Clydesdale Financial Services Limited · DRN-6262148

The complaint Mr A’s complaint is, in essence, that Clydesdale Financial Services Limited (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. Mr A is represented in his complaint by a professional representative (the ‘PR’, or simply ‘PR’). What happened I issued a provisional decision on Mr A’s complaint on 20 August 2025, in which I set out the background to the case and my provisional findings on it. A copy of that provisional decision is appended to, and forms a part of, this final decision, so it’s not necessary to go over the details again. However, in very brief summary: • Mr A bought a timeshare from a timeshare provider (the “Supplier”) on 9 January 2012 (the “Time of Sale”), for £6,500. This was financed by a loan of £5,500 same amount from the Lender (the “Credit Agreement”), with the remainder paid via other means. • The timeshare was essentially an “upgrade” to an existing timeshare already owned by Mr A. Under the terms of the deal, Mr A added 10,000 “points” to his timeshare membership, which could be exchanged for holiday accommodation annually. • Mr A later complained, via a professional representative (“PR”), to the Lender about a number of concerns which included misrepresentations and breaches of contract by the Supplier giving Mr A a claim against the Lender under Section 75 of the CCA, and matters giving rise to an unfair credit relationship between Mr A and the Lender within the meaning of Section 140A of the CCA. • The Lender didn’t initially respond to the complaint, which was then referred to the Financial Ombudsman Service for an independent assessment. In my provisional decision I said I didn’t think the complaint should be upheld. Again, my full findings can be found in the appended provisional decision, but in very brief summary:

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• I didn’t think the timeshare had been misrepresented to Mr A because: o While it had been alleged that the timeshare had falsely been represented as having a guaranteed end date, that appeared to be true, as the contract said it would terminate in 2054. o I thought it inherently unlikely that Mr A had been falsely told by the Supplier that adding 10,000 points to his existing timeshare membership, was means of releasing himself from said membership. • I didn’t think the Supplier was in breach of contract because: o While the PR had complained that the Supplier was in breach of contract because Mr A had not received paperwork to show he owned part of a property, this appeared to be borne of confusion on the PR’s part as to what kind of timeshare Mr A had purchased in 2012. Mr A’s purchase had been of points in a timeshare club which didn’t include a share in a property. Mr A had gone on in later years to purchase timeshares which did come with such a share, but this was not one of them. So I was unable to conclude that a failure on the Supplier’s part to provide paperwork demonstrating Mr A’s ownership, was a breach of contract. • I didn’t think the credit relationship between Mr A and the Lender had been rendered unfair to him by any of the matters the PR and Mr A had mentioned: o While it had been argued that the Lender failed to carry out the right affordability checks before lending to Mr A, I would have had to have been satisfied the loan was actually unaffordable for Mr A, for his complaint to be successful on this basis. No evidence of this had been put forward, and some of Mr A’s comments had suggested he was able to afford the timeshare outright, without even needing to take a loan. Additionally, while Mr A had complained he hadn’t been told about the interest payable on the loan, this had been prominently stated on the Credit Agreement he’d signed. o Mr A had complained that his agreement to the purchase had been secured by pressure from the Supplier, but he’d said little about what specifically had been said or done by the Supplier which had made him feel as though he had no choice but to go ahead. And he’d been given a 14-day cooling off period to reflect on his purchase, which he’d not given a credible reason for not having used to cancel if he had felt pressured. o While the PR had argued the Supplier had marketed the timeshare to Mr A as an investment1, in breach of Regulation 14(3) of the Timeshare Regulations, I thought this was unlikely, and I also thought it unlikely Mr A had relied on any such marketing when making his purchasing decision because: 1 In the sense that it could or would lead to a financial gain or profit for Mr A.

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▪ Mr A had signed under and ticked next to a declaration which directly contradicted what he said he’d been told by the Supplier’s salespeople about being guaranteed to be able to rent out his points. There was no evidence Mr A had questioned this discrepancy at the Time of Sale or after. ▪ It was apparent from another ticked statement on the same declaration form, that it wasn’t possible for Mr A to make a profit from renting out his points. It would also have become apparent within a few months of purchasing, that the Supplier’s alleged statements about making a profit from renting out the points, were untrue. But there was no evidence of Mr A having raised concerns about this in the months and years after his purchase, or even of him attempting to rent out his points. To me, this suggested either that this was not a feature of the product that was promoted to him by the Supplier at the Time of Sale, or that he had little interest in it, or both. ▪ I also thought it was inherently improbable that the Supplier would have made statements which were so easy to verify were incorrect, given the number of cancellations and complaints which would have resulted. Mr A had also complained about the payment of an undisclosed commission by the Lender to the Supplier for arranging the Credit Agreement. At the time of issuing my provisional decision, I didn’t have enough information about the relevant commission arrangements to be able to make findings on this. Once the information became available, and I had been able to consider the judgment in the recent case of Johnson and Wrench -v- FirstRand Bank, and Hopcroft -v- Close Brothers [2025] UKSC 33 (‘Johnson, Wrench and Hopcroft’) I wrote to the parties to say the following: “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’). 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.

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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 A 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. Based on what I’ve seen, 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 A 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. 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 A. 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 A into a credit agreement that cost disproportionately more than it otherwise could have. What’s more, in stark contrast to the facts of Mr Johnson’s case, as I understand it, no payment between the Lender and the Supplier, such as a commission, was payable when the Credit Agreement was arranged 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 commercial 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 A.” So, in summary, I wasn’t persuaded by any of the arguments put forward for why the credit relationship between Mr A 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

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compensate Mr A – all of which led me to provisionally conclude that there was no basis on which to uphold the complaint. The Lender said it agreed with 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, while primarily concerned with the suggestion that Mr A’s timeshare 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 he was told by the Supplier at the Time of Sale that: (1) The timeshare was an investment because he could or would make a profit from renting out his points, which he was guaranteed to be able to do; The PR also repeated its concerns about the pressure Mr A was put under by the Supplier at the Time of Sale, the Lender’s decision to lend being irresponsible, and payment of commission to the Supplier by the Lender or other commercial arrangements between them – albeit with a focus on the Supreme Court’s judgment in Hopcraft v Close Brothers Limited; Johnson v FirstRand Bank Limited; Wrench v FirstRand Bank Limited [2025] UKSC 33 (‘Johnson’). 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 - including: (1) Misrepresentations by the Supplier at the Time of Sale giving Mr A a claim against the Lender under Section 75 of the CCA, which the Lender failed to accept and pay. (2) A breach of contract by the Supplier giving Mr A a claim against the Lender under Section 75 of the CCA, which the Lender failed to accept and pay. (3) 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. 2 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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However, as the PR’s more concise response to my provisional decision relates, in the main, to (3), if I haven’t been provided with new arguments and/or evidence to consider in relation to (1) or (2), I see no reason to change or add to my conclusions (as set out in the summary of my provisional decision above – and the appended document below) in relation to them. Indeed, 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 A 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 misrepresented the timeshare at the Time of the 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 in response to my provisional decision, the PR has to some extent reframed its allegation that the Supplier sold the timeshare to Mr A as an investment, as being a claim about misrepresentation as well as being an example of improper marketing of a timeshare as an investment in breach of Regulation 14(3) of the Timeshare Regulations. The PR’s arguments are essentially unchanged from those it has made previously, but I could summarise them as follows: • Mr A asserts in a witness statement that he was told by the Supplier at the Time of Sale that he was guaranteed to rent out his timeshare points and make a profit doing 3 As approved by the Supreme Court in Smith v. The Royal Bank of Scotland plc [2023] UKSC 34 – see paragraph 40.

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so, over and above his annual management fees. It was likely that such a representation was made by the Supplier. • This representation was false and Mr A relied on it when proceeding with the purchase, as there was no logical reason for him to have made it otherwise. It did not make sense to have bought the product for holidays because it was so expensive and would cost so much over its term. The PR also said it had considered my provisional decision and had the following arguments in relation to my findings on this specific issue: • Just because the timeshare in question was not an asset-backed timeshare (sometimes known as a fractional timeshare) which was linked to a specific property and which came with a share in the sale proceeds of said property, didn’t mean it was impossible for it to have been sold as an investment or for it to have been misrepresented that it was an investment. • Similarly, just because the declaration Mr A had signed at the Time of Sale showed that it was mathematically impossible for him to make any profit by renting out his points, doesn’t mean it was impossible or unlikely that the Supplier had represented the opposite to him – that he would make a profit renting out his points. • The declaration had been buried and hidden within a mass of other paperwork, so it wasn’t right that the Supplier could rely on this to negate any false statements made by its salespeople. It had lacked prominence. • It considered I had not attached sufficient weight to Mr A’s witness statement. The PR also said it was disappointed that the declaration had not been shared with it, or Mr A, prior to me making my provisional decision. It felt this was procedurally improper.4 I’ve carefully considered the PR’s renewed arguments, but I’m still not convinced either that: 1) The Supplier falsely told Mr A that he was guaranteed to rent out his timeshare points and for a profit; or 2) If the Supplier had said that or something like it, then it was something Mr A had relied on when going ahead with his purchase. The reasons for my conclusions in the provisional decision on this point were multifaceted, and PR has not addressed all of the reasons I gave (and has in fact been critical of reasons I didn’t give). While I accept that it’s not impossible that the Supplier made the representations Mr A alleges, that doesn’t mean the representations were made or that Mr A relied on them. I think the evidence still points away from the conclusions the PR invites me to reach, for essentially the same reasons I gave in the appended provisional decision, but to reiterate: • Mr A ticked next to a declaration that was clear in saying that it wasn’t guaranteed he 4 A copy of the declaration (and the sales paperwork in which it appeared) was provided to the PR following the provisional decision, when it came to light that it did not have a copy. PR has since asked for an unredacted copy – but the copy it has received has not been redacted in any way – so there is nothing further that can be sent.

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would be able to rent out his points – contradicting what he says he was told verbally. Mr A also ticked next to a declaration, the implication of which was that it was impossible to a make a profit from renting out his points. I accept that what is committed to paper doesn’t always tell the full story of what happened during a particular sale, but it is certainly a starting point. • Given how easy it was to prove that any representations of the type alleged by Mr A were untrue, and how soon a purchaser would likely discover the truth, it seems inherently unlikely to me that the Supplier would have made such representations, given the number of cancellations and complaints that would result. • Mr A’s post-sale actions were not consistent with those of someone who had made the purchase in reliance on the representations alleged. He had not questioned the apparent discrepancy between what he had been told verbally and what he had signed to say he understood. In the next few months, when it ought to have become apparent he couldn’t rent out the points as he’d allegedly been told, there’s no evidence he raised any concerns. And similarly, no evidence has been submitted that he ever attempted to rent out his points. To me, these are not the actions of someone who relied on a misrepresentation that he was guaranteed to rent out his points for a profit. PR has not grappled seriously with this point in its response to my provisional decision. As I said in the provisional decision, I don’t doubt that this is what Mr A remembers. But the contemporaneous evidence doesn’t support his account of events. I’m not persuaded, therefore, by the allegations of 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 A. 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 misrepresentation, I’m not persuaded that the timeshare 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 A 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 A 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.

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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: 1. The Lender’s decision to lend to Mr A was, in essence, irresponsible; and 2. Mr A was pressured by the Supplier into purchasing the timeshare at the Time of Sale. However, as neither the PR nor Mr A have submitted any new evidence to further either of the arguments above, it is for the same reasons I gave in my provisional decision that I don’t think either of them render his credit relationship with the Lender unfair to him for the purposes of Section 140A. I understand from its submissions that PR also maintains that the timeshare was marketed or sold to Mr A as an investment in breach of Regulation 14(3) of the Timeshare Regulations, rendering his credit relationship with the Lender unfair to him. This part of the complaint fails for reasons which are closely related to the reasons why the misrepresentation claim I addressed earlier in this final decision fails. I’m not convinced that the Supplier did market the timeshare to Mr A as an investment by telling him or leading him to believe that he could rent out his points and potentially make a profit by doing so, for the same reasons I articulated above when addressing the misrepresentation claim. But even if the Supplier had said or suggested to Mr A that the timeshare was an investment for the reasons stated, in breach of the relevant regulations, then this wouldn’t be determinative of the outcome of this part of his complaint. 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

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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 A 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 agreement to purchase the timeshare, 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. And on my re-reading of the evidence before me, I’m still not persuaded that the prospect of making a profit by renting out his points was an important and motivating factor when Mr A decided to go ahead with his purchase to the extent that he would have made an entirely different purchasing decision had there not been a breach of Regulation 14(3). I say that for the same reason why I don’t think he relied on any alleged misrepresentations by the Supplier on the same subject – his post-purchase actions are not consistent with those of someone for whom renting out his points for a profit, was a material factor in his purchasing decision. I recognise that the PR has argued that the purchase essentially made no financial sense for Mr A, unless the Supplier had made the representations alleged, and Mr A had relied on them. However, the product had some value beyond renting out of the points. The main purpose of the points was to be exchanged for holiday accommodation, and while the PR suggests the product didn’t represent good value for money, that doesn’t necessarily mean that the Supplier must have either misrepresented something or improperly marketed the product in some other way. On balance, therefore, for the reasons I’ve set out above, I don’t think the credit relationship between Mr A and the Lender was unfair to him for reasons relating to the Supplier’s alleged breach of Regulation 14(3) of the Timeshare Regulations.

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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, following my provisional decision. 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 following the provisional decision, 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 A 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 I don’t think the Lender acted unfairly or unreasonably when it dealt with Mr A’s section 75 claim. I’m still not persuaded that the Lender was party to a credit relationship with Mr A 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 A. My final decision For the reasons explained above, and in the appended provisional decision, I do not uphold Mr A’s complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr A to accept or reject my decision before 27 April 2026. Will Culley Ombudsman

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COPY OF PROVISIONAL DECISION I’ve considered the relevant information about this complaint. Having done so, I’ve arrived at broadly the same conclusions as our Investigators but have gone into more detail. There is also the matter of Mr A’s complaint about commission to resolve, which I do not currently have enough information to make a decision about. I’m issuing this provisional decision to set out my position and allow the parties a further opportunity to make submissions. The deadline for both parties to provide any further comments or evidence for me to consider is 3 September 2025. Unless the information changes my mind, my final decision is likely to be along the following lines. The complaint Mr A’s complaint is, in essence, that Clydesdale Financial Services Limited (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. What happened Mr A was a member of a timeshare provider (the ‘Supplier’) – having purchased a number of products from it over time. But this complaint concerns a purchase of 10,000 additional points in the Supplier’s ‘European Collection’ – which he bought on 9 January 2012 (the ‘Time of Sale’). He entered into an agreement with the Supplier to buy the points at a cost of £6,500 (the ‘Purchase Agreement’). Mr A paid for his purchase by taking finance of £5,500 from the Lender (the ‘Credit Agreement’), and paying the remaining balance by other means. Mr A – using a professional representative (the ‘PR’) – wrote to the Lender on 6 November 2016 (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. I will say however, that the PR seems to have mistakenly believed two later purchases made by Mr A of a different product (points in the Supplier’s ‘Fractional Club’) were financed by the Lender. Only Mr A’s 2012 purchase was financed by the Lender, so this complaint is limited only to looking at that. It's unclear if the Lender ever responded to the PR, but by February 2017 the PR had referred the matter to the Financial Ombudsman Service, and this had prompted a letter from the Lender to us which rejected the complaint on every ground. The complaint was then referred to the Financial Ombudsman Service. It was assessed by an Investigator who, having considered the information on file, rejected the complaint on its merits. Another Investigator later reviewed the case and pointed out to the PR that, because the complaint only concerned a purchase of 10,000 points in 2012, and not a fractional timeshare, its arguments that the product had been sold as an investment in contravention of the Timeshare Regulations 2010, were not persuasive.

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PR responded disagreeing with this, producing a witness statement said to be from September 2016, in which Mr A described the Supplier having told him that he would be able to rent out his European Collection points, guaranteed, and this would cover all the fees associated with his timeshare and probably make him a profit. So the Supplier had improperly presented this purchase as an investment, notwithstanding the fact it was not a fractional timeshare.5 As no agreement could be reached, the case has been passed to me to decide. 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 no different to that shared in several hundred ombudsman decisions on very similar complaints. And with that being the case, it is not necessary to set it out here. What I’ve provisionally 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, 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 them here. It was said in the Letter of Complaint that the timeshare had been misrepresented by the Supplier at the Time of Sale because Mr A was told or led to believe by the Supplier that the timeshare: (1) had a guaranteed end date when that was not true. 5 Fractional timeshares are asset-backed and entitle owners/members to the share of the net sale proceeds of a specific named property after a certain number of years. This feature of such products could reasonably be described as an investment.

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(2) was the only way of releasing himself from his existing membership when that was not true. Mr A was already a European Collection member. The European Collection is a long-term timeshare/holiday club. The paperwork Mr A signed at the Time of Sale said his membership would terminate in 2054. Given we have not reached that year yet, it’s rather difficult for me to say whether or not the membership will terminate at that point in time. The paperwork says it will, because the European Collection is to be dissolved that year. If the Supplier told Mr A that his membership would end that year, then it’s difficult for me to conclude that this was false. I also don’t believe that the Supplier is likely to have told Mr A that adding 10,000 points to his existing membership was a means of releasing himself from said membership. This wouldn’t make any sense, especially when it resulted in no change to the length of his membership. So, while I recognise that Mr A and the PR have concerns about the way in which the 10,000 points were 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. Section 75 of the CCA: the Supplier’s Breach of Contract The PR says on Mr A’s behalf that the Supplier breached one of the Purchase Agreements because there’s no evidence that he owns any part of any property. I think PR has confused Mr A’s 2012 purchase with one of his later purchases of points in the Fractional Club. Mr A’s 2012 purchase was of points in a different timeshare club which didn’t include a share in a property. So I would be surprised if there was evidence that Mr A owned a part of any property as a result of his 2012 purchase. From the evidence I have seen, I do not think the Lender is liable to pay Mr A any compensation for a breach of contract by the Supplier. And with that being the case, I do not think the Lender acted unfairly or unreasonably in relation to this aspect of the complaint either. Section 140A of the CCA: did the Lender participate in an unfair credit relationship? I’ve already explained why I’m not persuaded that the timeshare 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: 3. the right checks weren’t carried out before the Lender lent to Mr A; 4. Mr A was pressured by the Supplier into purchasing the timeshare at the Time of Sale; and 5. The timeshare was marketed and sold as investment in breach of a prohibition on doing so.

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However, having considered the entirety of the credit relationship between Mr A 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: 6. 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; 7. The provision of information by the Supplier at the Time of Sale, including the contractual documentation and disclaimers made by the Supplier; 8. Evidence provided by both parties on what was likely to have been said and/or done at the Time of Sale; 9. The inherent probabilities of the sale given its circumstances; and, when relevant 10. Any existing unfairness from a related credit agreement. I have then considered the impact of these on the fairness of the credit relationship between Mr A and the Lender. The Supplier’s sales & marketing practices at the Time of Sale While the PR says that the right affordability checks weren’t carried out at the Time of Sale, 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 A 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 A. Indeed, Mr A says that upon realising that he would be paying a lot of interest, he paid off the loan in full, suggesting he may well have had the financial resources to buy the 10,000 points without needing to borrow money. This is not suggestive of the loan having been unaffordable. I’ll add here that although Mr A has indicated that he wasn’t made aware of the interest payable on the loan, I think this was clearly set out on the loan agreement he signed, so I can’t say that the loan was mis-sold to him for that reason. Regarding the matter of pressure, I acknowledge that Mr A may have felt worn down by 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 the sales presentation that made him feel as if he had no choice but to purchase the extra 10,000 points when he simply did not want to. He was also given a 14-day cooling off period to reflect on the purchase and he has not provided a credible explanation for why he did not cancel it during that time. And with all of that being the case, there is insufficient evidence to demonstrate that Mr A made the decision to purchase the additional points because his ability to exercise that choice was significantly impaired by pressure from the Supplier. Overall, therefore, I don’t think that Mr A’s credit relationship with the Lender was rendered unfair to him under Section 140A for any of the reasons above. 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 the timeshare was marketed and sold to him as an investment in breach of prohibition against selling timeshares in that way. The Supplier’s alleged breach of Regulation 14(3) of the Timeshare Regulations

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The Lender does not dispute, and I am satisfied, that Mr A’s European Collection 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. To conclude, therefore, that the 10,000 additional points in the European Collection were marketed or sold to Mr A 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 them to him as an investment, i.e. told him or led him to believe that the points offered him the prospect of a financial gain (i.e., a profit) given the facts and circumstances of this complaint. The PR and Mr A have pointed towards a rental scheme which was a feature of the European Collection membership, which was (they say) promoted to Mr A at the Time of Sale as an investment. Mr A says he was told it was guaranteed that he could rent out his points, and that the money gained through this activity would cover the cost of his membership fees and probably make him a profit. Based on what Mr A has said, the Supplier presented this as a solution of sorts to concerns he’d expressed about how high his annual fees had become. At the Time of Sale, Mr A signed a declaration and ticked next to various statements to indicate he had read and understood them. One of these stated that it was not possible to guarantee that he could rent out his points. Another stated he could earn up to £100 per 1,000 points he successfully rented out, minus a 15% commission on top of which VAT was charged. So for the 10,000 points he bought, Mr A could make up to £820 per year. Immediately below this was an explanation of the costs of the membership – these were £7.10 per 100 points, along with a £443 annual membership fee. In total, this came to £1,153 per year. So there was no way rental income could have covered the annual fees, let alone result in a profit. Having considered the evidence, I think it’s unlikely that the Supplier told Mr A at the Time of Sale that it was guaranteed that he would be able to rent out his points and that this would allow him to cover his annual fees and make a profit. I also think it’s unlikely, if the Supplier had in fact made statements to this effect, that Mr A relied on these. I say this for the following reasons: • One of the declarations Mr A ticked and signed to confirm his agreement with, was that it was not possible to guarantee he could rent out his points. This directly contradicted what the Supplier was alleged to have said. No evidence has been submitted of Mr A having questioned this discrepancy at the Time of Sale or after.

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• It would have been apparent within a matter of months that, if the Supplier had made the statements alleged about the level of rental income that could be expected, these were not true (based on the calculations above). No evidence has been submitted of Mr A having raised concerns with the Supplier about this in the months and years immediately following the purchase. Nor is there any evidence that he in fact attempted to rent out his points – which would suggest either that this was not a feature of the product that was promoted to him, or that he had little interest in renting out his points. • It seems improbable that the Supplier would make statements which were so easy to verify were incorrect, given the number of cancellations and complaints which would inevitably result. I will say here that I’m not suggesting that Mr A has given an account of what happened at the Time of Sale which is anything less than honest. They may well be his recollections of what happened. But I note that these recollections appear to have been recorded, at the earliest, nearly five years after the events in question, and human memory is by no means infallible.6 In the circumstances, I’m inclined to think it is unlikely that the Supplier made the statements Mr A says he recalls it making. Ultimately, this means I don’t think the Supplier improperly marketed or sold the 10,000 points to Mr A as an investment. Mr A’s Commission Complaint I note that one of Mr A’s other concerns relates to alleged payments of commission by the Lender to the Supplier for acting as a credit broker and arranging the Credit Agreement. The Supreme Court’s recent judgment in Johnson and Wrench -v- FirstRand Bank, and Hopcroft -v- Close Brothers [2025] UKSC 33 (‘Johnson, Wrench and Hopcroft’) clarified the law on commission payments – albeit in the context of car dealers acting as credit brokers. In my view, the Supreme Court’s judgment sets out principles which appear capable of applying to credit brokers other than car dealer–credit brokers. At present, I do not know what, if any, commission was paid by the Lender in respect of Mr A’s loan. Once I find out more information about this, I will finalise my findings on this complaint. 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(s), and if I put the issue of commission to one side for the time being, I am not persuaded that the Lender was party to a credit relationship with Mr A under the Credit Agreement that was unfair to him for the purposes of Section 140A of the CCA – nor do I see no other reason why it would be fair or reasonable to direct the Lender to compensate him. But, as I’ve already suggested, the Supreme Court’s judgment on Johnson, Wrench and Hopcroft may prove important to this complaint. And with that being the case, it is necessary to consider the implications of that judgment before finalising my thoughts on the merits of this complaint. 6 The case of Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm), contains a useful analysis of the fallibility of human memory in scenarios such as this.

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My provisional decision For the reasons explained above, I’m not currently minded to uphold this complaint but need to consider the implications of the recent Supreme Court judgment before finalising my position. I now invite the parties to prove any further information they would like me to consider, by 3 September 2025. I will then review matters again. Will Culley Ombudsman

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