Upheld: Goods and services under S75 complaint against Shawbrook Bank Limited
Financial Ombudsman decision DRN-6461505 of 2026-06-29T00:00:00+00:00. Goods and services under S75 complaint against Shawbrook Bank Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6461505 |
|---|---|
| Decision date | 2026-06-29T00:00:00+00:00 |
| Firm | Shawbrook Bank Limited |
| Product | Personal loan |
| Claim type | Goods and services under S75 |
| Outcome | Upheld |
| Remedy | The Lender must: (1) Refund all repayments made by Mr and Mrs S under the Credit Agreement, including sums paid to settle the debt, and cancel any outstanding balance; (2) Refund the difference between annual management charges paid under FC Membership 2 and what would have been paid under FC Membership 1 from the Time of Sale onwards; (3) Deduct the value of any promotional giveaways used and the market value of holidays taken using additional Fractional Points beyond what would have been available under FC Membership 1 (proportionate deduction); (4) Add simple interest at 8% per annum to each net repayment from the date made until settlement; (5) Remove any adverse information recorded on Mr and Mrs S's credit files in connection with the Credit Agreement reported within six years of the decision; (6) If membership is still in place, indemnify Mr and Mrs S against all ongoing liabilities resulting from their Fractional Club membership, provided they assign their Fractional Points to the Lender or hold them on trust for the Lender. |
Summary
Mr and Mrs S purchased Fractional Club timeshare membership for £6,099 financed by Shawbrook Bank Limited on 7 April 2014. The membership provided both holiday rights and a share in the net sale proceeds of an allocated property after 19 years. Mr and Mrs S complained that the Supplier marketed and sold the membership as an investment, contrary to Regulation 14(3) of the Timeshare Regulations, and that the Lender participated in an unfair credit relationship. The Ombudsman upheld the complaint, finding that the Supplier's training materials and sales presentations led consumers to view the product as an investment offering financial gain, which was material to Mr and Mrs S's purchasing decision. Under Section 56 of the CCA, the Supplier's conduct was deemed to be the Lender's conduct, rendering the credit relationship unfair under Section 140A. The Lender must refund all repayments plus interest, refund the difference in management charges, and remove adverse credit file information.
The Ombudsman's reasoning
The Ombudsman found that the Supplier breached Regulation 14(3) of the Timeshare Regulations by marketing and selling Fractional Club membership as an investment. The training materials and sales presentations encouraged sales representatives to emphasize building equity, property ownership, and financial returns over the 19-year term, which collectively led consumers to view the product as an investment opportunity offering the prospect of financial gain. Although disclaimers existed, they would not have dissuaded consumers from viewing the membership as an investment; rather, they suggested the opposite by advising consumers to seek professional investment advice. The Ombudsman concluded that the prospect of financial gain was material to Mr and Mrs S's purchasing decision, as evidenced by their consistent references to profit throughout their complaint and testimony. Under Section 56 of the CCA, the Supplier's conduct during antecedent negotiations was deemed to be conduct by the Lender as statutory agent. This breach, combined with the impact on the fairness of the credit relationship, rendered the relationship unfair under Section 140A of the CCA. The Ombudsman rejected the Lender's arguments that inconsistencies in Mr and Mrs S's testimony undermined their credibility, finding that minor inaccuracies did not materially affect the core evidence regarding the investment marketing.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Shawbrook Bank Limited, all decisions | 2,533 | 17% |
| Goods and services under S75, all decisions | 19,872 | 36% |
| Personal loan, all decisions | 23,643 | 29% |
Source
Read the original decision on the Financial Ombudsman Service website