Clydesdale Financial Services Limited · DRN-4800470

The complaint Mr S’s complaint is that Clydesdale Financial Services Limited (trading as Barclays Partner Finance) (‘the Lender’) acted unfairly and unreasonably when deciding against paying his claim under Section 75 of the Consumer Credit Act 1974 (the ‘CCA’) and turning down his complaint that it was party to an unfair debtor-creditor relationship under Section 140A of the CCA. The complaint is only in Mr S’s name as only he was named on the Credit Agreement. But, I will refer to both Mr and Mrs S throughout this decision as the timeshare in question was bought by them jointly. What happened Mr and Mrs S purchased membership of an asset-backed timeshare called the Fractional Property Owners Club (‘Fractional Club membership’) from a timeshare provider (the ‘Supplier’) on 23 September 2015 (the ‘Time of Sale’). They bought 1,280 Fractional Points at a total cost of £26,132. Mr and Mrs S paid for their Fractional Club membership in part by taking finance from the Lender in Mr S’s name. He entered into a 15 year restricted use Fixed Sum Credit Agreement for £6,132 which was repaid in full in February 2017 (the ‘Credit Agreement’). The remaining £20,000 was paid using a loan provided by another lender. Mr and Mrs S could exchange their fractional points for holidays. And, at the end of the projected membership term, they also had a share in the sale proceeds of a property tied to their membership (the ‘Allocated Property’). As their interest in the Allocated Property was limited to a share in its net sale proceeds, they didn’t have any preferential rights to stay in the Allocated Property or use it in any other way. Mr S, using a professional representative (‘the PR’), wrote to the Lender on 28 February 2017 (the ‘Letter of Complaint’) to complain about a number of matters. Mr S says that the Supplier made a number of misrepresentations at the Time of Sale, giving him a claim under Section 75 of the CCA, which are as follows: • They were told at the time of sale that the only way they could exit their membership was to purchase fractional points, but they now know they could have exited the membership in different circumstances. • They were told that they would be guaranteed to exit the fractional membership after a finite number of years, but this isn’t true because it can only be brought to an end if a purchaser for the Allocated Property is found, which isn’t guaranteed. They also said there had been a breach of contract because the documentation stated that Mr and Mrs S would receive the net proceeds of the sale of the Allocated Property. But as there is nothing within the documentation which confirms they own any part of the property, the PR says there is no guarantee any proceeds of the sale would ever be received by Mr and Mrs S. The PR also complained that the debtor-creditor relationship between Mr S and the Lender was unfair under Section 140A of the CCA for the following reasons:

-- 1 of 16 --

• They feel it’s clear that no affordability assessment or credit check was carried out by the Supplier (also acting as the credit intermediary in this case) and so this means the product was offered to Mr S recklessly, making the agreement as a whole unfair. And, that this means the Lender did not meet its obligations under the Lending Code 2006. • The inclusion of a term which allows the Supplier to take possession of the product, but not to factor in the finance agreement, is unfair. They referred to the case of Link Financial Ltd v Wilson where it was found that a contract term that allowed membership to be forfeited for non-payment of maintenance fees was unfair and gave rise to an unfair relationship. • The Supplier having an agreement with the Lender and being paid undisclosed commission by them as part of this agreement, makes the credit relationship between Mr S and the Lender unfair. • Mr S was pressured into making the purchase, breaching the Lending Code, therefore making the credit relationship unfair. The Lender dealt with Mr S’s concerns and issued its final response letter on 6 April 2017, rejecting all points of complaint. Mr S then referred the complaint to the Financial Ombudsman Service on 18 May 2017. Unfortunately, it took some time before an Investigator was able to provide an answer on Mr S’s complaint due to legal proceedings concerning this Service’s approach to two complaints about the sale of similar timeshares. The complaint was then assessed by an Investigator who, having considered the information on file, rejected the complaint on its merits on 13 November 2023. The PR disagreed with the Investigator’s assessment and asked for the matter to be referred to an Ombudsman for a final decision to be made. They provided some further comments and raised new points in this response which had not previously been considered. Namely, that from the witness statement Mr S had provided in February 2017, the PR said it was clear the timeshare had been sold to him as an investment and that this was fundamental to Mr S’s purchase of it. And this therefore also made the credit relationship unfair under Section 140A of the CCA. As agreement on the outcome could not be reached at this stage, the complaint was referred to me to make a decision. The provisional decision Having considered everything that had been submitted, I didn’t think Mr S’s complaint ought to be upheld. I set out my initial thoughts explaining why in a provisional decision (the ‘PD’). Section 75 of the CCA In relation to his complaint that the Lender had been unfair in not accepting his claims under Section 75 of the CCA I said, in summary: • In relation to the allegation of being told that entering into the contract with the Supplier was the only way to exit his existing membership, I noted this wasn’t something Mr S had said in his witness statement. So, I didn’t find it likely this was something he and Mrs S were told at the Time of Sale. • In relation to the allegation of breach of contract (there is no guarantee that Mr and Mrs S will receive their share of the proceeds of the sale of the Allocated Property at the end of the membership term), I didn’t think this was made out, as Mr S also hadn’t mentioned being told this in his witness statement. And in any case, any such breach of contract lies in the future and is uncertain. And I had seen nothing in the contractual paperwork which led me to think the Allocated Property will not be put up

-- 2 of 16 --

for sale by the Trustees at the relevant time. So, I didn’t think the Lender had acted unfairly or unreasonably in not accepting Mr S’s claim under Section 75 of the CCA, so it didn’t need to do anything further in this regard. Section 140A of the CCA I then considered whether the Lender had participated in an unfair credit relationship under Section 140A of the CCA. I said, in summary: • Even if no affordability assessment or check was carried out when the Lender decided to lend to Mr S, I wasn’t persuaded this made a difference to the outcome in this case. I said this because there has been no suggestion made or evidence provided that the loan was actually unaffordable for Mr S. • I didn’t think Mr S’s witness statement supported the allegation that he and Mrs S were unduly pressured into their purchase. So, as their own memories of the sale didn’t support an allegation of a sale so pressured it caused them to buy something they otherwise wouldn’t have done, I did not think this created an unfair relationship that requires a remedy. • I didn’t think any of the terms the PR had referred to in the Purchase Agreement created an unfair relationship. I said this because I couldn’t see that the relevant terms were actually operated unfairly against Mr and Mrs S during the time Mr S has been party to the Credit Agreement or after. So even if I were to think such a term was unfair, I couldn’t see that it caused an unfair debtor-creditor relationship that warrants a remedy. • I didn’t think the payment of a commission at the Time of Sale was something which led to an unfair credit relationship, having considered all of the circumstances, including the Lender’s role in the transaction and the typical amounts paid. Nor had I seen any evidence to persuade me that the disclosure of any commission paid played such a significant part in Mr and Mrs S’s decision to purchase the membership that they would have made a different purchasing decision had it been disclosed to them. I then considered the Supplier’s alleged breach of Regulation 14(3) of the Timeshare Regulations. I noted that this wasn’t an allegation that was ever made to the Lender, rather it had been mentioned for the first time since our Investigator issued their view and after the outcome of the judgment handed down in Shawbrook & BPF V FOS1. Having considered Mr S’s statement, I also did not agree it is clear he made any such allegation within it. Rather, I thought he had simply described being told by the Supplier how the membership worked in practice. But I explained that even if I’m wrong about that and there was a breach of Regulation 14(3) at the Time of Sale, I wasn’t persuaded that makes a difference to the outcome of this complaint. And I explained this was because, based on all of the evidence provided, I wasn’t persuaded that any such breach was material to Mr S’s purchasing decision. So, I didn’t think it would have rendered Mr S’s credit relationship with the Lender unfair to him in any event. I also provided my findings on the issue of commission in more detail on 30 December 2025, saying: “In my provisional decision, I noted that one of Mr S’s other concerns related to the alleged 1 R (on the application of Shawbrook Bank Ltd) v Financial Ombudsman Service Ltd and R (on the application of Clydesdale Financial Services Ltd (t/a Barclays Partner Finance)) v Financial Ombudsman Service [2023] EWHC 1069 (Admin) (‘Shawbrook & BPF v FOS’)

-- 3 of 16 --

payment of commission by the Lender to the Supplier for acting as a credit broker and arranging the Credit Agreement. I explained in my provisional decision that I didn’t think any non-disclosure and payment of commission created an unfair relationship in the circumstances of this complaint. But as both sides will already know, the Supreme Court handed down an important judgment on 1 August 2025 in a series of cases concerned with the issue of commission: Johnson v FirstRand Bank Ltd, Wrench v FirstRand Bank Ltd and Hopcraft v Close Brothers Ltd [2025] UKSC 33 (‘Hopcraft, Johnson and Wrench’). In light of this, I’m outlining my thoughts on this issue in this letter so that both parties have the opportunity to respond before I finalise my decision. The legal and regulatory context In considering what is fair and reasonable in all the circumstances of the complaint, I am required under DISP 3.6.4R to take into account: relevant (i) law and regulations; (ii) regulators’ rules, guidance and standards; and (iii) codes of practice; and (where appropriate), what I consider to have been good industry practice at the relevant time. The legal and regulatory context that I think is relevant to this complaint is, in many ways. no different to that shared in several hundred published ombudsman decisions on very similar complaints – which can be found on the Financial Ombudsman Service’s website. And with that being the case, it is not necessary to set out that context in detail here. But I would add that the following regulatory rules/guidance are also relevant: The Consumer Credit Sourcebook (‘CONC’) – Found in the Financial Conduct Authority’s (the ‘FCA’) Handbook of Rules and Guidance Below are the most relevant provisions and/or guidance as they were at the relevant time: • CONC 3.7.3 [R] • CONC 4.5.3 [R] • CONC 4.5.2 [G] The FCA’s Principles The rules on consumer credit sit alongside the wider obligations of firms, such as the Principles for Businesses (‘PRIN’). Set out below are those that are most relevant to this complaint: • Principle 6 • Principle 7 • Principle 8 As previously explained, the PR says that a payment of commission from the Lender to the Supplier at the Time of Sale should lead me to uphold this complaint because, simply put, information in relation to that payment went undisclosed at the Time of Sale. As both sides already know, the Supreme Court handed down an important judgment on 1 August 2025 in a series of cases concerned with the issue of commission: Johnson v FirstRand Bank Ltd, Wrench v FirstRand Bank Ltd and Hopcraft v Close Brothers Ltd [2025] UKSC 33 (‘Hopcraft, Johnson and Wrench’).

-- 4 of 16 --

The Supreme Court ruled that, in each of the three cases, the commission payments made to car dealers by lenders were legal, as claims for the tort of bribery, or the dishonest assistance of a breach of fiduciary duty, had to be predicated on the car dealer owing a fiduciary duty to the consumer, which the car dealers did not owe. A “disinterested duty”, as described in Wood v Commercial First Business Ltd & ors and Business Mortgage Finance 4 plc v Pengelly [2021] EWCA Civ 471, is not enough. However, the Supreme Court held that the credit relationship between the lender and Mr Johnson was unfair under Section 140A of the CCA because of the commission paid by the lender to the car dealer. The main reasons for coming to that conclusion included, amongst other things, the following factors: 1. The size of the commission (as a percentage of the total charge for credit). In Mr Johnson’s case it was 55%. This was “so high” and “a powerful indication that the relationship…was unfair” (see paragraph 327); 2. The failure to disclose the commission; and 3. The concealment of the commercial tie between the car dealer and the lender. The Supreme Court also confirmed that the following factors, in what was a non-exhaustive list, will normally be relevant when assessing whether a credit relationship was/is unfair under Section 140A of the CCA: 1. The size of the commission as a proportion of the charge for credit; 2. The way in which commission is calculated (a discretionary commission arrangement, for example, may lead to higher interest rates); 3. The characteristics of the consumer; 4. The extent of any disclosure and the manner of that disclosure (which, insofar as Section 56 of the CCA is engaged, includes any disclosure by a supplier when acting as a broker); and 5. Compliance with the regulatory rules. From my reading of the Supreme Court’s judgment in Hopcraft, Johnson and Wrench, it sets out principles which apply to credit brokers other than car dealer–credit brokers. So, when considering allegations of undisclosed payments of commission like the one in this complaint, Hopcraft, Johnson and Wrench is relevant law that I’m required to consider under Rule 3.6.4 of the Financial Conduct Authority’s Dispute Resolution Rules (‘DISP’). But I don’t think Hopcraft, Johnson and Wrench assists Mr S in arguing that his credit relationship with the Lender was unfair to him for reasons relating to commission given the facts and circumstances of this complaint. I haven’t seen anything to suggest that the Lender and Supplier were tied to one another contractually or commercially in a way that wasn’t properly disclosed to Mr S, nor have I seen anything that persuades me that the commission arrangement between them gave the Supplier a choice over the interest rate that led Mr S into a credit agreement that cost disproportionately more than it otherwise could have.

-- 5 of 16 --

I acknowledge that it’s possible that the Lender and the Supplier failed to follow the regulatory guidance in place at the Time of Sale insofar as it was relevant to disclosing the commission arrangements between them. But as I’ve said before, the case law on Section 140A makes it clear that regulatory breaches do not automatically create unfairness for the purposes of that provision. Such breaches and their consequences (if there are any) must be considered in the round, rather than in a narrow or technical way. And with that being the case, it isn’t necessary to make a formal finding on that because, even if the Lender and the Supplier failed to follow the relevant regulatory guidance at the Time of Sale, it is for the reasons set out below that I don’t currently think any such failure is itself a reason to find the credit relationship in question unfair to Mr S. In stark contrast to the facts of Mr Johnson’s case, the amount of commission paid by the Lender to the Supplier for arranging the Credit Agreement that Mr S entered into wasn’t high. At £153.30, it was only 2.5% of the amount borrowed and even less than that (2.3%) as a proportion of the charge for credit. So, had he known at the Time of Sale that the Supplier was going to be paid a flat rate of commission at that level, I’m not currently persuaded that he either wouldn’t have understood that or would have otherwise questioned the size of the payment at that time. After all, Mr S wanted Fractional Club membership and had no obvious means of his own to pay for it. And at such a low level, the impact of commission on the cost of the credit he needed for a timeshare he wanted doesn’t strike me as disproportionate. So, I think he would still have taken out the loan to fund his purchase at the Time of Sale had the amount of commission been disclosed. What’s more, based on what I’ve seen so far, the Supplier’s role as a credit broker wasn’t a separate service and distinct from its role as the seller of timeshares. It was simply a means to an end in the Supplier’s overall pursuit of a successful timeshare sale. I can’t see that the Supplier gave an undertaking – either expressly or impliedly – to put to one side its commercial interests in pursuit of that goal when arranging the Credit Agreement. And as it wasn’t acting as an agent of Mr S but as the supplier of contractual rights he obtained under the Purchase Agreement, the transaction doesn’t strike me as one with features that suggest the Supplier had an obligation of ‘loyalty’ to him when arranging the Credit Agreement and thus a fiduciary duty. Overall, therefore, I’m not currently persuaded that the commission arrangements between the Supplier and the Lender were likely to have led to a sufficiently extreme inequality of knowledge that rendered the credit relationship unfair to Mr S. So, given all of the factors I’ve looked at both here and in my provisional decision, and having taken all of them into account, I’m still not persuaded that the credit relationship between Mr S and the Lender under the Credit Agreement and related Purchase Agreement was unfair to him. And as things currently stand, I don’t think it would be fair or reasonable that I uphold this complaint on that basis. Commission: The Alternative Grounds of Complaint While I’ve provisionally found that Mr S’s credit relationship with the Lender wasn’t unfair to him for reasons relating to the commission arrangements between it and the Supplier, two of the grounds on which I came to that conclusion also constitute separate and freestanding complaints to Mr S’s complaint about an unfair credit relationship. So, for completeness, I’ve considered those grounds on that basis here. The first ground relates to whether the Lender is liable for the dishonest assistance of a breach of fiduciary duty by the Supplier because it took a payment of commission from the Lender without telling Mr S (i.e., secretly). And the second relates to the Lender’s

-- 6 of 16 --

compliance with the regulatory guidance in place at the Time of Sale insofar as it was relevant to disclosing the commission arrangements between them. However, for the reasons I set out above, I’m not persuaded that the Supplier – when acting as credit broker – owed Mr S a fiduciary duty. So, the remedies that might be available at law in relation to the payment of secret commission aren’t, in my view, available to him. And while it’s possible that the Lender failed to follow the regulatory guidance in place at the Time of Sale insofar as it was relevant to disclosing the commission arrangements between it and the Supplier, I don’t think any such failure on the Lender’s part is itself a reason to uphold this complaint because, for the reasons I also set out above, I think he would still have taken out the loan to fund his purchase at the Time of Sale had there been more adequate disclosure of the commission arrangements that applied at that time.” So, in summary, I wasn’t persuaded by any of the arguments put forward for why the credit relationship between Mr S and the Lender was unfair to him under Section 140A of the CCA. And I couldn’t see any other reason why it would be fair or reasonable to direct the Lender to compensate Mr S – all of which led me to provisionally conclude that there was no basis on which to uphold the complaint. The Lender accepted my provisional decision. The PR disagreed with my overall conclusion. When doing that, it provided significant submissions at first, but it went on to withdraw them and replace them with more concise submissions - which were primarily concerned with the suggestion that Mr and Mrs S’s Fractional Club membership had been marketed and sold as an investment in contravention of Regulation 14(3) of the Timeshare Regulations. As a result, the complaint was passed back to me for further thought and my Final Decision. The Legal and Regulatory Context The legal and regulatory context that I think is relevant to this complaint has been shared in several hundred published decisions on very similar complaints, as well as in previous correspondence with the parties. So, there’s no need for me to set this out again in detail here. I simply remind the parties that our rules2 say that in considering what is fair and reasonable in all the circumstances of the complaint, I will take into account: relevant (i) law and regulations; (ii) regulators’ rules, guidance and standards; and (iii) codes of practice; and (when appropriate), what I consider to have been good industry practice at the relevant time. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. And having done that afresh, I’m not persuaded to depart from my provisional decision for reasons I’ll now explain. Before I do, I want to make it clear that I recognise that this complaint, when originally made, was wide ranging and made on a number of different grounds. The PR’s more concise response to my provisional decision relates, in the main, to the fairness of the credit relationship between Mr S and the Lender. In particular, they’ve reiterated their allegations about the following points: • The membership being sold to Mr and Mrs S as an investment at the Time of Sale 2 Specifically Rule 3.6.4 in the Dispute Resolution Rules found in the Financial Conduct Authority’s Handbook for Rules and Guidance.

-- 7 of 16 --

and this being fundamental to their decision to purchase. • Undue pressure at the Time of Sale. • Lack of affordability checks. • The payment of commission. They’ve also reiterated allegations of misrepresentations at the Time of Sale, and they’ve now suggested for the first time that the Credit Agreement was arranged by an unauthorised credit broker, the upshot of which is to suggest that the Lender wasn’t permitted to enforce the Credit Agreement. As I haven’t been provided with new arguments and/or evidence to consider in relation to the other points originally raised by the PR, I see no reason to change or add to my conclusions (as set out in the summary of my provisional decision above) in relation to those. I’m focused here on the points the PR has raised in response. Indeed, as I said in my provisional decision, my role as an Ombudsman is to decide what’s fair and reasonable in the circumstances of this complaint – rather than address every single point that’s been made. And with that being the case, while I have read all of the PR’s submissions in full, if I have not commented on, or referred to, something that either party has said, that does not mean I have not considered it. What’s more, it is important to make the point that, in contrast to what might happen in court, neither side to this complaint has a burden of proof that it must discharge. After all, the jurisdiction under which I’m deciding this complaint is inquisitorial rather than adversarial – which means that my findings are made on the balance of probabilities, in light of the evidence and/or arguments from both sides. So, while the PR argues in response to my provisional decision that, under Section 140B(9) of the CCA, it is for the Lender to prove that its credit relationship with Mr S wasn’t unfair simply because he alleges that it was, that fails to understand that the Financial Ombudsman Service deals with complaints rather than causes of action. And, in any event, to suggest that unsubstantiated allegations of fact must be disproved by the Lender if the credit relationship isn’t to be deemed unfair also oversimplifies if not misunderstands the legal position. As HHJ David Cooke said in paragraph 26 of his judgment on Promontoria (Henrico) Ltd v. Gurcharn Samra [2019] EWHC 2327 (Ch): “…the onus is on [the creditor] to show, to the normal civil standard, that the relationship is not unfair because of any of the reasons set out in s 140A(1)(a)-(c). Whether it is so unfair is a matter for the court's overall judgment having regard to all the relevant circumstances and matters, including matters relating (i.e. personal) to the creditor and debtor. This onus on the claimant does not however mean, in my judgement…that where [the borrower alleging an unfair credit relationship] makes allegations of fact on which he relies he does not have the burden of proving them to the normal civil standard. The onus placed on the creditor is as to the relationship between it and the debtor, and does not have the effect that factual allegations made by Mr Samra must be accepted unless they can be positively disproved by contrary evidence.”3 Section 75 of the CCA: the Supplier’s misrepresentations at the Time of Sale It was argued by the PR, when this complaint was first made, that the Supplier 3 As approved by the Supreme Court in Smith v. The Royal Bank of Scotland plc [2023] UKSC 34 – see paragraph 40.

-- 8 of 16 --

misrepresented Fractional Club membership at the Time of the Sale. In response to my provisional decision, the PR has reiterated that the Supplier misrepresented the membership as they told Mr and Mrs S that it was the only way to exit their current one. And, they’ve provided a copy of a questionnaire completed by Mr and Mrs S in August 2017 (addressed in more detail later in this decision) where they’ve highlighted that they say they did have a previous membership and they were forced into the purchase because they were told they didn’t have enough points. But, I fail to see how this supports the alleged misrepresentation about exiting the membership. And, as I already set out in my provisional decision, this isn’t something which is described at all in Mr S’s witness statement. So, the allegation made here simply doesn’t have sufficient weight or evidence to succeed. The PR has also maintained its argument that the Fractional Club was misrepresented at the Time of Sale because the Supplier presented it as having a guaranteed exit after a finite number of years. But as I said in the PD, I’ve seen nothing in the contractual paperwork which leads me to think the Allocated Property will not be put up for sale by the Trustees at the relevant time and that the membership term will not end once the property is sold, or that Mr and Mrs S won’t receive their share of any proceeds from the sale of the Allocated Property which are due to them. And again, Mr S also says little to nothing to persuade me that he and Mrs S were given a guarantee by the Supplier that the Allocated Property would be sold on a specific date when such a promise would have been impossible to stand by given the inevitable uncertainty of selling property some way into the future. The PR also argues in response to my provisional decision that the following representations made by the Supplier were fraudulent: (1) Mr and Mrs S were buying part ownership of a physical property; (2) Fractional Club membership was an investment; (3) The Allocated Property would be sold; and (4) They would receive a share of the net sales proceeds of sale when the Allocated Property is sold. The PR takes that view because it says the evidence suggests that (1) any rights in the Allocated Property are personal rights rather than the rights of ownership, (2) the Lender hasn’t provided any evidence that the Allocated Property exists or that it will sell in the future (making it unlikely that Mr and Mrs S will receive anything from their share in it) and, (3) by the PR’s own calculations, given the initial and ongoing costs of Fractional Club membership, it was never possible to make a profit from the sale of the Allocated Property. The law relating to misrepresentation is a combination of the common law, equity and statute – though, as I understand it, the Misrepresentation Act 1967 didn’t alter the rules as to what constitutes an effective misrepresentation. Summarising the relevant pages in Chitty on Contracts, a material and actionable misrepresentation is an untrue statement of existing fact or law made by one party (or his agent for the purposes of passing on the representation, acting within the scope of his authority) to another party that induced that party to enter into a contract. However, a mere statement of opinion, rather than fact or law, which proves to be unfounded, isn’t a misrepresentation unless the opinion amounts to a statement of fact and it can be proved that the person who gave it did not hold it or could not reasonably have held it. It also needs to be shown that the other party understood and relied on the implied factual misrepresentation.

-- 9 of 16 --

Telling prospective members that they were investing their money because they were buying a fraction or share of one of the Supplier’s properties was not untrue – nor was it untrue to tell prospective members that they would receive some money when the allocated property is sold. After all, Mr and Mrs S’s share in the Allocated Property clearly constituted an investment as it offered them the prospect of a financial return – whether or not, like all investments, that was more than what they first put into it. But as the PR knows, while the term “investment” is not defined in the Timeshare Regulations, it was agreed by the parties in Shawbrook & BPF v FOS that, by reference to the decided authorities, “an investment is a transaction in which money or other property is laid out in the expectation or hope of financial gain or profit” (see paragraph 56). Yet, contrary to what the PR says, none of the contractual paperwork made any promises that a profit might be made, nor did it imply, let alone suggest, that Mr and Mrs S’s share in the net sale proceeds of the Allocated Property would be worth more in real terms in the future than at the Time of Sale. I acknowledge that the Supplier’s training material left open the possibility that the sales representative may have positioned Fractional Club membership as an investment. So, I accept that it’s possible that Fractional Club membership was marketed and sold to Mr and Mrs S as an investment orally. But Mr and Mrs S say little about what was said, by whom and in what circumstances for the purposes of determining whether representations by the Supplier amounted to false statements of existing fact rather than expressions of honestly held opinions about the likely value of the Allocated Property in the future. And while the PR’s own calculations might cast some doubt over the likelihood of the Allocated Property being sold at a profit given the initial and ongoing costs of it to Mr and Mrs S, there isn’t enough evidence to persuade me that the relevant sales representative(s) would have carried out that sort of calculation at the Time of Sale or would otherwise have had information that would indicate that they knew or ought reasonably to have known at the time that any such representations weren’t true. And while the PR might question the exact legal mechanism used to give prospective members an interest in allocated properties, that does not change the fact that the shares of members (like Mr and Mrs S) were clearly the purchase of a share of the net sale proceeds of a specific property in a specific resort. I’m not persuaded, therefore, by the allegations of fraudulent misrepresentation from the PR. And with that being the case, they too aren’t reasons to uphold this complaint and direct the Lender to compensate Mr S. Section 140A of the CCA: did the Lender participate in an unfair credit relationship? I’ve already explained why, in light of the PR’s latest allegations of fraudulent misrepresentation, I’m not persuaded that Fractional Club membership was actionably misrepresented by the Supplier at the Time of Sale. And it is for those reasons that I don’t think the credit relationship between Mr S and the Lender was rendered unfair to him on the basis that membership had been misrepresented.

-- 10 of 16 --

However, there are, of course, other reasons for why the PR argues that the credit relationship in question was unfair. But having reconsidered the entirety of that relationship along with everything that has now been said and/or provided by both sides, I still don’t think the credit relationship between Mr S and the Lender was likely to have been rendered unfair to him for the purposes of Section 140A. When coming to that conclusion, I have looked again at: 1. The standard of the Supplier’s commercial conduct – which includes its sales and marketing practices at the Time of Sale along with any relevant training material; 2. The provision of information by the Supplier at the Time of Sale, including the contractual documentation and disclaimers made by the Supplier; 3. Evidence provided by both parties on what was likely to have been said and/or done at the Time of Sale; 4. The inherent probabilities of the sale given its circumstances; and, when relevant 5. Any existing unfairness from a related credit agreement. I have also reconsidered any commercial (including commission) arrangements between the Lender and the Supplier at the Time of Sale and the disclosure of those arrangements. The PR continues to argue that the Lender’s decision to lend to Mr S was, in essence, irresponsible. And, they’ve again pointed to the aforementioned questionnaire, a copy of which has now been provided, where they say Mr S’s comments within it support that appropriate checks were not completed by the Lender at the Time of Sale. But as already explained, even if I were to find that the Lender failed to do everything it should have when it agreed to lend (and I make no such finding), I would have to be satisfied that the money lent to Mr S was actually unaffordable before also concluding that he lost out as a result, and then consider whether the credit relationship with the Lender was unfair to him for this reason. But from the information provided, I am not satisfied that the lending was unaffordable for Mr S. The PR has also continued to argue that Mr and Mrs S were pressured unduly into their purchase. And, they’ve pointed to another part of the aforementioned questionnaire where they’ve stated they were told by the Supplier that they would have to pay the full price of the promotional holiday if they left the presentation. From what I know of the Supplier’s sales practices, it wasn’t part of the sales presentation that consumers would be charged if they simply decided they did not want to purchase. So, I don’t find this very likely to have been said. And as I already outlined in my PD, Mr S’s own testimony from his witness statement doesn’t in my view suggest any malicious or undue pressure was applied to them during the sale. So, I can’t see that their own memories of the sale support an allegation of a sale so pressured it caused them to buy something they otherwise wouldn’t have done, nor do I think this created an unfair relationship that requires a remedy. The PR has now suggested that the Credit Agreement was arranged by an unauthorised credit broker, the upshot of which is to suggest that the Lender wasn’t permitted to enforce the Credit Agreement. However, it looks to me like Mr S knew, amongst other things, how much he was borrowing and repaying each month, who he was borrowing from and that he was borrowing money to pay for Fractional Club membership. And as the lending doesn’t look like it was unaffordable for him, even if the Credit Agreement was arranged by a broker that didn’t have the necessary permission to do so (which I make no formal finding on), I can’t see why that led to Mr S’s financial loss – such that I can say that the credit relationship in question was unfair on him as a result. And with that being the case, I’m not persuaded that it would be fair or reasonable to tell the Lender to compensate Mr S, even if the loan

-- 11 of 16 --

wasn’t arranged properly. But I’ll turn now to what continues to be the main reason for the PR’s assertion that the credit relationship in question was unfair. The Supplier’s alleged breach of Regulation 14(3) of the Timeshare Regulations There is competing evidence in this complaint as to whether the Fractional Club membership was marketed and/or sold by the Supplier at the Time of Sale as an investment in breach of Regulation 14(3) of the Timeshare Regulations. I continue to acknowledge that it was possible that Fractional Club membership was marketed and sold to Mr and Mrs S as an investment in breach of Regulation 14(3). But it remains unnecessary to make a formal finding on that particular issue for the purposes of my determination on this complaint because a breach of Regulation 14(3) by the Supplier is not itself determinative of the outcome in this complaint unless the impact of such a breach suggested otherwise. The PR disagrees with that and cites the judgment of Mrs Justice Collins Rice in Shawbrook & BPF v FOS in support – saying that she found that the selling of a timeshare as an investment (i.e. in a breach of Regulation 14(3) of the Timeshare Regulations) was, itself, sufficient to create an unfair credit relationship. However, on my reading of Shawbrook & BPF v FOS, Mrs Justice Collins Rice didn’t find that a breach of Regulation14(3) of the Timeshare Regulations was "causative of the legal relations entered into". She recognised that such a breach was "conduct that knocks away the central consumer protection safeguard", but she went on to say that it was the ombudsmen behind the two reviewed decisions who found that such a breach was, given the facts and circumstances of the relevant complaints, causative of the consumers in question purchasing their timeshares and taking out loans to do so. What’s more, the Supreme Court’s judgment in Plevin makes it clear that regulatory breaches do not automatically create unfairness for the purposes of Section 140A. Such breaches and their consequences (if there are any) must be considered in the round, rather than in a narrow or technical way. I am also mindful of what HHJ Waksman QC (as he then was) and HHJ Worster had to say in Carney v NM Rothschild & Sons Ltd [2018] EWHC 958 (‘Carney’) and Kerrigan v Elevate Credit International Ltd [2020] EWHC 2169 (Comm) (‘Kerrigan’) (respectively) on causation. In Carney, HHJ Waksman QC said the following in paragraph 51: “[…] In cases of wrong advice and misrepresentation, it would be odd if any relief could be considered if they did not have at least some material impact on the debtor when deciding whether or not to enter the agreement. […] in a case like the one before me, if in fact the debtors would have entered into the agreement in any event, this must surely count against a finding of unfair relationship under s140A. […]” And in Kerrigan, HHJ Worster said this in paragraphs 213 and 214: “[…] The terms of section 140A(1) CCA do not impose a requirement of “causation” in the sense that the debtor must show that a breach caused a loss for an award of substantial damages to be made. The focus is on the unfairness of the relationship, and the court's approach to the granting of relief is informed by that, rather than by a demonstration that a

-- 12 of 16 --

particular act caused a particular loss. Section 140A(1) provides only that the court may make an order if it determines that the relationship is unfair to the debtor. […] […] There is a link between (i) the failings of the creditor which lead to the unfairness in the relationship, (ii) the unfairness itself, and (iii) the relief. It is not to be analysed in the sort of linear terms which arise when considering causation proper. The court is to have regard to all the relevant circumstances when determining whether the relationship is unfair, and the same sort of approach applies when considering what relief is required to remedy that unfairness. […]” So, it still seems to me that, if I am to conclude that a breach of Regulation 14(3) led to a credit relationship between Mr S and the Lender that was unfair to him and warranted relief as a result, whether the Supplier’s breach of Regulation 14(3) led him to enter into the Purchase Agreement and the Credit Agreement is an important consideration. Indeed, doing that accords with common sense, for if events would have unfolded in the same way whether or not such a pre-contractual breach had occurred, it would be difficult to attribute any particular importance to the breach when deciding whether an unfair debtor- creditor relationship ensued, or whether a remedy is appropriate. If there had been a breach of Regulation 14(3), would it have rendered the credit relationship between Mr S and the Lender unfair to him? Having found that it was possible that the Supplier breached Regulation 14(3) of the Timeshare Regulations at the Time of Sale, I have considered (as I did in my provisional decision) what impact that breach (if there was one) had on the fairness of the credit relationship between Mr S and the Lender under the Credit Agreement and related Purchase Agreement. And on my re-reading of the evidence before me, I’m still not persuaded that the prospect of a financial gain from Fractional Club membership was an important and motivating factor when Mr and Mrs S decided to go ahead with their purchase to the extent that they would have made an entirely different purchasing decision had there not been a breach of Regulation 14(3). I’ll explain. As previously outlined, the PR has argued that Mr S’s statement shows that Fractional Club membership was presented to him as an investment and that was fundamental to his purchasing decision. I noted that this wasn’t an allegation that was ever made to the Lender, rather was mentioned for the first time following the Investigator’s view and the outcome of Shawbrook & BPF V FOS. Having considered Mr S’s statement, I did not agree with the PR’s assertion that he made any such allegation within it, nor that any such breach of Regulation 14(3) at the Time of Sale (if there was one) was material to his purchasing decision. And, I haven’t been provided with anything in response to my provisional decision which changes my view of the statement provided. I note that in their response to my PD, the PR has said that I was wrong to dismiss this allegation simply because ‘precise legal categorisation of investment was not explicitly labelled as such in the earliest stages of complaint’. But, I didn’t reach my conclusion on this point on the basis that it was only articulated in a certain way. Rather, I noted that it wasn’t an allegation which had been made at all (in any fashion), including in Mr S’s witness statement, until a much later date. Again, as I said before, there is simply no suggestion in Mr S’s recollections in this statement that the Supplier led him and Mrs S to believe that the membership would or could make them a financial gain i.e. a profit, nor is there any indication they were induced into the purchase on that basis.

-- 13 of 16 --

Further, from what he’s had to say, it seems their unhappiness with the membership now relates to availability and how many points each holiday used up i.e. how the membership functioned as a holiday product. As I’ve previously said, as part of their response to the provisional decision, the PR has provided a copy of two questionnaires Mr and Mrs S completed. These are signed and dated 19 August 2017, which is several months after they had complained and after they had already referred the complaint to our Service. It seems odd that these questionnaires would have been completed at that time and there has been no explanation as to why Mr and Mrs S were asked to complete these at that particular point. It should also be noted that the completion of these questionnaires appears to have been after the date that the PR suggests Mr S gave his written recollections in his witness statement (although that date remains unclear). And again, this seems odd if, as seems likely, the testimony was based on the answers they gave in the questionnaires. In my view, these questionnaires are leading, in the sense that they ask pre-set, largely tick- box questions, in contrast to Mr S’s witness statement which is his own explanation of his recollections. So, I don’t feel able to place much, if any, weight on what’s been said in them. I acknowledge here, as the PR has highlighted in their response, that in the first questionnaire (labelled ‘S75 client questionnaire’), it asks “were you ever guaranteed a profit at the end of your membership?” and Mr and Mrs S have ticked ‘yes’ in response. If the answer to that question was ‘yes’, the questionnaire then asks “how much profit were you guaranteed to make?”. And, Mr and Mrs S have written a figure of £10,000. But, it’s difficult to understand why this was not included in Mr S’s witness statement. And, there is no colour and context given around this figure in the questionnaire, such as what exactly they were told in this regard and how the Supplier justified such a specific figure to them. It seems inherently unlikely to me that the Supplier would have provided such a specific figure, given the uncertainty of how much the Allocated Property would sell for years into the future. But even if they did, I’ve already acknowledged the possibility that the Supplier sold the membership at the Time of Sale to Mr and Mrs S as an investment. As I’ve already outlined, what I’m considering here is whether any such breach of Regulation 14(3), if it occurred, was material to their purchasing decision. In that regard, I also acknowledge that in the ‘S75 client questionnaire’, it asks the following question with the following answer from Mr and Mrs S: “Q: What were the main reasons for you to enter into a contract with the timeshare owner? A: investment.” But I can also see that Mr and Mrs S had confirmed they had a previous product with the Supplier and they also felt that previous product was mis-sold to them. They were then asked: “Q: If the answer to 2 is ‘yes’, please explain why you purchased a new product despite the previous one having been mis-sold A: changed over as not enough points.” And I can also see the following:

-- 14 of 16 --

“Q: Please explain your experience of the product you purchased from the timeshare owner A: used it once and used all our points for the year.” I acknowledge that Mr and Mrs S have used the word ‘investment’, but there’s little given around this to add any colour and context. It’s difficult to understand why, if this was important to them, this was not mentioned in Mr S’s witness statement. It’s also difficult to reconcile with the rest of what they’ve had to say. As outlined above, it would seem they purchased the new membership in order to have more points (as they didn’t consider they had sufficient points previously), and this was the main reason for their frustration with the membership later on. This also appears to align with what I’ve already explained about Mr S’s witness statement, which in my view is still the best evidence I have of his own recollections, where he’s explained their frustration with the membership was due to how many points each holiday used up. So again, on my reading of all of the evidence before me, the prospect of a financial gain from Fractional Club membership was not an important and motivating factor when Mr and Mrs S decided to go ahead with their purchase. That doesn’t mean they weren’t interested in a share in the Allocated Property. After all, that wouldn’t be surprising given the nature of the product at the centre of this complaint. But as Mr and Mrs S themselves don’t persuade me that their purchase was motivated by their share in the Allocated Property and the possibility of a profit, I still don’t think a breach of Regulation 14(3) by the Supplier was likely to have been material to the decision Mr and Mrs S ultimately made. On balance, therefore, for all the reasons I’ve set out above, I don’t think the credit relationship between Mr S and the Lender was unfair to him even if the Supplier had breached Regulation 14(3). The provision of information by the Supplier at the Time of Sale As I’ve already said, I set out my thoughts in relation to the implications of the Supreme Court’s judgment in Hopcraft, Johnson and Wrench for this complaint on 30 December 2025. I remain satisfied that the Lender has provided me with sufficient information to reach a conclusion about its commercial (including commission) arrangements with the Supplier. I’ve seen nothing in this case that leads me to think that the information in question is inaccurate. And while I recognise that the PR might disagree with the thoughts I shared on 30 December 2025, it hasn’t offered any evidence and/or arguments that lead me to think that (1) the factors referenced by the Supreme Court have a bearing on the outcome of this complaint given its circumstances or (2) there are any other reasons why the commercial (including commission) arrangements between the Supplier and the Lender rendered the credit relationship between the latter and Mr S under the Credit Agreement and related Purchase Agreement unfair for the purposes of Section 140A. Conclusion Having adopted my provisional findings, and reconsidered the facts and circumstances of this complaint, I still don’t think the Lender acted unfairly or unreasonably when it dealt with Mr S’s section 75 claim. I’m still not persuaded that the Lender was party to a credit relationship with Mr S that was unfair to him for the purposes of section 140A of the CCA. And having taken everything into account, I see no other reason why it would be fair or reasonable for me to direct the Lender to compensate Mr S. My final decision For the reasons set out above, I don’t uphold this complaint.

-- 15 of 16 --

Under the rules of the Financial Ombudsman Service, I’m required to ask Mr S to accept or reject my decision before 23 April 2026. Fiona Mallinson Ombudsman

-- 16 of 16 --