Not upheld: Other regulated complaint complaint against Shawbrook Bank Limited

Decision detail

Summary

Mrs J purchased a Fractional Club timeshare membership in October 2017 for £18,418, financed by a £21,268 loan from Shawbrook Bank Limited. The product included fractional holiday points and a share in an allocated property's net sale proceeds. Mrs J's estate complained that the supplier misrepresented the product as an investment and that the lender was party to an unfair credit relationship. The ombudsman found no actionable misrepresentation, no breach of contract, and no unfair credit relationship. Although the supplier may have breached the Timeshare Regulations by marketing the product as an investment, this did not affect Mrs J's purchasing decision, which was not motivated by investment returns. The lender's commission of 3.35% was not high enough to render the relationship unfair, and Mrs J had full knowledge of the loan terms and costs.

The Ombudsman's reasoning

The ombudsman applied a holistic approach to Section 140A analysis, examining the supplier's commercial conduct, information provision, evidence of what was said at sale, inherent probabilities, and commission arrangements. The key finding was that Mrs J's purchase decision was not motivated by the prospect of financial gain from the property share, even if the supplier had breached Regulation 14(3) by marketing the product as an investment. The ombudsman found the commission level (3.35% of loan) was not high enough to render the relationship unfair, particularly given Mrs J had full knowledge of the loan cost and terms. The ombudsman rejected the argument that regulatory breaches automatically create unfairness, requiring instead consideration of their actual impact on the consumer's decision-making.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website