Clydesdale Financial Services Limited · DRN-6256525

The complaint Mr P’s complaint is, in essence, that Clydesdale Financial Services Limited trading as Barclays Partner Finance (the ‘Lender’) acted unfairly and unreasonably by (1) being party to an unfair credit relationship with him under Section 140A of the Consumer Credit Act 1974 (as amended) (the ‘CCA’) and (2) deciding against paying a claim under Section 75 of the CCA. The timeshare in question was bought jointly by Mr and Mrs P, but as the finance used to pay for it was in Mr P’s sole name, he is the only eligible complainant here. I will, however, refer to both Mr and Mrs P where it is appropriate to do so. What happened Mr and Mrs P were existing members of a timeshare provider (the ‘Supplier’) – having purchased a number of products from it over time. But the product at the centre of this complaint is their membership of a timeshare that I’ll call the ‘Fractional Club’ – which they bought on 29 December 2016 (the ‘Time of Sale’). They entered into an agreement with the Supplier to buy fractional points, and after trading in their existing membership they ended up paying £11,496 (the ‘Purchase Agreement’) for their Fractional Club membership. Fractional Club membership was asset backed – which meant it gave Mr and Mrs P more than just holiday rights. It also included a share in the net sale proceeds of a property named on the Purchase Agreement (the ‘Allocated Property’) after their membership term ends. Mr P paid for their Fractional Club membership by taking finance of £11,496 from the Lender (the ‘Credit Agreement’) in his sole name. Mr P – using a professional representative (the ‘PR’) – wrote to the Lender on 6 June 2022 (the ‘Letter of Complaint’) to raise a number of different concerns. As those concerns haven’t changed since they were first raised, and as both sides are familiar with them, it isn’t necessary to repeat them in detail here beyond the summary above. The Lender dealt with Mr P’s concerns as a complaint but was unable to send him a substantive response within the eight weeks required by the regulator, so the PR referred the complaint to the Financial Ombudsman Service. It was assessed by an Investigator who, having considered the information on file, rejected the complaint on its merits. Mr P disagreed with the Investigator’s assessment and asked for an Ombudsman’s decision – which is why it was passed to me. The provisional decision I issued a provisional decision (the ‘PD’) on 5 March 2026, setting out my initial thoughts on the merits of Mr P’s complaint. In the PD I said: “I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint.

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And having done that, I do not currently think this complaint should be upheld. However, before I explain why, I want to make it clear that my role as an Ombudsman is not to address every single point that has been made to date. Instead, it is to decide what is fair and reasonable in the circumstances of this complaint. So, if I have not commented on, or referred to, something that either party has said, that does not mean I have not considered it. Section 75 of the CCA: the Supplier’s misrepresentations at the Time of Sale The CCA introduced a regime of connected lender liability under Section 75 that affords consumers (“debtors”) a right of recourse against lenders that provide the finance for the acquisition of goods or services from third-party merchants (“suppliers”) in the event that there is an actionable misrepresentation and/or breach of contract by the supplier. Certain conditions must be met if the protection afforded to consumers is engaged, including, for instance, the cash price of the purchase and the nature of the arrangements between the parties involved in the transaction. The Lender doesn’t dispute that the relevant conditions are met. But for reasons I’ll come on to below, it isn’t necessary to make any formal findings on those conditions here. It was said in the Letter of Complaint that Fractional Club membership had been misrepresented by the Supplier at the Time of Sale because Mr and Mrs P were told or led to believe by the Supplier that Fractional Club membership: (1) Was an investment that could be sold at a profit when that was not true; (2) had a guaranteed end date when that was not true; and (3) would allow them to access more holidays, when that was not true. However, telling prospective members that Fractional Club membership was an investment that could be sold at a profit was not untrue. After all, a share in an allocated property was, by its very nature, an investment. And it was and is possible that it will be sold at a profit. As I understand it, the sale of the Allocated Property could be postponed in certain circumstances according to the Club Rules. But Mr P says little to nothing to persuade me that he and Mrs P 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. And as regards the allegation that they were told they would be able to access more holidays with the membership, neither Mr P nor the PR have provided any evidence that such a representation was made. And in any event, I can’t see that this, if said, was actually untrue. So, I’m not persuaded that there were representations by the Supplier on the issues in question that constituted false statements of existing fact. So, while I recognise that Mr P and the PR have concerns about the way in which Fractional Club membership was sold by the Supplier, when looking at the claim under Section 75 of the CCA, I can only consider whether there was a factual and material misrepresentation by the Supplier. For the reasons I’ve set out above, I’m not persuaded that there was. And that means that I don’t think that the Lender acted unreasonably or unfairly when it dealt with this particular Section 75 claim.

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Section 140A of the CCA: did the Lender participate in an unfair credit relationship? I’ve already explained why I’m not persuaded that Fractional Club membership was actionably misrepresented by the Supplier at the Time of Sale. But there are other aspects of the sales process that, being the subject of dissatisfaction, I must explore with Section 140A in mind if I’m to consider this complaint in full – which is what I’ve done next. The PR says, for instance, that: 1. Mr and Mrs P were pressured by the Supplier into purchasing Fractional Club membership at the Time of Sale; 2. there was one or more unfair contract terms in the Purchase Agreement; and 3. Fractional Club membership was marketed and sold as an investment in breach of a prohibition on doing so. However, having considered the entirety of the credit relationship between Mr P and the Lender along with all of the circumstances of the complaint, I don’t think the credit relationship between them was likely to have been rendered unfair for the purposes of Section 140A. When coming to that conclusion, and in carrying out my analysis, I have looked at: 1. What I know about the standard of the Supplier’s commercial conduct; 2. The provision of information by the Supplier at the Time of Sale, including the contractual documentation; 3. Evidence provided by both parties on what was likely to have been said and/or done at the Time of Sale; and 4. The inherent probabilities of the sale given its circumstances. I have then considered the impact of these on the fairness of the credit relationship between Mr P and the Lender. The Supplier’s sales & marketing practices at the Time of Sale The PR and Mr P both say that they were subjected to a long and tiring sales process. I acknowledge that Mr and Mrs P may have felt weary after a sales process that went on for a long time, but he says little about what was said and/or done by the Supplier during their sales presentation that made them feel as if they had no choice but to purchase Fractional Club membership when they simply did not want to. They were also given a 14-day cooling off period and they have not provided a credible explanation for why they did not cancel their membership during that time. Mr P has also made several purchases from the Supplier since the Time of Sale, which I find hard to understand if they only made this purchase due to the pressure they were put under. And with all of that being the case, there is insufficient evidence to demonstrate that Mr and Mrs P made the decision to purchase Fractional Club membership because their ability to exercise that choice was significantly impaired by pressure from the Supplier. Overall, therefore, I don’t think that Mr P’s credit relationship with the Lender was rendered unfair to him under Section 140A for the above reason. But there is another reason, perhaps the main reason, why the PR says the credit relationship with the Lender was unfair to him. And that’s the suggestion that Fractional Club membership was marketed and sold to Mr and Mrs P as an investment in breach of prohibition against selling timeshares in that way.

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The Supplier’s alleged breach of Regulation 14(3) of the Timeshare Regulations The Lender does not dispute, and I am satisfied, that Mr and Mrs P’s Fractional Club membership met the definition of a “timeshare contract” and was a “regulated contract” for the purposes of the Timeshare Regulations. Regulation 14(3) of the Timeshare Regulations prohibited the Supplier from marketing or selling Fractional Club membership as an investment. This is what the provision said at the Time of Sale: “A trader must not market or sell a proposed timeshare contract or long-term holiday product contract as an investment if the proposed contract would be a regulated contract.” But the PR says that the Supplier did exactly that at the Time of Sale. The term “investment” is not defined in the Timeshare Regulations. But for the purposes of this provisional decision, and 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. A share in the Allocated Property clearly constituted an investment as it offered Mr and Mrs P the prospect of a financial return – whether or not, like all investments, that was more than what they first put into it. But it is important to note at this stage that the fact that Fractional Club membership included an investment element did not, itself, transgress the prohibition in Regulation 14(3). That provision prohibits the marketing and selling of a timeshare contract as an investment. It doesn’t prohibit the mere existence of an investment element in a timeshare contract or prohibit the marketing and selling of such a timeshare contract per se. In other words, the Timeshare Regulations did not ban products such as the Fractional Club. They just regulated how such products were marketed and sold. To conclude, therefore, that Fractional Club membership was marketed or sold to Mr and Mrs P as an investment in breach of Regulation 14(3), I have to be persuaded that it was more likely than not that the Supplier marketed and/or sold membership to them as an investment, i.e. told them or led them to believe that Fractional Club membership offered them the prospect of a financial gain (i.e., a profit) given the facts and circumstances of this complaint. The PR has set out in the Letter of Complaint that the Supplier sold and/or marketed the Fractional Club to Mr and Mrs P as an investment, and they were told they would get their money back plus a specific profit. But it has said little more about this other than saying that this was a misrepresentation by the Supplier, and the Fractional Club was not an investment as the Supplier described it. And Mr P has said little about this in his written statement. He describes the Time of Sale as follows: “In December 2016, in Tenerife, we converted our points to Fractional points (Contract No: 472187) at a cost of £11,561. We were told this would entitle us to the opportunity to purchase an apartment in Royal Parque [sic] Albatros Tenerife. [The previous owners] have now sold the whole of Royal Parque Albatross, so it would now be impossible to purchase an individual apartment. This meeting was set up by an [Supplier] representative, who met us for a free breakfast, talked to us in excess of 4 hours, and rewarded us for our signatures with some bottles of wine.”

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So, I accept that it is possible that the Supplier breached Regulation 14(3) at the Time of Sale, but having considered all of the evidence submitted, I do not think it is probable that it was sold in this way. There is simply no suggestion here that the membership was described as something that would, or even could, provide Mr and Mrs P with a profit. Mr and Mrs P’s statement hasn’t described how it was to be seen as an investment, other than Mr and Mrs P seem to have understood they were purchasing an apartment, which is actually incorrect. There is certainly nothing that makes me think the Supplier either told Mr and Mrs P that the membership could provide them with a profit, or even implied this was the case. This has simply not been mentioned at all. So, I am not persuaded by the evidence available, that the Fractional Club was sold and/or marketed by the Supplier in a way that would have breached Regulation 14(3) of the Timeshare Regulations. But even if I’m wrong about that, and it was sold to Mr and Mrs P in a way that breached the relevant prohibition as alleged in the Letter of Complaint, I don’t think it makes a difference to the outcome of this complaint anyway. Whether or not there was such a breach is not ultimately determinative of the outcome in this complaint for reasons I will come on to shortly. If there was a breach of Regulation 14(3) would this have rendered the credit relationship between the Lender and Mr P unfair to him? Accepting that it is possible that there was a breach of Regulation 14(3) by the Supplier at the Time of Sale (and as I’ve said, I’m not persuaded that there was) I’ve gone on to consider what impact any breach (if there was one) would have likely had on the fairness of the credit relationship between Mr P and the Lender under the Credit Agreement and related Purchase Agreement. This is because 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. Indeed, it seems to me that, if I am to conclude that a breach of Regulation 14(3) led to a credit relationship between Mr P 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 and Mrs P to enter into the Purchase Agreement and Mr P into the Credit Agreement is an important consideration. As I’ve said, the PR has submitted a statement from Mr and Mrs P. This sets out their entire purchasing relationship with the Supplier, from their initial purchase in 2008, to their last in 2019. What they have said about the Time of Sale is set out above. It is relatively brief and lacks much detail, and does not set out or even suggest that they made the purchase of the Fractional Club for a potential profit. There is very little in the statement which helps me understand why they made this purchase at all. But this differs from their other purchases - for example, when describing their purchase of ‘points’ in May 2016, they have said they bought them to enable them to be able to terminate their membership after five years. And again, when describing a purchase they made at the end of 2019, they say they converted their points to ‘Ceded’ points as they were told they could sell them back after five years for around €20,000. They have said of this purchase: “As we had invested in excess of £80,000 we considered this to be some sort of return for our past investments.”

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This is the only time Mr and Mrs P even suggest they thought they might get something back for their purchases, and this was from a different time and from a different product. They have said nothing at all about their reasons for purchasing the Fractional Club membership. So, on my reading of the evidence before me, I am not persuaded that the prospect of a financial gain from Fractional Club membership was an important and motivating factor when Mr and Mrs P 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 P themselves don’t persuade me that their purchase was motivated by their share in the Allocated Property and the possibility of a profit, I don’t think a breach of Regulation 14(3) by the Supplier (if there was one) was likely to have been material to the decision they ultimately made. On balance, the evidence does not persuade me that the Supplier breached Regulation 14(3) of the Timeshare Regulations at the Time of Sale. But even if I am wrong about that, and the Supplier did market or sell the Fractional Club membership as an investment in breach of Regulation 14(3), I am not persuaded that Mr and Mrs P’s decision to purchase Fractional Club membership at the Time of Sale was motivated by the prospect of a financial gain (i.e., a profit). And for that reason, I do not think the credit relationship between Mr P 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 The PR says that Mr and Mrs P were not given sufficient information at the Time of Sale by the Supplier about the ongoing costs of Fractional Club membership and the availability of holidays. The PR also says that, because some of the terms of the Purchase Agreement weren’t individually negotiated, they were unfair contract terms as were the terms governing the ongoing costs of membership and consequences of non-payment. As I’ve already indicated, the case law on Section 140A makes it clear that it does not automatically follow that regulatory breaches create unfairness for the purposes of the unfair relationship provisions. The extent to which such mistakes render a credit relationship unfair must also be determined according to their impact on the complainant. I acknowledge that it is possible that the Supplier did not give Mr and Mrs P sufficient information, in good time, on the various charges they could have been subject to as Fractional Club members in order to satisfy the requirements of Regulation 12 of the 2010 Timeshare Regulations (which was concerned with the provision of ‘key information’). But even if that was the case, I cannot see that the ongoing costs of membership were applied unfairly in practice. And as neither Mr P nor the PR have persuaded me that they would not have pressed ahead with their purchase had the finer details of the Fractional Club’s ongoing costs been disclosed by the Supplier in compliance with Regulation 12, I cannot see why any failings in that regard are likely to be material to the outcome of this complaint given its facts and circumstances. As for the PR’s argument that there were one or more unfair contract terms in the Purchase Agreement, I can’t see that any such terms were operated unfairly against Mr and Mrs P in practice, nor that any such terms led them to behave in a certain way to their detriment. And with that being the case, I’m not persuaded that any of the terms governing Fractional Club membership are likely to have led to an unfairness that warrants a remedy even if they could be said to be unfair contract terms, which I make no formal finding on.

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Although not raised as a complaint in this case, I have also considered the commission arrangements in place between the Lender and the Supplier at the Time of Sale. This is with a view to considering whether these arrangements caused a breach of fiduciary duty, or the arrangements or non-disclosure of those arrangements led to an unfairness to the credit relationship under Section 140A of the CCA. From my reading of the Supreme Court’s judgment in Johnson v FirstRand Bank Ltd, Wrench v FirstRand Bank Ltd and Hopcraft v Close Brothers Ltd [2025] UKSC 33 (‘Hopcraft, Johnson and Wrench’), it sets out principles which apply to credit brokers other than car dealer–credit brokers. So, when considering the effect of the commission arrangements that were in place, 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, in my view, the ruling in Hopcraft, Johnson and Wrench doesn’t lead me to think Mr P’s 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 P, 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 P into a credit agreement that cost disproportionately more than it otherwise could have. 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 P. 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 P but as the supplier of contractual rights he and Mrs P 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. What’s more, in stark contrast to the facts of Mr Johnson’s case, as I understand it, the Lender didn’t pay the Supplier any commission at the Time of Sale. And with that being the case, even if there were information failings at that time and regulatory failings as a result (which I make no formal finding on), 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 P. Conclusion In conclusion, as things currently stand, I do not think that the Lender acted unfairly or unreasonably when it dealt with the relevant Section 75 claim, and I am not persuaded that

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the Lender was party to a credit relationship with Mr P under the Credit Agreement that was unfair to him for the purposes of Section 140A of the CCA – nor do I see any other reason why it would be fair or reasonable to direct the Lender to compensate Mr P.” The responses to the provisional decision The Lender accepted my provisional decision. The PR disagreed with my overall conclusion. When doing that, it provided comprehensive submissions which, while primarily concerned with the suggestion that Mr and Mrs P’s Fractional Club membership had been marketed and sold as an investment in contravention of a prohibition on selling timeshares in that way, included allegations of fraudulent misrepresentation on the basis that they were told by the Supplier at the Time of Sale that: (1) They were buying ownership of a physical property; (2) Fractional Club membership was an investment; (3) The Allocated Property would be sold; and they would get their money back plus a specific profit. 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 rules1 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 - including: (1) Misrepresentations by the Supplier at the Time of Sale giving Mr P a claim against the Lender under Section 75 of the CCA, which the Lender failed to accept and pay. (2) The Lender being party to an unfair credit relationship under the Credit Agreement and related Purchase Agreement for the purposes of Section 140A of the CCA. However, as the PR’s response to my provisional decision relates, in the main, to (2), as I haven’t been provided with new arguments and/or evidence to consider in relation to the way in which (1) was originally set out, I see no reason to change or add to my conclusions (as set out in my provisional decision above) in relation to them. And, the PR has said it will not challenge my provisional findings in relation to the commission complaint. 1 Specifically Rule 3.6.4 in the Dispute Resolution Rules found in the Financial Conduct Authority’s Handbook for Rules and Guidance.

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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. The PR has stated that it would be unfair to Mr P if I rejected this complaint on the basis that his statement is brief and was not submitted at the time the complaint was originally referred to this Service. It says this as it was following earlier guidance from this Service that it was unnecessary to submit anything other than a complaint form at the outset. But I want to make it clear that I am not saying I am unable to place weight on what Mr P has said in his statement due to when it was submitted – I am saying what he says in it is not persuasive. Section 75 of the CCA: the Supplier’s fraudulent misrepresentations It was argued by the PR, when this complaint was first made, that the Supplier misrepresented Fractional Club membership at the Time of Sale. The reasons for this aspect of this complaint at that time were addressed in my provisional decision. And I see no reason to change or add to those. But in response to my provisional decision, the PR argues that Fractional Club membership was worthless and, as such, the following representations by the Supplier were fraudulent: (1) They were buying ownership of a physical property. (2) Fractional Club membership was an investment. (3) The Allocated Property would be sold; and they would get their money back plus a specific profit. The PR takes that view because it says the evidence suggests that any rights in the Allocated Property are personal rights rather than the rights of ownership, and the Lender hasn’t provided any evidence that the Allocated Property exists or that it will sell in the future, and that the resort has been sold to a new owner (making it impossible for Mr and Mrs P to receive anything from their share in it). 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. 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.

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After all, Mr and Mrs P’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 FOS2 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. But as I said in my provisional decision, although I don’t think it is probable, I accept it is possible 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 P as an investment orally. But Mr P says 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. Indeed, Mr P hasn’t said anything about this at all. So, I am not persuaded that the relevant sales representative(s) told Mr and Mrs P anything in relation to them receiving a profit from the sale of the Allocated Property. 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 P’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 P 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 P and the Lender was rendered unfair to him on the basis that membership had been misrepresented. However, there are, of course, other reasons 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 P 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. What I know about the standard of the Supplier’s commercial conduct; 2. The provision of information by the Supplier at the Time of Sale, including the contractual documentation; 3. Evidence provided by both parties on what was likely to have been said and/or done at the Time of Sale; and 2 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)

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4. The inherent probabilities of the sale given its circumstances. 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 As I said in my provisional decision, 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. And having considered all of the evidence submitted, although I didn’t think it was probable, I acknowledged that it was possible that Fractional Club membership was marketed and sold to Mr and Mrs P as an investment in breach of Regulation 14(3). A view I still hold. But I also thought and still think that it isn’t necessary 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

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approach to the granting of relief is informed by that, rather than by a demonstration that a 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 P 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 and Mrs P to enter into the Purchase Agreement and Mr P into 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 P 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 P and the Lender under the Credit Agreement and related Purchase Agreement. And on my re-reading of the evidence before me, and having considered everything the PR has said in its response to the PD, 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 P decided to go ahead with their purchase, such that they would have made an entirely different purchasing decision had there not been a breach of Regulation 14(3). And I say that because neither the PR nor Mr P have provided any new evidence to support the allegation. The PR has simply set out why it doesn’t agree with my provisional findings. I will, however, address the arguments it has made. The PR has set out that the overall cost of the Fractional Club membership, when including the cost of the credit and the annual maintenance fees over its duration, was actually in excess of £65,000. And it says this means that a single annual holiday using the membership actually costs Mr and Mrs P over £4,300, when the same resorts can be booked by non-members for less than £150. The PR asserts that the sheer disproportionality of the expenditure proves that Mr and Mrs P were induced into the contract by the promise of an eventual financial return from the sale of the Allocated Property, and thus the credit relationship is unfair under Section 140A of the CCA. But I don’t agree with the PR here. The true cost of the membership set out by the PR includes maintenance fees that Mr and Mrs D were always going to have to pay as they were existing members. The actual true cost of the membership was the initial outlay plus the interest they paid over the two months the loan was running before the balance was

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cleared, not over the full length of the agreement. So, the additional expenditure incurred by Mr and Mrs P when they bought the Fractional Club was significantly less than has been set out by the PR. But in any case, it seems likely that Mr P was aware, at the Time of Sale, of the cost of the Fractional Club membership, the interest he was being charged, as well as that they needed to pay maintenance fees every year and the cost of those fees in the first year. And I am not saying that Mr and Mrs P were not interested in their share of the Allocated Property. I am saying that there isn’t any persuasive evidence that the membership was bought as an investment. The PR has stated that whilst Mr P’s statement may be brief, there is detail contained in the Letter of Complaint which was prepared on his behalf. I appreciate that the Letter of Complaint was probably prepared by the PR following a conversation or conversations with Mr and Mrs P – after all, it contains personal information that only Mr and Mrs P would know. However, a letter of complaint (or claim) is not evidence – especially when, as here, it contains bare allegations or a mere summary of the consumer’s allegations. I consider the best evidence to be the testimony from Mr P himself. And as I’ve said, this contains very little detail about how the membership was sold and why it was purchased. And it does not persuade me that any potential breach of Regulation 14(3) of the Timeshare Regulations was material to Mr and Mrs P’s decision to purchase. On balance, therefore, for the reasons I’ve set out above, I don’t think the credit relationship between Mr P 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 In response to my provisional decision, the PR also argues that the Supplier failed to provide Mr and Mrs P with information on the market value of the Allocated Property, title deeds and a full description of the property. This is, in effect, an allegation that the Supplier breached Regulation 12 of the Timeshare Regulations (which is concerned with the provision of key information). However, it isn’t clear what the PR means by a “full description” and has provided no authority for the suggestion the Supplier had to provide Mr and Mrs P with information on the title deeds of the Allocated Property. What’s more, when it comes to the market value of the Allocated Property, I would draw the PR’s attention to what Mrs Justice Collins Rice said in paragraphs 106 and 110 of her judgment in Shawbrook & BPF v FOS: “Both ombudsmen rely on the reference in Sch.1 to 'exact nature and content of the rights' as being the basis for perceiving a legal obligation to provide 'value' information. But first, having regard to the high level of specificity in the Schedule, it is obvious that 'value' information is nowhere specified as such. And second, 'exact nature and content of the rights' is clearly intended, in context, to be a fair and objective identification and description of those rights. 'Value' information may possibly be context for, or commentary on, those rights, but the 'exact nature and content of rights' is something different from information which may (or may not) be relevant to how much they might be worth, now or in the future.” “I do not, and do not need to, go so far as to infer from the Regulations a legal prohibition on the provision of valuation information. My conclusion is that there is no legal obligation, derivable from Reg.12 of the Timeshare Regulations, to provide it, and that the ombudsmen's solution is, in its own terms, distinctly problematic for the regulatory framework. It remains my view that the principal legal consumer-protection control over buying and selling fractional ownership timeshares is the Reg.14(3) prohibition. That

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provision alone makes it hard enough to market a timeshare product containing a bare interest in the proceeds of the deferred sale of real property lawfully, without inviting the fleshing out of the law as positively demanding investor-protection information obligations at the same time.” (My emphasis added) In any event, as I’ve already indicated, the case law on Section 140A makes it clear that it does not automatically follow that regulatory breaches create unfairness for the purposes of the unfair relationship provisions. The extent to which such mistakes render a credit relationship unfair must also be determined according to their impact on the complainant. So, even if it could be said that the Supplier failed to give Mr and Mrs P sufficient information, in good time, in order to satisfy the requirements of Regulation 12 of the Timeshare Regulations for some of the reasons the PR gives, neither Mr P nor the PR have persuaded me that they were deprived of information that would have led them to make a different purchasing decision at the Time of Sale when I’ve already found that the prospect of a financial gain from the Allocated Property was not an important and motivating factor behind their purchase. And with that being the case, even if there were information failings (which I make no formal finding on), I can’t see why that could be said to have rendered the credit relationship in question unfair to Mr P. Both Mr P and the PR have said that the resort in which the Allocated Property is located has been sold to a third party, and it is consequently impossible to buy an apartment. However, I have seen no evidence to support this, and nothing which leads me to think that the Allocated Property is no longer held in trust by independent trustees, and won’t be put up for sale by the trustees at the end of the membership term. It follows that I have no reason to think that Mr and Mrs P won’t receive the share of the net proceeds of the sale to which they are entitled under their Purchase Agreement. 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 P’s Section 75 claim. I’m also still not persuaded that the Lender was party to a credit relationship with Mr P 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 P. My final decision I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr P to accept or reject my decision before 24 April 2026. Chris Riggs Ombudsman

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