Veste

Upheld: Other regulated complaint complaint against Shawbrook Bank Limited

Financial Ombudsman decision DRN-6463079 of 2026-06-30T00:00:00+00:00. Other regulated complaint complaint against Shawbrook Bank Limited. Outcome: Upheld.

Decision detail

ReferenceDRN-6463079
Decision date2026-06-30T00:00:00+00:00
FirmShawbrook Bank Limited
ProductOther regulated product
Claim typeOther regulated complaint
OutcomeUpheld
RemedyThe Lender must: (1) Refund all of Mrs Q's repayments under the Credit Agreement, including sums paid to settle the debt, and cancel any outstanding balance; (2) Refund the difference between Fractional Club annual management charges and what Vacation Club annual management charges would have been; (3) Deduct the value of promotional giveaways used and the market value of holidays taken using Fractional Points in excess of Vacation Club Points entitlement (proportionately); (4) Add simple interest at 8% per annum to net repayments from the date each was made until settlement; (5) Remove any adverse credit file information recorded in connection with the Credit Agreement within six years of the decision; (6) If Fractional Club membership is still in place, indemnify Mrs Q and Mr Q against all ongoing liabilities provided they assign or hold the Allocated Property interest in trust for the Lender.

Summary

Mrs Q and Mr Q purchased Fractional Club membership (a timeshare product) for £7,486 on 30 October 2015, financed by a credit agreement with Shawbrook Bank Limited. The membership included holiday rights and a share in an allocated property's net sale proceeds after 19 years. Mrs Q complained that the Supplier marketed and sold the membership as an investment in breach of Regulation 14(3) of the Timeshare Regulations, and that the Lender participated in an unfair credit relationship. The ombudsman found that the Supplier's sales training materials emphasized 'building equity' and financial returns, and that Mrs Q was led to believe the product offered a profit opportunity. Although the contemporaneous paperwork included disclaimers, the practical sales approach breached the prohibition on marketing timeshares as investments. Mrs Q's handwritten statement in a December 2017 claims form confirmed that the promise of profit was material to her purchasing decision. The ombudsman upheld the complaint and ordered the Lender to refund all repayments, management charge differentials, add interest, remove adverse credit information, and indemnify Mrs Q against ongoing liabilities.

The Ombudsman's reasoning

The ombudsman found that although the contemporaneous paperwork included disclaimers, the Supplier's sales training materials and practices demonstrated that Fractional Club membership was marketed and sold to Mrs Q as an investment offering financial returns. The training materials emphasized 'building equity' in property, highlighted that members would receive money back from the property sale after 19 years, and positioned the financial return as a key benefit. The ombudsman rejected a narrow interpretation of 'marketing as an investment' and applied the Government's consultation guidance that there should be no inference that the cost would be recoupable at a profit. Mrs Q's handwritten statement in the December 2017 claims form, combined with the training materials and sales practices, established on the balance of probabilities that the promise of profit was a material factor in her purchasing decision. The ombudsman rejected the Lender's arguments that holidays were the sole motivation, finding that profit and holidays were not mutually exclusive factors. The breach of Regulation 14(3) rendered the credit relationship unfair under Section 140A of the Consumer Credit Act 1974.

How this compares

GroupDecisionsUphold rate
Shawbrook Bank Limited, all decisions2,54517%
Other regulated complaint, all decisions18,99219%
Other regulated product, all decisions51,46230%

Source

Read the original decision on the Financial Ombudsman Service website