First Holiday Finance Limited · DRN-6249202

The complaint Mr and Mrs A’s complaint is, in essence, that First Holiday Finance Limited (the ‘Lender’) acted unfairly and unreasonably by (1) being party to an unfair credit relationship with them 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. Background to the Complaint Mr and Mrs A purchased membership of a timeshare (the ‘Fractional Club’) from a timeshare provider (the ‘Supplier’) on 13 August 2018 (the ‘Time of Sale’). They entered into an agreement with the Supplier to buy 1,200 fractional points at a cost of £17,369 (the ‘Purchase Agreement’). Fractional Club membership was asset backed – which meant it gave Mr and Mrs A 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 and Mrs A paid for his Fractional Club membership by taking finance of £12,474 from the Lender (the ‘Credit Agreement’). They traded in an existing trial membership they purchased in July 2018 for £4,395. The remaining £500 was paid using other means. Mr and Mrs A – using a professional representative (the ‘PR’) – wrote to the Lender on 15 July 2024 (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 and Mrs A’s concerns as a complaint and issued its final response letter rejecting it 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. Mr and Mrs A disagreed with the Investigator’s assessment and asked for an Ombudsman’s decision – which is why it was passed to me. I issued my provisional decision (the ‘PD’) to the parties on 9 March 2026. In my PD, I said: “I have considered all the available evidence and arguments to decide what is 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.

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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 Fractional Club membership had been misrepresented by the Supplier at the Time of Sale because Mr and Mrs A were: (1) told by the Supplier that the membership would secure holiday accommodation for the duration of the contract, as they could book from the many options available. (2) told by the Supplier that the purchase was an “investment” and could be sold at a later date for a profit. The PR says that the Supplier made a statement that was untrue as the membership was not as described. However, the PR has not given much detail as to why it thinks either of those statements were untrue, and it has not provided sufficient evidence to support these allegations. And as for point (2), telling prospective members that they were investing their money because they were buying a fraction or share of one of the Supplier’s properties was not untrue – nor was it untrue to tell prospective members that they would receive some money when the allocated property is sold. After all, a share in an allocated property was clearly the purchase of a share of the net sale proceeds of a specific property in a specific resort. And while the PR might question the exact legal mechanism used to give prospective members that interest, it did not change the fact that they acquired such an interest. So, while I recognise that Mr and Mrs A - 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. 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. Having considered the entirety of the credit relationship between Mr and Mrs 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:

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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; 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 and Mrs A and the Lender. The Supplier’s sales & marketing practices at the Time of Sale Mr and Mrs A’s complaint about the Lender being party to an unfair credit relationship was and is made for several reasons. They include, for various reasons, the allegation that the Supplier misled Mr and Mrs A and carried on unfair commercial practices under Regulations 5 and 6 of the CPUT Regulations. However, as Regulations 5 and 6 state, commercial practices only amount to misleading actions or omissions if, in addition to satisfying one or more of the specific matters set out in those provisions, they cause or are likely to cause the average consumer to take a transactional decision they would not have taken otherwise. And as I haven’t seen enough evidence to persuade me that, if there were any such actions or omissions at the Time of Sale (which I make no formal finding on), they led Mr and Mrs A to make the purchasing decision they did, I’m not persuaded that anything done or nor done by the Supplier amounted to an unfair commercial practice for the purposes of those provisions. The PR also alleges that the Supplier acted unfairly under Regulation 7 Schedule 1 of the CPUT Regulations. But given the limited evidence in this complaint, I am not persuaded that the Supplier did. In addition, the PR also says that: 1. Mr and Mrs A 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. However, as things currently stand, neither of these strike me as reasons why this complaint should succeed. I acknowledge that Mr and Mrs A may have felt weary after a sales process that went on for a long time. But they say little about what was said and/or done by the Supplier during the 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 have also recalled being able to leave the sale and return the next day to sign the documents, which I find hard to understand if they were under pressure to sign on the day. They were also given a 14-day cooling off period and they have not provided a credible explanation for why they did not cancel the membership during that time. And with all of that being the case, there is insufficient evidence to demonstrate that Mr and Mrs A 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 and Mrs A’s credit relationship with the Lender was rendered unfair to them under Section 140A for any of the reasons above. But there is another reason, perhaps the main reason, why the PR now says the credit relationship with

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the Lender was unfair to them. And that’s the suggestion that Fractional Club membership was marketed and sold to them 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 The Lender does not dispute, and I am satisfied, that Mr and Mrs A’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 and Mr and Mrs A say that the Supplier did exactly that at the Time of Sale – saying the following: “However, it is clear that that the Supplier told Our Clients about their entitlement to sell their membership, that the membership was an investment, and that they would get back the money they invested, plus a specific profit.” 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 A 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 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 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. There is competing evidence in this complaint as to whether 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.

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On the one hand, it is clear that the Supplier made efforts to avoid specifically describing membership of the Fractional Club as an ‘investment’ or quantifying to prospective purchasers, such as Mr and Mrs A, the financial value of their share in the net sales proceeds of the Allocated Property along with the investment considerations, risks and rewards attached to them. On the other hand, I acknowledge that the Supplier’s sales process left open the possibility that the sales representative may have positioned Fractional Club membership as an investment. So, I accept that it’s equally possible that Fractional Club membership was marketed and sold to Mr and Mrs A as an investment in breach of Regulation 14(3). However, whether or not there was a breach of the relevant prohibition by the Supplier is not ultimately determinative of the outcome in this complaint for reasons I will come on to shortly. And with that being the case, it’s not necessary to make a formal finding on that particular issue for the purposes of this decision. Was the credit relationship between the Lender and the Consumer rendered unfair? Having found that it was possible that the Supplier breached Regulation 14(3) of the Timeshare Regulations at the Time of Sale, I now need to consider what impact that breach had on the fairness of the credit relationship between Mr and Mrs A and the Lender under the Credit Agreement and related Purchase Agreement as 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 and Mrs A and the Lender that was unfair to them and warranted relief as a result, whether the Supplier’s breach of Regulation 14(3) led them to enter into the Purchase Agreement and the Credit Agreement is an important consideration. But on my reading of the evidence before me, the prospect of a financial gain from Fractional Club membership was not an important and motivating factor when Mr and Mrs A decided to go ahead with their purchase. An excerpt of their testimony reads: “We were told fractional ownership was being able to have use of the apartment anytime we wanted to have a holiday. Other additional incentives were shown to us of including [a third- party] and [the Supplier] hotels where we could book short stays. l believe we were told we could always sell the product if we were no longer interested, being a financial investment. Hence, what made us more interested was because we were informed that we were buying a part share apartment, and the apartment was going to be sold and a share of profit was going to be given to us. We did not agree on the first day, but they were back to pick us the second day and we signed the contract. We could not afford the product and was offered finance. We were declined finance initially but with their pressure and determination, it was eventually approved after a few attempts. We eventually signed the contract and was given copies of the contract. We visited Malaga one more time and this was when we were sold the full membership after much persuasion. We were given a complimentary week in Tenerife. [My emphasis added]" I have thought about what Mr and Mrs A were able to recall about the events at the Time of Sale. I can see that they have recalled the sale as taking place in Malaga, whereas the documentary evidence shows that they signed the contract in Tenerife. Additionally, their

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recollections about the investment element, that I have emphasised in bold above, appear in grey text in their testimony, whereas the rest of what they have written is in regular black text. This does not mean it is not written in their own words, but I think it’s possible this part was added later, for whatever reason. In any case, I find Mr and Mrs A’s recollections are inconsistent as they recall being able to sell the membership whenever they liked, but also that they would receive a profit at a point in the future. To me, their testimony lacks the necessary colour and context to allow me to understand exactly what they were told about the Fractional Club membership that led them to believe that they would receive a profit. 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 A themselves don’t persuade me that their purchase was motivated by the share in the Allocated Property and the possibility of a profit, I don’t think a breach of Regulation 14(3) by the Supplier was likely to have been material to the decision they ultimately made. On balance, therefore, even if the Supplier had marketed or sold the Fractional Club membership as an investment in breach of Regulation 14(3) of the Timeshare Regulations, I am not persuaded that Mr and Mrs A’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). On the contrary, I think the evidence suggests they would have pressed ahead with their purchase whether or not there had been a breach of Regulation 14(3). And for that reason, I do not think the credit relationship between Mr and Mrs A and the Lender was unfair to them 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 A were not given sufficient information at the Time of Sale by the Supplier about the ongoing costs of Fractional Club membership. The PR also says that the contractual terms governing the ongoing costs of membership and the consequences of not meeting those costs were unfair contract terms. 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 also possible that the Supplier did not give Mr and Mrs A 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 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 and Mrs A nor the PR have persuaded me that he would not have pressed ahead with his 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 fact 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 A in practice, nor that any such terms led him 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. Mr and Mrs A’s commission complaint

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In November 2024 Mr and Mrs A’s personal representative (“the PR”) asserted on behalf of Mr and Mrs A that the payment of commission made the financial arrangement unfair. The PR didn’t give a level of commission at which it considered unfairness arose, but its arguments included the following: • Despite requests, there had been no disclosure of the actual amount of commission paid by the Lender to the Supplier • per the Court of Appeal’s judgment in Johnson1, the percentage of commission should be based upon “the sum borrowed” • the amount of the annual percentage rate of interest (“APR”) is key and was unusually high, substantially increasing the total charge for credit • Commission paid by the Supplier to its self-employed sales representatives should also be disclosed and taken into account in the calculation used to determine unfairness Did the commission arrangements render the credit relationship unfair? My reading of the Supreme Court’s judgment in Hopcraft, Johnson and Wrench is that it sets out principles which can apply to credit brokers other than car dealer–credit brokers. So I’ve taken into account those principles when considering the allegations of undisclosed payments of commission in this complaint. In Hopcraft, Johnson and Wrench the Supreme Court ruled that, in each of the three cases, 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: • 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”2; • The failure to disclose the commission; and • The concealment of the commercial tie between the car dealer and the lender. The Supreme Court also confirmed that the following factors, in what was a non-exhaustive list, will normally be relevant when assessing whether a credit relationship was/is unfair under section 140A of the CCA: • The size of the commission as a proportion of the charge for credit; • The way in which commission is calculated (a discretionary commission arrangement, for example, may lead to higher interest rates); 1 The PR’s submission references the Court of Appeal judgment (Johnson v FirstRand Bank Limited, Wrench v FirstRand Bank Limited and Hopcraft v Close Brothers [2024] EWCA Civ 1106 (“Johnson”)). The Supreme Court has since handed down its judgment clarifying the position in law. 2 Hopcraft, Johnson and Wrench (para 327).

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• The characteristics of the consumer; • 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 • Compliance with the regulatory rules. After careful consideration, I don’t think Hopcraft, Johnson and Wrench assists Mr and Mrs A in arguing that their credit relationship with the Lender was unfair to them for reasons relating to commission, given the facts and circumstances of this complaint. I haven’t seen anything to suggest the Lender and Supplier were tied to one another contractually or commercially in a way that wasn’t properly disclosed to Mr and Mrs A. Nor have I seen anything that persuades me that the commission arrangements between them gave the Supplier a choice over the interest rate that led Mr and Mrs A into a credit agreement that cost disproportionately more than it otherwise could have. I recognise that it’s possible 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 case law on section 140A makes clear that regulatory breaches do not automatically lead to an unfair credit relationship, and that such breaches and any consequences must be considered in the round rather than in a narrow or technical way. With that being the case, even if the Lender and the Supplier failed to follow the relevant regulatory guidance at the Time of Sale, I’m not minded to think any such failure is itself a reason to find the credit relationship in question unfair to Mr and Mrs A. I say this for the following reasons. Fundamentally, in stark contrast to the facts in Mr Johnson’s case, the Lender has provided evidence that there was no payment of commission to the Supplier for arranging Mr and Mrs A’s Credit Agreement. I can’t see, therefore, that any of the arguments made around a failure to disclose that fact could possibly succeed, particularly as it can’t be shown that Mr and Mrs A would have made a different decision about whether to take out the loan had they known there was no commission. What’s more, based on what I’ve seen so far, the Supplier’s role as a credit broker wasn’t a separate service and distinct from its role as the seller of timeshares. It was simply a means to an end in the Supplier’s overall pursuit of a successful timeshare sale. I can’t see that the Supplier gave an undertaking – either expressly or impliedly – to put to one side its commercial interests in pursuit of that goal when arranging the Credit Agreement. As it wasn’t acting as an agent of Mr and Mrs A but as the supplier of contractual rights they 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 them when arranging the Credit Agreement and thus a fiduciary duty. I don’t consider it necessary for me to take into account any commission the Supplier might have paid to its sales representatives, or that this should be disclosed or factored into any calculation used to determine unfairness. Even if any such arrangement was in place (and I make no finding in this respect), its disclosure and/or payment would be further removed from any obligations the Supplier might have held, and even less likely to have an impact on Mr and Mrs A’s decision to enter into the Credit Agreement. I'm aware of the factors the PR feels should be taken into account in calculating the loan APR and commission. However, I'm satisfied it's appropriate that I follow the approach set out in the Supreme Court judgment.

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Overall, I don’t intend to conclude 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 and Mrs A. So, given all of the factors I’ve looked at and having taken all of them into account, I’m not persuaded that the credit relationship between Mr and Mrs A and the Lender under the Credit Agreement and related Purchase Agreement was unfair to them. And as things currently stand, I don’t think it would be fair or reasonable that I uphold this complaint on that basis.” In summary, I wasn’t minded to think that the Lender acted unfairly or unreasonably when it dealt with Mr and Mrs A’s section 75 claim. I didn’t find any of the arguments put forward demonstrated that the credit agreement between Mr and Mrs A and the Lender was unfair to them under section 140A of the CCA. Absent any other reason why it would be fair or reasonable to direct the Lender to compensate Mr and Mrs A, I said I didn’t propose to uphold the complaint. Responses to my provisional findings The Lender accepted my PD. The PR didn’t accept the proposed outcome. It made further submissions in support of Mr and Mrs A’s position. Having received and reviewed these, I’m now proceeding with 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 rules3 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 (where 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. After considering the case afresh and having regard for what’s been said in response to my PD, I find it offers no persuasive reason to depart from the conclusions I’ve previously set out. I’ll explain why. In doing so, I remind the PR 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. 3 Financial Conduct Authority (“FCA”) Handbook – DISP 3.6.4R (“R” denotes a rule).

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The PR reiterates its position that the Fractional Club was misrepresented to Mr and Mrs A and this induced them into entering into the Purchase Agreement and related Credit Agreement. It also argues that the misrepresentation(s) did not need to be the only reason(s) they went ahead, just that it was one of the reasons. But, as I said in the PD, I did not find that the Supplier misrepresented the product, based on everything presented to me by the PR. I have thought about everything again and remain of that position for the same reasons as I gave in the PD. And that means that I don’t think that the Lender acted unreasonably or unfairly when it dealt with Mr and Mrs A’s Section 75 claim. Section 140A of the CCA: did the Lender participate in an unfair credit relationship? The Supplier’s alleged breach of Regulation 14(3) of the Timeshare Regulations The PR says I did not consider the fairness of the credit relationship “in the round” and that I dismissed each alleged “failing” in isolation. It then lists those allegations again, which are, in summary: • The Supplier pressured Mr and Mrs A into making the purchase. • The Supplier did not adequately disclose the ongoing costs associated with the membership. • Mr and Mrs A could not afford the purchase. • I have placed weight on “minor inconsistencies” which do not undermine the core allegations. I have considered all the arguments and evidence presented to me by the PR. Having done so again, I do not agree that the complaint about an unfair debtor creditor relationship should be upheld. The PR reiterates its position that the sale was pressured and it says that my position that Mr and Mrs A could have cancelled the agreement within the cooling-off period undermines the protective purpose of consumer legislation. I don’t agree with the PR here, and I think that the 14-day cooling-off period forms an important part of the very protection that Mr and Mrs A had available to them, had they felt that they had no choice but to proceed at the time due to pressure from the Supplier. I will again reiterate that they returned the following day to complete the purchase, which I struggle to understand if they felt overly pressured to buy the membership. As it is, I remain of the position that the relationship between Mr and Mrs A and the Lender was not rendered unfair because of any pressure applied by the Supplier. I have explained in the PD why I think that any failings to disclose the ongoing costs did not render the relationship unfair and I remain of that position for the same reasons. The PR is now questioning why my PD did not cover the allegation that the lending was not affordable for Mr and Mrs A, but I will remind it that it did not raise this matter within its Letter of Complaint. I have considered everything and I do not think the PR has provided me with sufficient evidence to conclude that the lending was irresponsible. Mr and Mrs A say in their testimony that they “struggled to pay the management fees as well as the loan during Covid”. I don’t expect the Lender to have been aware at the Time of Sale that Mr and Mrs A’s financial circumstances might change in the future due to a global pandemic. Lastly, the PR suggests that what it calls “minor inconsistencies” do not undermine Mr and Mrs A’s core recollections about the sale of the Fractional Club membership. In considering their testimony, I must take into account its accuracy, among other things, to decide how much weight I can place on what is said. And here, I think I can place some weight on what

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they say, despite their recollections that the sale took place in a different location than it did. But I remind the PR of exactly what I concluded on this matter in the PD, which was: “I find Mr and Mrs A’s recollections are inconsistent as they recall being able to sell the membership whenever they liked, but also that they would receive a profit at a point in the future. To me, their testimony lacks the necessary colour and context to allow me to understand exactly what they were told about the Fractional Club membership that led them to believe that they would receive a profit.” So, it was Mr and Mrs A’s inconsistencies and lack of detail on what they recall being told about the potential to make a profit as Fractional Club members, not the failure to recall the place of the sale, that led me to conclude that any breach of Regulation 14(3) by the Supplier was unlikely to have been material to the decision they ultimately made. Section 140A: Conclusion Given all of the factors I’ve looked at in this part of my decision, and having taken all of them into account, I remain unpersuaded that the credit relationship between Mr and Mrs A and the Lender under the Credit Agreement and related Purchase Agreement was unfair to them such that it warrants the Lender offering any redress. Conclusion After careful reconsideration of the facts and circumstances of this complaint, I adopt my provisional conclusions as part of my final decision. For the reasons I’ve given above and in my earlier correspondence I’ve mentioned, I don’t think the Lender acted unfairly or unreasonably when it dealt with Mr and Mrs A’s section 75 claim. And I’m not persuaded that the Lender was party to a credit relationship with Mr and Mrs A that was unfair to them for the purposes of section 140A of the CCA. 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 and Mrs A. My final decision For the reasons set out above, my final decision is that I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs A and Mr A to accept or reject my decision before 21 April 2026. Andrew Anderson Ombudsman

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