Shawbrook Bank Limited · DRN-6263614

The complaint Mrs R’s complaint is, in essence, that Shawbrook Bank Limited (the ‘Lender’) acted unfairly and unreasonably by (1) being party to unfair credit relationships with her under Section 140A of the Consumer Credit Act 1974 (as amended) (the ‘CCA’) and (2) deciding against paying claims under Section 75 of the CCA. The timeshares in question were bought jointly by Mr and Mrs R, and the associated loans were also in joint names. However, prior to the complaint being made to the Lender Mr R sadly died, so this complaint is in effect made only by Mrs R. I will, however, refer to both Mrs R and the late Mr R where it is appropriate to do so. What happened Mrs R and the late Mr R had been members of a timeshare provider (the ‘Supplier’) since 1998 and had purchased a total of 20,000 European Collection (‘EC’) points up until 2013. As EC members, every year Mrs R and the late Mr R could use their points in exchange for holidays at the Supplier’s holiday resorts. Different accommodation had different points values, depending on factors such as location, size, and time of year. So, for example, a larger apartment in peak season would cost more to a member in points than a smaller apartment outside of school holiday periods. On 22 March 2013 (the ‘Time of Sale 1’) Mrs R and the late Mr R traded in their entire holding of 20,000 EC points towards the purchase of 21,000 fractional points (‘Purchase Agreement 1’) in the Supplier’s Fractional Owners Club (hereon referred to as ‘FOC A’). They were given a conversion rate of £1 per EC point, and the membership ended up costing them £12,324. This type of fractional membership differed from their EC membership. The two significant differences were that it had a shorter membership term (15 years compared to an end date of 2054 for the EC membership), and it was also asset backed – which meant it gave Mrs R and the late Mr R more than just holiday rights. It also included a share in the net sale proceeds of a property named on the purchase agreement after their membership term ends. Mrs R and the late Mr R paid for ‘FOC A’ by taking finance of £12,324 from the Lender (the ‘Credit Agreement 1’). Then, on 19 September 2014 (the ‘Time of Sale 2’), Mrs R and the late Mr R purchased 5,000 EC points from the Supplier for £3,700 (‘Purchase Agreement 2’). This was paid for by them taking finance from the Lender of £3,700 (the ‘Credit Agreement 2’). Following this, in May 2015 Mrs R and the late Mr R bought a further 5,000 EC points from the Supplier for £3,501. This was paid for by a card payment and is not the subject of this complaint.

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Later that year, on 23 July 2015 (the ‘Time of Sale 3’) Mrs R and the late Mr R exchanged 4,000 EC points for 4,000 fractional points (the ‘FOC B’). They were given a conversion rate of £1 per EC point, and ended up paying £5,080 for their ‘FOC B’ membership. Mrs R and the late Mr R paid for their ‘FOC B’ membership by taking finance of £5,080 from the Lender (the ‘Credit Agreement 3’). Mrs R and the late Mr R’s final purchase from the Supplier was on 6 May 2016 (the ‘Time of Sale 4’). This was of 25,500 EC points (the ‘Purchase Agreement 4’) for which they paid £19,269. This was paid for by them taking further finance of £19,269 from the Lender (the ‘Credit Agreement 4’). On 2 May 2017 Mr R sadly died. Mrs R – using a professional representative (the ‘PR’) – wrote to the Lender on 11 July 2018 to complain about the way the Supplier conducted the sales at Time of Sale 1, 2 3 and 4 and the associated credit agreements for the purchases. 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 was unable to provide a substantive response to Mrs R’s complaint within the eight weeks required by the regulator, so the PR referred her complaint to the Financial Ombudsman Service. The Lender sent Mrs R its final response to her complaint on 14 January 2019, rejecting it on all grounds. Unhappy with this outcome Mrs R confirmed she wanted the merits of her complaint to be considered by this Service. It was assessed by an Investigator who, having considered the information on file, rejected the complaint on its merits. Mrs R disagreed with the Investigator’s assessment and asked for an Ombudsman’s decision – which is why it was passed to me. The provisional decision Having considered everything that had been submitted, I agreed with the outcome reached by the Investigator, in that I didn’t think this complaint ought to be upheld, but my reasons for not doing so were somewhat different. So, I issued a provisional decision (the ‘PD’) setting out my initial thoughts on the merits of the complaint and invited both sides to submit any new evidence or arguments that they wished me to consider before finalising my decision. In the PD (which forms part of this final decision) I said: “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.

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The complaint made to the Lender, in the Letter of Complaint dated 11 July 2018, related to four finance agreements between Mrs R and the Lender. The reference numbers for three of these were listed (relating to Credit Agreement 1, 3 and 4) with the 4th recorded as ‘Unknown’. So, it is clear that the complaint relates to the four purchases from the Supplier which were made with the help of finance from the Lender. But other than the references stated, there is very little in the Letter of Complaint which sets out anything specific relating to each of the above sales. But it sets out that it was making claims on the basis of: 1. Liability under Section 75 of the CCA for ‘breaches of contract, misrepresentation and/or negligence of the supplier’. 2. Liability for procuring breach of fiduciary duty (relating to undisclosed commission). 3. Liability on the basis of an unfair credit relationship pursuant to Section 140A of the CCA. 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 is unclear which of the misrepresentations that were set out in the Letter of Complaint relate to which sale. Indeed, as I will go on to show, some of the misrepresentations cannot relate to some of the sales. But, as I will also show, irrespective of which sale the misrepresentations were said to have been made at, I am not persuaded that such misrepresentations were made. It was said in the Letter of Complaint that several promises were made to Mrs R (and the late Mr R) by the Supplier which were untrue, and the Supplier either knew them to be untrue or was reckless as to whether they were true or not. They were, in summary: • Mrs R and the late Mr R were advised that the only way they could exit their membership of the resort was to purchase a fractional points membership. • Mrs R and the late Mr R were advised that they would be guaranteed to exit the fractional points membership after a finite number of years. • Mrs R and the late Mr R believed they would be buying into an “exclusive” membership as provided by the Supplier. I shall deal with each alleged misrepresentation in turn. By its very nature, the first alleged misrepresentation can only relate to the Time of Sale 1 when FOC A was purchased. But having considered the evidence in this case, I am not persuaded that this representation was made. I think this because Mrs R, in a written statement submitted to this Service in evidence, makes no mention of the Supplier having said this at any point. And I find it hard to believe that had the Supplier told her and the late

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Mr R this, she would not have recalled or mentioned it. And as there is nothing else on file which makes me think the Supplier said this, I am not persuaded it did. As regards the second alleged misrepresentation, while, as I understand it, the sale of the Allocated Property could be postponed in certain circumstances according to the club rules, Mrs R says little to nothing to persuade me that she and the late Mr R 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 there’s nothing else on file to support the PR’s allegation, I’m not persuaded that there was a representation by the Supplier on the issue in question that constituted a false statement of fact. And as regards the “exclusive” membership, there is again no evidence that has been submitted which leads me to think Mrs R and the late Mr R were told that the resorts would be “exclusive” or that any such representation was made. Mrs R has made no mention of this in her statement which I find surprising if, as set out in the Letter of Complaint, this was of concern to her. So, while I recognise that Mrs R and the PR have concerns about the way in which the various memberships 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 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 Letter of Complaint, under the heading ‘Breach of Contract’ set out the following terms which govern Mrs R’s fractional memberships. So, in effect, the alleged breaches can only relate to Time of Sale 1 and 3 as they were the only two ‘fractional’ memberships purchased. The terms set out were: “5.1 The Owners shall be invoiced for the Management Charge by 30 November in each Year… 9.1 Each Allocated Property shall be sold on its respective Sale Date which occurs on the date specified in the Fractional Rights Certificate for the Allocated Property... 9.2.2 neither Manager nor the Vendor give any form of guarantee, representation or warranty as to the length of time the sales will take to complete.” The PR stated that the combined effect of these terms meant that Mrs R’s interest in the timeshare will continue for another 15 years unchecked and potentially in perpetuity. It also said that as Mrs R had no control over the sums incurred by and/or charged under the contract, and this had not been adequately explained, the terms constituted unfair terms pursuant to the Unfair Terms in Consumer Contracts Regulations 1999 (the ‘UTCCR’), meaning the contract is unenforceable. But I cannot see how the above could constitute a breach of contract. And neither Mrs R nor the PR have said, suggested or provided evidence that because of these terms, Mrs R is no longer: 1. A member of the FOC A and/or FOC B; 2. able to use the FOC A and/or B memberships to holiday in the same way she could initially; and

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3. entitled to a share in the net sales proceeds of the relevant Allocated Property when the fractional memberships end. So, from the evidence I have seen, I do not think the Lender is liable to pay Mrs R 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 one or more unfair credit relationships? I’ve already explained why I’m not persuaded that any of the four memberships being considered here were actionably misrepresented by the Supplier at the Time(s) of Sale, nor that the associated purchase contracts were breached in a way that merits any compensation. 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. Breach of Fiduciary Duty It was alleged in the Letter of Complaint that the Lender paid a commission to the Supplier for arranging the Credit Agreement(s) and because the commission payments were secret, there was a breach of fiduciary duty, and the associated credit relationships were rendered unfair under Section 140A of the CCA. 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. 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;

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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 ones 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 Mrs R in arguing that one or more of her credit relationships with the Lender was or were unfair to her for reasons relating to commission given the facts and circumstances of this complaint. As the Supreme Court said in paragraph 326 of its judgment in Hopcraft, Johnson and Wrench, it’s not possible to simply apply the reasoning of the Supreme Court in Plevin v Paragon Personal Finance Ltd [2014] UKSC 61 (‘Plevin’) to this complaint (as the PR does) when it’s concerned with a type of product and marketplace that were very different to those in Plevin. What’s more, Mrs R and the late Mr R were provided with information as to the price of all of their purchased memberships and the cost of the associated Credit Agreement(s) (interest rate, fees, APR and monthly repayments). So, they were at least in a position from which they could understand the cost of the Credit Agreement(s) and compare them with other options that might have been available at the Time(s) of Sale. And 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 Mrs R and the late Mr R, nor have I seen anything that persuades me that the commission arrangements between them gave the Supplier a choice over the interest rates that led Mrs R and the late Mr R into credit agreements that cost disproportionately more than they 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(s) of Sale insofar as it was relevant to disclosing the commission arrangements between them. But 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(s) of Sale, it is for the reasons set out below that I don’t currently think any such failures were themselves a reason to find one or more of the credit relationships in question unfair to Mrs R. In stark contrast to the facts of Mr Johnson’s case, the amount of commission paid by the Lender to the Supplier for arranging the Credit Agreement(s) that Mrs R and the late Mr R entered into wasn’t high. The amounts of commission paid were as follows: Credit Agreement 1: £985.92 - 8% of the loan and 8.7% of the charge for the credit.

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Credit Agreement 2: £37 – 1% of the loan and 1.36% of the charge for the credit. Credit Agreement 3: £50.80 – 1% of the loan and 1.36% of the charge for the credit. Credit Agreement 4: No commission paid. So, had they known at the Time(s) of Sale that the Supplier was going to be paid a flat rate of commission at those levels (or no commission at all), I’m not currently persuaded that they either wouldn’t have understood that or would have otherwise questioned the size of the payments at those times. After all, Mrs R and the late Mr R wanted the memberships and had no obvious means of their own to pay for them. And at such a low level, the impact of commission (where applicable) on the cost of the credit they needed for timeshares they wanted doesn’t strike me as disproportionate. So, I think they would still have taken out the loans to fund their purchases at the Time(s) of Sale had the amount of commission (where applicable) been disclosed. What’s more, based on what I’ve seen so far, the Supplier’s role as a credit broker wasn’t a separate service and distinct from its role as the seller of timeshares. It was simply a means to an end in the Supplier’s overall pursuit of successful timeshare sales. 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(s). And as it wasn’t acting as an agent of Mrs R and the late Mr R but as the supplier of contractual rights they obtained under the Purchase Agreement(s), the transactions don’t strike me as ones with features that suggest the Supplier had an obligation of ‘loyalty’ to them when arranging the Credit Agreement(s) and thus a fiduciary duty. Overall, therefore, I’m not currently persuaded that the commission arrangements between the Supplier and the Lender were likely to have led to a sufficiently extreme inequality of knowledge that rendered the credit relationships unfair to Mrs R. But two of the grounds on which I came to that conclusion also constitute separate and freestanding complaints to Mrs R’s complaint about one or more unfair credit relationship. So, for completeness, I’ve considered those grounds on that basis here. The first ground relates to whether the Lender is liable for the dishonest assistance of a breach of fiduciary duty by the Supplier because it took a payment of commission from the Lender without telling Mrs R and the late Mr R (i.e., secretly). And the second relates to the Lender’s compliance with the regulatory guidance in place at the Time(s) of Sale insofar as it was relevant to disclosing the commission arrangements between them. However, for the reasons I set out above, I’m not persuaded that the Supplier – when acting as credit broker – owed Mrs R and the late Mr R a fiduciary duty. So, the remedies that might be available at law in relation to the payment of secret commission aren’t, in my view, available to Mrs R. And while it’s possible that the Lender failed to follow the regulatory guidance in place at the Time(s) of Sale insofar as it was relevant to disclosing the commission arrangements between it and the Supplier, I don’t think any such failure on the Lender’s part is itself a reason to uphold this complaint because, for the reasons I also set out above, I think they would still have taken out the loans to fund their purchases at the Time(s) of Sale had there been more adequate disclosure of the commission arrangements that applied at those times.

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Was there a breach of Regulation 14(3) of the Timeshare Regulations1 at any of the Time(s) of Sale Following the Investigator’s view that Mrs R’s complaint ought not to be upheld, the PR wrote to say that it was surprised that the judgement in Shawbrook & BPF v FOS2 didn’t appear to have been taken into account in the Investigator’s view. It said that it was clear from Mrs R’s statement that the fractional timeshare products had been represented to her as an investment and that this representation was fundamental to the purchases. Such a breach of the Timeshare Regulations could render an associated credit relationship unfair to the consumer, so that is what I have considered next. Given the nature of this allegation, it can only relate to the fractional purchases made by Mrs R and the late Mr R – FOC A and FOC B at Time of Sale 1 and 3. Shares in the Allocated Properties clearly constituted investments as they offered Mrs R and the late Mr R 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 memberships 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 FOC A and/or FOC B. They just regulated how such products were marketed and sold. To conclude, therefore, that either or both FOC A and FOC B memberships were marketed or sold to Mrs R and the late Mr R 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 the membership to them as an investment, i.e. told them or led them to believe that the membership offered them the prospect of a financial gain (i.e., a profit) given the facts and circumstances of this complaint. And there is competing evidence in this complaint as to whether the FOC A and FOC B were marketed and/or sold by the Supplier at the Time(s) of Sale as an investment in breach of Regulation 14(3) of the Timeshare Regulations. On the one hand, it is clear that the Supplier made efforts to avoid specifically describing the membership as an ‘investment’ or quantifying to prospective purchasers, such as Mrs R and the late Mr R, 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 FOC A and/or FOC B membership as an investment. And Mrs R has, in her statement, said it did in relation to Time of Sale 1 at least. 1 The Timeshare, Holiday Products, Resale and Exchange Contracts Regulations 2010 (the ‘Timeshare Regulations’) 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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She said, when referring to their purchases from Time of Sale 1 onwards: “We purchased again and this time it was to join the fractional ownership scheme. I can recall this presentation being very similar to the presentations as before. We were asked to attend the presentation whilst on holiday which we did. We were informed that this presentation would be a “catch up meeting”. Yet again the catch up meeting turned into a sales proposal however we decided to be courteous and listened to the proposal again. The representative told us that this purchase could be regarded as an investment, the representative told us that if we decided not to use our ownership we would be able to sell our points and we would be able to make some money from our ownership. We thought what the representative said to us was correct therefore we upgraded our original membership to a fractional membership. We were led into another office to sign the applicable paperwork in a rather speedy fashion just like our last encounter with [the Supplier] resorts. I cannot recall being informed about cooling off period. We had made another purchase, we upgraded our membership... Resort in Tenerife, the representative told us that we would have our own personal concierge, he said that we would be able to check into the resort earlier and also check out of the resorts later, he said that we would be provided with a 24 hours a day advice line and we would not incur any additional charges if we wanted to partake in a cruise, this was a main selling point for us as we had already went on a few cruises that we paid for independently. The sales representative said that we would be rewarded with discount flights if we booked the flights through our personal concierge. Conclusion The way that we were targeted by [Supplier] resorts was rather misleading; each time we upgraded our membership we were led to believe that we were only going to meet their representative to attend a catch up meeting and to find out how we could utilise our membership to the best of our ability. We were not aware that our contract was in perpetuity, we believed that we would be able to sell our fractional points and would be rewarded by doing so, this never materialised. The sales environment was quite busy and when other couples upgraded their membership they opened bottles of sparkling wine adding to the intensity of the sale.” So, I accept that it’s equally possible that the FOC A and FOC B memberships were marketed and sold to Mrs R and the late Mr R as investments 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. Were the credit relationships between the Lender and the Consumer rendered unfair? For all of the reasons given so far, I am not persuaded that any unfairness has been caused to the credit relationships between Mrs R and the Lender relating to Credit Agreement 2 and Credit Agreement 4. But, having found that it was possible that the Supplier breached Regulation 14(3) of the Timeshare Regulations at Time of Sale 1 and 3, I now need to consider what impact such breaches had on the fairness of the associated credit relationships between Mrs R and the Lender under the Credit Agreement(s) and related Purchase Agreement(s), 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.

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Indeed, it seems to me if I am to conclude that a breach of Regulation 14(3) led to credit relationships between Mrs R and the Lender that were unfair to her and warranted relief as a result, whether the Supplier’s breach of Regulation 14(3) led her and the late Mr R to enter into the Purchase Agreement(s) and the Credit Agreement(s) is an important consideration. But on my reading of the evidence before me, the prospect of a financial gain from the FOC A and FOC B memberships was not an important and motivating factor when Mrs R and the late Mr R decided to go ahead with their purchases. I’m simply not persuaded that was the case. I’ll explain. The suggestion that any of the timeshare memberships being considered here were marketed and/or sold to Mrs R and the late Mr R as investments was not made until Mrs R’s statement was submitted to this Service on 26 February 2024. The allegation was not made by the PR in the Letter of Complaint dated 11 July 2018, nor was it made in the PR’s referral and submission of evidence to this Service dated 12 September 2018. Mrs R’s statement is dated 27 June 2017 – this date is prior to the Letter of Complaint. In the statement Mrs R sets out her recollections of their entire relationship with the Supplier. But having read it, and having compared it to the Letter of Complaint, I cannot see that the statement could have informed the Letter of Complaint. There is simply no correlation between them, which I find hard to believe if, as the PR attests, the Letter of Complaint sets out Mrs R’s concerns. And as I’ve said, the statement was not submitted in evidence until February 2024, over three years after the PR first submitted its evidence to this Service. I acknowledge that the statement is dated by hand, but given this late submission, and given that it bears no similarity to the Letter of Complaint, I have some concerns as to whether it was written when the date suggests. It was, after all, submitted after the judgement in Shawbrook & BPF v FOS where it was held that in some circumstances a breach of Regulation14(3) could lead to an unfair debtor- creditor relationship. As the allegation that FOC A and FOC B were sold as investments was not made until after this judgement, there seems to me to be a very real risk that Mrs R’s recollections were coloured by that judgement. So, I do not feel able to put sufficient weight on what she has said to persuade me that there was a breach of Regulation 14(3). But even if I am wrong about that, and the statement was written as the date suggests, when I consider what Mrs R has said in her statement, I am not persuaded that she and the late Mr R were, on the balance of probability, induced into purchasing FOC A and/or FOC B because of the possibility that the memberships could provide a profit. There is simply insufficient colour or context to what she has said to make me think that was the case. For example, there is no detail of who said what, where and in what context. Indeed, the only time any investment element was mentioned was when Time of Sale 1 was being described. It is not mentioned again. That doesn’t mean they weren’t interested in a share in the Allocated Properties. After all, that wouldn’t be surprising given the nature of the product at the centre of this complaint. But as Mrs R herself doesn’t persuade me that their purchases were motivated by their shares in the Allocated Properties and the possibility of a profit, I don’t think breaches of Regulation 14(3) by the Supplier were likely to have been material to the decisions they ultimately made. Mrs R simply has not alleged, when her complaint was first made, that the Supplier sold FOC A and/or FOC B to her and the late Mr R as investments, which is something I would have expected to have been included if it was important to her, or it led them to enter into the

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purchase and/or credit agreements. In the absence of such an allegation and based on the evidence I had seen, I am not persuaded that the breaches of Regulation14(3) now alleged by the PR, even if true, are something that warrants relief in the circumstances of this case. 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 Mrs R and the late Mr R’s decisions to purchase the fractional memberships at the relevant Time(s) of Sale were motivated by the prospect of a financial gain (i.e., a profit). On the contrary, having taken into account Mrs R’s and the late Mr R’s multiple points purchases, I think the evidence suggests they would have pressed ahead with their purchases for the points and holidays they could provide, whether or not there had been a breach of Regulation 14(3). And for that reason, I do not think the credit relationships between Mrs R and the Lender were unfair to her even if the Supplier had breached Regulation 14(3). The provision of information by the Supplier at the Times of Sale Although it was framed in the Letter of Complaint as a breach of contract, the PR says that, because some of the terms of the Purchase Agreement(s) weren’t individually negotiated, they were unfair contract terms (under the UTCCR) as were the terms governing the ongoing costs of membership, potentially in perpetuity. 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 can’t see that any such terms were operated unfairly against Mrs R and/or the late Mr R 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 any of the timeshare memberships being considered here 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. Overall Conclusion In conclusion, given the facts and circumstances of this complaint, I do not think that the Lender acted unfairly or unreasonably when it dealt with Mrs R’s Section 75 claims. I am not persuaded that the Lender was party to credit relationships with her under the Credit Agreement(s) and related Purchase Agreement(s) that were unfair to her 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 to direct the Lender to compensate Mrs R.” The responses to the provisional decision The Lender accepted my provisional decision. The PR disagreed with my overall conclusion. When doing that, it provided submissions which, while primarily concerned with the suggestion that Mrs R and the late Mr R’s Fractional Club membership had been marketed and sold as an investment in contravention of a prohibition on selling timeshares in that way, it repeated the allegations that there had been a breach of Article 10 of the EU Timeshare Directives, and that there had not been a proper assessment of affordability before the Lender agreed to provide the finance for the purchase. The PR also repeated its concerns about the payments of commission to the Supplier by the Lender – albeit with a focus on the Supreme Court’s judgment in Hopcraft, Johnson and

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Wrench and that details of the commercial agreement between the Lender and the Supplier had not been disclosed to it. 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 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 (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 Mrs R and the estate of Mr R 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 Mrs R and the estate of Mr R 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. (4) A breach of Article 10 of the EU Timeshare Directives4, and a failure to carry out a proper credit worthiness and affordability assessment. However, as the PR’s more concise response to my provisional decision relates, in the main, to (3) and (4), as 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 extract of my provisional decision above) in relation to them. Indeed, as I said in my provisional decision, my role as an Ombudsman is to decide what’s fair and reasonable in the circumstances of this complaint – rather than address every single point that’s been made. And with that being the case, while I have read all of the PR’s submissions in full, if I have not commented on, or referred to, something that either party has said, that does not mean I have not considered it. 3 Specifically Rule 3.6.4 in the Dispute Resolution Rules found in the Financial Conduct Authority’s Handbook for Rules and Guidance. 4 Directive 2008/122/EC of the European Parliament and of the Council of 14 January 2009 on the protection of consumers in respect of certain aspects of timeshare, long-term holiday product, resale and exchange contracts

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I will, however, address the point the PR has repeated regarding an alleged breach of Article 10 of the EU Timeshare Directives. It has said that there was a breach of this Article because it requires that for a ‘long-term holiday product’ contract, payment must be made according to a staggered payment schedule. And this breach has rendered the associated credit relationship unfair to Mrs R and the estate of Mr R. But I think the PR is mistaken here. Both a ‘timeshare contract’ and ‘long-term holiday product’ are defined in the Timeshare Regulations. It says: 7. (1) A “timeshare contract” means a contract between a trader and a consumer — (a)under which the consumer, for consideration, acquires the right to use overnight accommodation for more than one period of occupation, and (b)which has a duration of more than one year, or contains provision allowing for the contract to be renewed or extended so that it has a duration of more than one year. (2) The reference to “accommodation” in paragraph (1) includes a reference to accommodation within a pool of accommodation. And; 8. A “long-term holiday product contract” means a contract between a trader and a consumer - (a)the main effect of which is that the consumer, for consideration, acquires the right to obtain discounts or other benefits in respect of accommodation, and (b)which has a duration of more than one year, or contains provision allowing for the contract to be renewed or extended so that it has a duration of more than one year, irrespective of whether the contract makes provision for the consumer to acquire other services. Neither of the FOC memberships or EC points are ‘long-term holiday products’ so Article 10 does not apply here. The memberships in question are ‘timeshare contracts’ as the consumer acquires the right to use overnight accommodation for more than one period of occupation, for more than one year. So, I do not agree that there has been a breach of Article 10, and so consequently Mrs R and the estate of Mr R’s credit relationships with the Lender have not been rendered unfair for this reason. It has also re-stated its allegation that the Lender failed to ensure that a sound and proper credit assessment was carried out. This point was addressed by the Investigator in this case who concluded that there was no evidence to suggest that the lending was unaffordable for Mrs R and the late Mr R, so the associated credit relationships were not rendered unfair as a result. I have considered this point. As no new evidence has been provided to support that any of the loans were unaffordable, I cannot say that it is likely that Mrs R or the estate of Mr R have lost out as a result of the decisions to lend, so I am of the opinion that none of the credit relationships between Mrs R (and now the estate of Mr R) were rendered unfair under Section 140A of the CCA for this reason. The PR has also drawn my attention to earlier guidance from this Service that it was unnecessary to submit anything other than a complaint form at the outset. It makes this point is to explain why the statement was not submitted to this Service until much later in the complaints process (26 February 2024). It says it is unfair for me to question the authenticity

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of the statement due to its late submission. But I want to make it clear that, although I did question why it was submitted so long after the date that is written on it, and I did question how much weight I could place on its contents, I also stated that I was not persuaded by what Mrs R had said anyway. For clarity, in the PD I said: “But even if I am wrong about that, and the statement was written as the date suggests, when I consider what Mrs R has said in her statement, I am not persuaded that she and the late Mr R were, on the balance of probability, induced into purchasing FOC A and/or FOC B because of the possibility that the memberships could provide a profit. There is simply insufficient colour or context to what she has said to make me think that was the case. For example, there is no detail of who said what, where and in what context. Indeed, the only time any investment element was mentioned was when Time of Sale 1 was being described. It is not mentioned again.” So, for the avoidance of doubt, the date the statement was submitted to this Service is not something that I need to address further here. Even if I disregard that and accept that the statement was written on the date indicated, when I consider what is written, I do not find it sufficiently persuasive to uphold this complaint for any reason. It is also 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 relationships with Mrs R and the estate of Mr R weren’t unfair simply because they allege that they were, 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.”5 Section 140A of the CCA: did the Lender participate in an unfair credit relationship? The PR has maintained that Mrs R and the estate of Mr R’s credit relationships with the Lender were rendered unfair, because the Supplier misrepresented the memberships as providing Mrs R and the late Mr R with a guaranteed exit from the fractional memberships after a finite number of years. It says this is untrue as the fractional memberships can only be brought to an end if a purchaser can be found for the Allocated Property, and this cannot be guaranteed. 5 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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But the PR has not provided any new evidence to support that this misrepresentation was made – it has just repeated its assertion, and pointed out that the allegation was made at the outset of the complaint. But I have already addressed this issue in the PD when I was considering the complaint under Section 75 of the CCA. I said: “As regards the second alleged misrepresentation, while, as I understand it, the sale of the Allocated Property could be postponed in certain circumstances according to the club rules, Mrs R says little to nothing to persuade me that she and the late Mr R 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 there’s nothing else on file to support the PR’s allegation, I’m not persuaded that there was a representation by the Supplier on the issue in question that constituted a false statement of fact.” I then set out that I had also considered this under Section 140A of the CCA, but for the reasons I had already given I was not persuaded that any of the four memberships being considered here were actionably misrepresented at the Time(s) of Sale. And as no further evidence has been submitted in this respect, and having reconsidered everything, I remain of that opinion. However, there are, of course, other reasons for why the PR argues that the credit relationships in question were unfair. But having reconsidered the entirety of those relationships along with everything that has now been said and/or provided by both sides, I still don’t think the credit relationships between Mrs R and the estate of Mr R and the Lender were likely to have been rendered unfair to them 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(s) of Sale; 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 also reconsidered any commercial (including commission) arrangements between the Lender and the Supplier at the Time(s) of Sale and the disclosure of those arrangements. But I’ll turn now to what continues to be the main reason for the PR’s assertion that the credit relationship in question was unfair. The Supplier’s alleged breach of Regulation 14(3) of the Timeshare Regulations As I said in my provisional decision, given the nature of this allegation, it can only relate to the fractional purchases made by Mrs R and the late Mr R – FOC A and FOC B at Time of Sale 1 and 3. And as I also said, there is competing evidence in this complaint as to whether the FOC A and B memberships were marketed and/or sold by the Supplier at the Time(s) of Sale as investments in breach of Regulation 14(3) of the Timeshare Regulations.

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I acknowledged that it was possible that FOC A and FOC B memberships were marketed and sold to Mrs R and the late Mr R as investments 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, in response to the PD, 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 is a breach of Regulation 14(3) of the Timeshare Regulations. It says that therefore the contractual promise of property shares and guaranteed proceeds were the mechanisms used to unlawfully market the products as investments – thus rendering the associated credit relationships unfair under Section 140A of the CCA. But I do not agree that this was, itself, sufficient to create an unfair credit relationship. On my reading of Shawbrook & BPF v FOS, Mrs Justice Collins Rice didn’t find that a breach of Regulation14(3) of the Timeshare Regulations was "causative of the legal relations entered into". She recognised that such a breach was "conduct that knocks away the central consumer protection safeguard", but she went on to say that it was the ombudsmen behind the two reviewed decisions who found that such a breach was, given the facts and circumstances of the relevant complaints, causative of the consumers in question purchasing their timeshares and taking out loans to do so. What’s more, the Supreme Court’s judgment in Plevin makes it clear that regulatory breaches do not automatically create unfairness for the purposes of Section 140A. Such breaches and their consequences (if there are any) must be considered in the round, rather than in a narrow or technical way. I am also mindful of what HHJ Waksman QC (as he then was) and HHJ Worster had to say in Carney v NM Rothschild & Sons Ltd [2018] EWHC 958 (‘Carney’) and Kerrigan v Elevate Credit International Ltd [2020] EWHC 2169 (Comm) (‘Kerrigan’) (respectively) on causation. In Carney, HHJ Waksman QC said the following in paragraph 51: “[…] In cases of wrong advice and misrepresentation, it would be odd if any relief could be considered if they did not have at least some material impact on the debtor when deciding whether or not to enter the agreement. […] in a case like the one before me, if in fact the debtors would have entered into the agreement in any event, this must surely count against a finding of unfair relationship under s140A. […]” And in Kerrigan, HHJ Worster said this in paragraphs 213 and 214: “[…] The terms of section 140A(1) CCA do not impose a requirement of “causation” in the sense that the debtor must show that a breach caused a loss for an award of substantial damages to be made. The focus is on the unfairness of the relationship, and the court's approach to the granting of relief is informed by that, rather than by a demonstration that a 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

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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 Mrs R (and now the estate of Mr R) and the Lender that was unfair to them and warranted relief as a result, whether the Supplier’s breach of Regulation 14(3) led Mrs R and the late Mr R to enter into the relevant Purchase Agreement and 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 associated credit relationship between Mrs R (and the estate of Mr R) and the Lender unfair to them? Having found that it was possible that the Supplier breached Regulation 14(3) of the Timeshare Regulations at Time of Sale 1 and 3, I have considered (as I did in my provisional decision) what impact such breaches (if there were any) had on the fairness of the associated credit relationship between Mrs R and the estate of Mr R and the Lender under the Credit Agreement(s) and related Purchase Agreement(s). And on my re-reading of the evidence before me, I’m still not persuaded that the prospect of a financial gain from either of the FOC A or FOC B memberships was an important and motivating factor when Mrs R and the late Mr R decided to go ahead with either 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 there is simply insufficient colour or context to what Mrs R has said to make me think that was the case. For example, there is no detail of who said what, where and in what context. Indeed, the only time any investment element was mentioned was when Time of Sale 1 was being described. It is not mentioned again. And as I’ve said in the PD, Mrs R simply has not alleged, when her complaint was first made to the Lender, that the Supplier sold FOC A and/or FOC B to her and the late Mr R as investments, which is something I would have expected to have been included if it was important to her, or it led them to enter into the purchase and/or credit agreements. The PR has pointed to the section in the Letter of Complaint which alleges that they were told that the memberships had a guaranteed end date, but I do not agree that this suggests the memberships were sold as investments, nor that they were purchased as such. It merely sets out that the FOC A and FOC B were different to Mrs R and the late Mr R’s other points- based memberships. So, in the absence of such an allegation in the Letter of Complaint, and based on the evidence I have seen, I am not persuaded that the breaches of Regulation14(3) now alleged by the PR, even if true, are something that warrants relief in the circumstances of this case. That doesn’t mean they weren’t interested in a share in the Allocated Properties. After all, that wouldn’t be surprising given the nature of the product at the centre of this complaint. But as Mrs R herself, in what she has set out in her statement, doesn’t persuade me that their purchases were motivated by their shares in the Allocated Properties and the possibility of a profit, I don’t think breaches of Regulation 14(3) by the Supplier were likely to have been material to the decisions they ultimately made.

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On balance, therefore, for the reasons I’ve set out above and in my provisional decision, I don’t think the credit relationships between Mrs R and the estate of Mr R and the Lender were unfair to them even if the Supplier had breached Regulation 14(3). The provision of information by the Supplier at the Time of Sale In the PD I set out my thoughts in relation to the implications of the Supreme Court’s judgment in Hopcraft, Johnson and Wrench for this complaint. 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. The Lender has provided this Service with an unredacted copy of the commercial agreement it had with the Supplier at the Time(s) of Sale. However, having read it, I cannot see that there was any contractual tie between the Lender and the Supplier, such that the Supplier was required to place its customer’s loans with the Lender. And I have seen numerous examples of when loans were arranged by the Supplier with other lenders. And in this case, the Lender has provided evidence that it paid the Supplier: Credit Agreement 1: £985.92 - 8% of the loan and 8.7% of the charge for the credit. Credit Agreement 2: £37 – 1% of the loan and 1.36% of the charge for the credit. Credit Agreement 3: £50.80 – 1% of the loan and 1.36% of the charge for the credit. Credit Agreement 4: No commission paid. As I said in the PD these levels of commission, as a proportion of the charge for credit, were in stark contrast to the facts in Mr Johnson’s case. So, for the reasons I set out in my provisional findings on this matter, had Mrs R and the late Mr R known at the Time(s) of Sale that the Supplier was going to be paid a flat rate of commission at those levels, I am not persuaded that they either wouldn’t have understood that or would have otherwise questioned the size of the payment at the time. So, I think they would still have taken out the loans to fund their purchases at the Time(s) of Sale had the amount of commission been disclosed. What’s more, 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(s). And as it wasn’t acting as an agent of Mrs R and the late Mr R but as the supplier of contractual rights they obtained under the Purchase Agreement(s), the transactions don’t strike me as ones with features that suggest the Supplier had an obligation of ‘loyalty’ to them when arranging the Credit Agreement(s) and thus a fiduciary duty.

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I am aware that this commercial agreement has not been disclosed to the PR, and the PR has said that this non-disclosure is unfair and not in line with natural justice. But I am of a view which accords with this Service’s position in relation to the disclosure of this type of commercial agreement - I think it is appropriate for me to accept it in confidence in line with DISP 3.5.9 R. That Rule reads: “The Ombudsman may: 1. exclude evidence that would otherwise be admissible in a court or include evidence that would not be admissible in a court; 2. accept information in confidence (so that only an edited version, summary or description is disclosed to the other party) where he considers it appropriate; 3. reach a decision on the basis of what has been supplied and take account of the failure by a party to provide information requested; and 4. treat the complaint as withdrawn and cease to consider the merits if a complainant fails to supply requested information.” In this instance, I consider that the commercial agreement between the Lender and the Supplier is plainly commercially sensitive and therefore I exercise my discretion to accept it in confidence. But again, I can say that under this commercial agreement I cannot see that Mrs R and the late Mr R have paid more for these loans than they otherwise would have because of a financial incentive paid to the Supplier. And while I recognise that the PR might disagree with my provisional findings, it hasn’t offered any evidence and/or arguments that lead me to think that the factors referenced by the Supreme Court have a bearing on the outcome of this complaint given its circumstances; or there are any other reasons why the commercial (including commission) arrangements between the Supplier and the Lender rendered the credit relationship(s) between the latter and Mrs R and the late Mr R (and now his estate) under the Credit Agreement(s) and related Purchase Agreement(s) unfair for the purposes of Section 140A. In response to my provisional decision, the PR also argues that there was a lack of a proper valuation of the Allocated Property. However, 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 Mrs R and the estate of Mr R sufficient information, in good time, on the value of the property, neither they nor the PR have persuaded me that she and the late Mr R were deprived of information that would have led them to make different purchasing decisions at the Time(s) of Sale when I’ve already found that the prospect of a financial gain from the sale of the Allocated Properties was not an important and motivating factor behind their purchases. 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 relationships in question unfair to Mrs R and the estate of Mr R. Conclusion Having adopted my provisional findings, and having reconsidered the facts and circumstances of this complaint, I still don’t think the Lender acted unfairly or unreasonably when it dealt with Mrs R and the estate of Mr R’s Section 75 claims. I’m also not persuaded that the Lender was party to a credit relationship with Mrs R and the late Mr R (and now his estate) that was unfair to them 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 Mrs R and the estate of Mr R. My final decision I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs R and the estate of Mr R to accept or reject my decision before 28 April 2026. Chris Riggs Ombudsman

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