N provided insufficient detail about what was said and when, and their own testimony focused on holiday benefits rather than investment returns. Regarding breach of contract, there was no evidence they lost the benefits of membership. On the unfair credit relationship claim, the ombudsman found: (1) the lending was not demonstrated to be unaffordable; (2) there was insufficient evidence of pressure preventing free choice; (3) even if Regulation 14(3) was breached, Mr and Mrs N's purchase was motivated by acquiring additional holiday points, not investment returns, so the breach was not material to their decision; (4) the commission was low (5%) and properly disclosed in pricing information, and did not create the extreme inequality of knowledge seen in comparable cases; (5) regulatory breaches do not automatically render credit relationships unfair under Section 140A—the impact on the complainant must be considered.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website