Clydesdale Financial Services Limited · DRN-5846465

The complaint Mrs A’s complaint is, in essence, that Clydesdale Financial Services Limited trading as Barclays Partner Finance (the ‘Lender’) acted unfairly and unreasonably by (1) being party to an unfair credit relationship with 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. Background to the complaint Mrs A and her husband Mr A were members of a timeshare provider (the ‘Supplier’) – having purchased a number of products from it over time. But the product at the centre of this complaint is their membership of a timeshare called ‘the European Collection’ – points in which they purchased on the dates below: • 4,000 European Collection points on 30 December 2009 for £4,680 (‘Purchase Agreement 1’) • 20,000 European Collection points on 21 February 2012 for £10,000 (‘Purchase Agreement 2’) (which, when appropriate, I’ll simply refer to as the ‘Purchase Agreements’) As this complaint is concerned with the purchases on 30 December 2009 and 21 February 2012, those are the ‘Times of Sale’ for the purposes of my decision. Mrs A paid for the European Collection points by taking the following amounts of finance in her name only from the Lender: • £4,680 on 30 December 2009 (‘Credit Agreement 1’). She later settled this Credit Agreement on 13 July 2010. • £8,000 on 21 February 2012 (‘Credit Agreement 2’) (the outstanding £2,000 having been paid by Mrs A at the Time of Sale). She later settled this Credit Agreement on 7 November 2013. (when appropriate, I’ll simply refer to these as the ‘Credit Agreements’) As Mrs A was the only borrower named on the Credit Agreements, this complaint has been brought in her name only.

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Mrs A – using a professional representative (the ‘PR’) – wrote to the Lender on 16 January 2017 (the ‘Letter of Complaint’) to raise a number of different concerns about the purchases at the Times of Sale, and about another previous purchase that was also financed by the Lender. This complaint only concerns the purchases at the Times of Sale, as the concerns raised about the other purchase are being dealt with separately. As the concerns raised about the purchases at the Times of Sale haven’t changed since they were first raised, and as both sides are familiar with them, it’s not necessary to repeat them in detail here beyond the summary above. The Lender dealt with Mrs A’s concerns as a complaint and issued its final response letter on 14 March 2017, 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, thought: • In relation to Credit Agreement 1: Mrs A’s complaint about the Lender’s participation in an unfair credit relationship with her under Section 140A of the CCA had been made too late with regard to the relevant time limits, and while her complaint about the Lender’s handling of her claims under Section 75 of the CCA had been made in time, that part of her complaint should not be upheld. • In relation to Credit Agreement 2: Mrs A’s complaints had been made in time, but they should not be upheld. Mrs A disagreed with the Investigator’s assessment and asked for an Ombudsman’s decision. So, the complaint was passed to me to decide. I considered the matter and issued a provisional decision (the ‘PD’) dated 11 September 2025. In that decision I explained my provisional findings (which form part of this final decision) were as follows: “The Financial Ombudsman Service’s jurisdiction We can’t consider all complaints brought to this service. Before we can consider a complaint, we need to check whether the complaint is one we have the power to look at. The limits of our power to consider a complaint are set out in the Rules under section two of the Dispute part (‘DISP’) of the Financial Conduct Authority’s (‘FCA’) Handbook. I’ve carefully considered these rules when deciding whether we can consider Mrs A’s complaint. DISP 2.8.2 R sets out that: “The Ombudsman cannot consider a complaint if the complainant refers it to the Financial Ombudsman Service: … (2) more than: (a) six years after the event complained of; or (if later) (b) three years from the date on which the complainant became aware (or ought reasonably to have become aware) that he had cause for complaint;

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unless the complainant referred the complaint to the respondent or to the Ombudsman within that period and has a written acknowledgement or some other record of the complaint having been received; unless (3) in the view of the Ombudsman, the failure to comply with the time limits in DISP 2.8.2 R…was as a result of exceptional circumstances; or… (5) the respondent has consented to the Ombudsman considering the complaint where the time limits in DISP 2.8.2 R…have expired…” The Lender hasn’t consented to us considering Mrs A’s complaint. So, to be able to consider the complaint, it needs to have been made within these time limits, unless there were exceptional circumstances that prevented Mrs A from complaining in time. Part A – the six year time limit Mrs A’s complaint concerns the Lender’s decision to decline her Section 75 claims, and the Lender’s participation in unfair credit relationships with her. Although Mrs A raised these concerns under one complaint, they relate to different activities of the Lender that took place at different times. Consequently, it is necessary to consider first when the Lender undertook each activity separately. The Lender’s decision to decline Mrs A’s Section 75 claims The alleged misrepresentations that form the grounds for one of Mrs A’s claims under Section 75 of the CCA occurred at the Times of Sale in December 2009 and February 2012 respectively. Neither she nor the PR have stated when the alleged breach of contract occurred that forms the grounds for her other claim under this section of the CCA. However, the activity of the Lender that Mrs A has complained about here is its handling of those claims. The Lender issued its response to Mrs A's claims in relation to both Credit Agreements in its final response letter dated 14 March 2017. So for the purposes of DISP 2.8.2 R (2)(a), the event complained of here was still ongoing when Mrs A complained about it. Clearly then these parts of her complaint have been made in time, and are therefore within our jurisdiction to consider. The Lender’s participation in unfair credit relationships The events complained of here are the allegations that the Lender participated in unfair credit relationships with Mrs A, and that while the relationships were ongoing, the Lender failed in its responsibilities to take the necessary steps to correct those situations. Mrs A entered into Credit Agreements with the Lender on 30 December 2009 and 21 February 2012. So in turn the Lender’s participation in the credit relationships arising from those agreements commenced on those dates as well.

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However, an assessment of unfairness under Section 140A isn’t limited to what happened immediately before or at the time a credit agreement and related agreement were entered into. The High Court held in Patel v Patel [2009] EWHC 3264 (QB) (and approved by the Supreme Court in the case of Smith v Royal Bank of Scotland Plc [2023] UKSC 34), that determining whether or not the relationship complained of was unfair had to be made “having regard to the entirety of the relationship and all potentially relevant matters up to the time of making the determination” – which was the date of the trial in the case of an existing credit relationship or otherwise the date the credit relationship ended. Mrs A settled Credit Agreement 1 with the Lender on 13 July 2010. The Lender has provided us with an account summary statement for the Agreement that shows the finance was fully repaid on that date, which means the credit relationship relating to the Agreement between Mrs A and the Lender came to an end on that date as well. So for the purposes of DISP 2.8.2 R (2)(a), the event complained of here took place on 13 July 2010. Mrs A’s complaint was first made to the Lender when the PR sent the Letter of Complaint to it January 2017. That is more than six years after the event complained of in relation to Credit Agreement 1. Consequently, Mrs A’s complaint about the Lender’s participation in an unfair credit relationship under Credit Agreement 1 could only have been made in time if it was made within the time limits at DISP 2.8.2 R (2)(b). Mrs A entered into Credit Agreement 2 on 21 February 2012, which was less than six years before she complained about it. Therefore, her complaint about the Lender’s participation in an unfair credit relationship under Credit Agreement 2 has been made in time. Part B – the three year rule The point at which Mrs A ought to have become aware of a cause to make this complaint is when she had actual or constuctive knowledge of the problem she now complains about, that the problem may cause her a loss (or had already done so), and that the respondent (in this case, the Lender) may be responsible for causing it. Mrs A made her complaint about the Lender’s participation in an unfair credit relationship with her under Section 140A of the CCA for a number of reasons. She hasn’t told us when she first became aware of a cause for complaint or what it was that led her to complain when she did. The PR has provided us with a statement from Mrs A in which she said, amongst other things, that: “I think, in many ways, the pressure to keep buying points put so insidiously was in itself mis-selling. We now know that one didn’t need the amount we were told we needed in order to have good holidays. Also, they weren’t as flexible as they made out. Yes there were many resorts in the system. But many of them weren’t that available. They sounded great but in reality they weren’t. And we were also sold this product on the basis of exclusivity. But one could have rented the same apartments for less than the cost of points and the management fee from [third party website]. And as we found out, it was often easier to rent one from [third party website] than from [the Supplier].”

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This indicates to me that some of the causes of Mrs A’s dissatisfaction with how European Collection membership was sold to her were that she had been led to believe the membership provided access to exclusive resorts when that wasn’t true, and that the resorts were not as readily available as had been made out to her at the Time of Sale. I think these issues would have been apparent to her, or ought reasonably to have been apparent to her, early on in her use of the membership. The evidence is that Mrs A made use of the membership in February 2012 at least (if not before), when she decided to make the second of the two purchases that are the subject of this complaint. Clearly, Mrs A would have identified the Supplier as the party responsible for how European Collection membership had been sold to her. But she would also have known her purchase of European Collection membership had been financed by the Lender, and that the Supplier had brokered the finance. Considering the significant financial commitment she had taken on to purchase European Collection membership, and the gravity of the concerns she had about how it had been sold to her, I think it’s reasonable to expect that she would have made enquiries to the Lender at that time about the responsibilities it owed her. Had she done that, I think she would have established that the Lender owed responsibilities to her that meant it may be responsible for the problem. As such, I consider that by February 2012 at the latest, Mrs A had actual or constructive knowledge of: • The problem this part of her complaint is about because she had concerns about how European Collection membership had been sold to her; • The loss this had caused her because she knew she had taken out finance to purchase European Collection membership; and • The Lender’s responsibility for that as a result of the enquiries that it’s reasonable to expect she would have made given the gravity of her concerns and the significant financial commitment she had taken on. It is therefore my view that Mrs A became aware, or ought reasonably to have become aware, of a cause for complaint about the Lender’s participation in an unfair credit relationship with her under Credit Agreement 1 by February 2012 at the latest. Mrs A’s complaint about that was made more than three years later, so it was also made outside the time limits under DISP 2.8.2 R (2)(b). Consequently, this part of her complaint was made too late. Exceptional circumstances I can waive the time limits if the failure to comply with them was due to exceptional circumstances. But neither Mrs A nor the PR have referred us to any exceptional circumstances that prevented her from complaining sooner within their submissions throughout the course of this complaint. Therefore, I’ve found Mrs A’s failure to comply with the time limits was not due to exceptional circumstances. So, I’m unable to waive the time limits. Section 75 of the CCA: the Supplier’s misrepresentations at the Time of Sale As I’ve explained above, this part of Mrs A’s complaint (and the part of her complaint about the Lender’s handling of her breach of contract claim that I’ll deal with shortly) falls within the jurisdiction of the Financial Ombudsman Service, so I am able to consider it.

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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. Credit Agreement 1 In general, lenders can reasonably reject Section 75 claims that they are first informed about after the claim has become time-barred under the Limitation Action 1980 (the ‘LA’) as it wouldn’t be fair to expect creditors to look into such claims so long after the liability arose, and after a limitation defence would have been available in court. So while I note the Lender did not reject Mrs A’s claims for this reason, it is relevant to consider if Mrs A’s Section 75 claims were time-barred under the LA before they were put to the Lender. A claim for misrepresentation against the Supplier would ordinarily be made under Section 2(1) of the Misrepresentation Act 1967. And the limitation period to make such a claim expires six years from the date on which the cause of action accrued. Any claim against a lender under Section 75 is also “an action to recover any sum by virtue of any enactment” under Section 9 of the LA. Such claims also have a time limit of six years from the date the cause of action accrued. In claims for misrepresentation, the cause of action accrues at the point a loss is incurred. In Mrs A’s case, that was at the Times of Sale because she entered into the agreements to purchase European Collection membership, and the related Credit Agreements to finance the purchases, based on the alleged misrepresentations of the Supplier which she says she relied on. Mrs A first notified the Lender of her Section 75 claims in January 2017. As that was more than six years after the Time of Sale in relation to Credit Agreement 1, I don’t think it was unfair or unreasonable of the Lender to reject the part of her claim relating to the Supplier’s alleged misrepresentations in relation to that Credit Agreement. Credit Agreement 2 The same cannot be said in relation to Credit Agreement 2 because Mrs A notified the Lender of her Section 75 claims within six years of the Time of Sale relating to that Agreement. So the Lender could not reasonably reject her claims in relation to this Agreement for the same reason. Mrs A and the PR have said that European Collection membership was misrepresented by the Supplier at the Time of Sale because Mrs A was told or led to believe by the Supplier that European Collection membership: (1) had a guaranteed end date when that was not true. (2) was the only way of releasing her and her husband from their existing membership when that was not true.

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(3) was exclusive to them (and other members) when that was not true. Point 1 doesn’t seem to me to have been a misrepresentation because the European Collection membership did in fact have a contractual end date. The ‘Key Information’ document that accompanied the Purchase Agreement set out: “Exact period within which the right which is the subject of the contract may be exercised and, if necessary, its duration: Subject to the following, your membership of the European Collection will last until 31st December 2054. On that date, the European Collection will be dissolved and your membership will terminate. Your right to use your Points throughout this time may be exercised for as long as you hold an active membership in the European Collection.” It seems likely to me that the Supplier would have told Mrs A about the end date of the membership. But that wouldn’t seem to be a false statement of fact. With regard to point 2, as the purchase in question provided Mrs A with European Collection points in addition to the points she had already acquired within that membership, it doesn’t seem logical or plausible that the Supplier would have made the representation at point 2 in this instance. In any event, there isn’t enough evidence on file to support the PR’s allegation that European Collection membership had either been misrepresented for reasons relating to point 2, or point 3. Therefore, I’m not persuaded that there were representations by the Supplier on the issues in question that constituted false statements of existing fact. So, while I recognise that Mrs A and the PR have concerns about the way in which European Collection membership was sold by the Supplier, when looking at this 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 I don’t think that the Lender acted unreasonably or unfairly when it dealt with this particular Section 75 claim. Section 75 of the CCA: the Supplier’s breach of contract The PR says that the Supplier breached the Purchase Agreements because there is no guarantee that Mrs A will receive her share of the net sale proceeds of the Allocated Property. Mrs A later went on to purchase membership of a timeshare called ‘Fractional Club’ from the Supplier which was asset backed – which meant it gave her a share in the net sale proceeds of a property named on the Purchase Agreement (the ‘Allocated Property’) relating to her purchase of Fractional Club membership. However, European Collection membership wasn’t asset backed, and so it did not give Mrs A an interest in the sale proceeds of a property in the way that Fractional Club membership did. Therefore I’ve found the Lender is not liable to pay Mrs A any compensation for a breach of contract by the Supplier because these contracts do not include the provision that the PR alleges the Supplier has (or will, in future) breach. 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.

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Section 140A of the CCA: did the Lender participate in an unfair credit relationship under Credit Agreement 2? I’ve already explained why I’m not persuaded that European Collection membership was actionably misrepresented by the Supplier at the Time of Sale. But there are other aspects of the sales process that, being the subject of dissatisfaction, I must explore with Section 140A in mind if I’m to consider this complaint in full – which is what I’ve done next. The PR says, for instance, that: 1. The right checks weren’t carried out before the Lender lent to Mrs A; 2. Mrs A was pressured by the Supplier into purchasing European Collection membership at the Time of Sale; and 3. European Collection membership was marketed and sold as an investment in breach of a prohibition on doing so. However, having considered the entirety of the credit relationship between 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: 1. The standard of the Supplier’s commercial conduct – which includes its sales and marketing practices at the Time of Sale along with any relevant training material; 2. The provision of information by the Supplier at the Time of Sale, including the contractual documentation and disclaimers made by the Supplier; 3. Evidence provided by both parties on what was likely to have been said and/or done at the Time of Sale; 4. The inherent probabilities of the sale given its circumstances; and, when relevant 5. Any existing unfairness from a related credit agreement. I have then considered the impact of these on the fairness of the credit relationship between Mrs A and the Lender. The Supplier’s sales & marketing practices at the Time of Sale While the PR says that the right affordability checks weren’t carried out at the Time of Sale, even if I were to find that the Lender failed to do everything it should have when it agreed to lend (and I make no such finding), I would have to be satisfied that the money lent to Mrs A was actually unaffordable before also concluding that she lost out as a result, and then consider whether the credit relationship with the Lender was unfair to her for this reason. But from the information provided, I’m not satisfied that the lending was unaffordable for Mrs A.

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I acknowledge that Mrs A may have felt weary after a sales process that went on for a long time. But she says little about what was said and/or done by the Supplier during their sales presentation that made her feel as if she had no choice but to purchase European Collection membership when she simply did not want to. She was also given a 14-day cooling off period and a credible explanation hasn’t been provided for why she didn’t cancel her membership during that time. And with all of that being the case, there is insufficient evidence to demonstrate that Mrs A made the decision to purchase European Collection membership because her ability to exercise that choice was significantly impaired by pressure from the Supplier. Overall, therefore, I don’t think that Mrs A’s credit relationship with the Lender was rendered unfair to her under Section 140A for any of the reasons above. But there is another reason, perhaps the main reason, why the PR says the credit relationship with the Lender was unfair to her. And that’s the suggestion that European Collection membership was marketed and sold to her as an investment in breach of the 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 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 says that the Supplier did exactly that at the Time of Sale. The term “investment” is not defined in the Timeshare Regulations. But for the purposes of this provisional decision, and by reference to the decided authorities, an investment is a transaction in which money or other property is laid out in the expectation or hope of financial gain or profit. As I’ve explained above, European Collection membership wasn’t asset backed, so it didn’t give Mrs A an interest in the sale proceeds of a property in the way that Fractional Club membership did. As such, European Collection membership did not include a means by which Mrs A could have hoped or expected to profit from it. It follows that the Supplier would not likely have marketed or sold membership to Mrs A as an investment because it didn’t include an investment element. Consequently, I’ve found the Supplier did not breach Regulation 14(3) of the Timeshare Regulations. And for that reason, I don’t think the credit relationship between Mrs A and the Lender was unfair to her.” I also indicated that I would provide my findings on the issue of commission once I knew more about that given the circumstances of Mrs A’s complaint. I did that by email on 4 March 2026, saying:

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“I provisionally found Mrs A’s complaint about the Lender’s participation in an unfair credit relationship with her under Section 140A of the CCA in relation to Credit Agreement 1 was made too late and cannot be considered by the Financial Ombudsman Service. So, I’m unable to consider if her credit relationship with the Lender under that agreement was unfair to her for reasons relating to commission. But I provisionally found that I can consider her unfair credit relationship complaint in relation to Credit Agreement 2. So I have addressed whether the credit relationship under that agreement was unfair to her for reasons relating to commission. The provision of information by the Supplier at the Time of Sale for Credit Agreement 2 The PR says that a payment of commission from the Lender to the Supplier at the Time of Sale should lead me to uphold this complaint because, simply put, information in relation to that payment went undisclosed at the Time of Sale. As both sides already know, the Supreme Court handed down an important judgment on 1 August 2025 in a series of cases concerned with the issue of commission: Johnson v FirstRand Bank Ltd, Wrench v FirstRand Bank Ltd and Hopcraft v Close Brothers Ltd [2025] UKSC 33 (‘Hopcraft, Johnson and Wrench’). The Supreme Court ruled that, in each of the three cases, the commission payments made to car dealers by lenders were legal, as claims for the tort of bribery, or the dishonest assistance of a breach of fiduciary duty, had to be predicated on the car dealer owing a fiduciary duty to the consumer, which the car dealers did not owe. A “disinterested duty”, as described in Wood v Commercial First Business Ltd & ors and Business Mortgage Finance 4 plc v Pengelly [2021] EWCA Civ 471, is not enough. However, the Supreme Court held that the credit relationship between the lender and Mr Johnson was unfair under Section 140A of the CCA because of the commission paid by the lender to the car dealer. The main reasons for coming to that conclusion included, amongst other things, the following factors: 1. The size of the commission (as a percentage of the total charge for credit). In Mr Johnson’s case it was 55%. This was “so high” and “a powerful indication that the relationship…was unfair” (see paragraph 327); 2. The failure to disclose the commission; and 3. The concealment of the commercial tie between the car dealer and the lender. The Supreme Court also confirmed that the following factors, in what was a non-exhaustive list, will normally be relevant when assessing whether a credit relationship was/is unfair under Section 140A of the CCA: 1. The size of the commission as a proportion of the charge for credit; 2. The way in which commission is calculated (a discretionary commission arrangement, for example, may lead to higher interest rates); 3. The characteristics of the consumer;

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4. The extent of any disclosure and the manner of that disclosure (which, insofar as Section 56 of the CCA is engaged, includes any disclosure by a supplier when acting as a broker); and 5. Compliance with the regulatory rules. From my reading of the Supreme Court’s judgment in Hopcraft, Johnson and Wrench, it sets out principles which apply to credit brokers other than car dealer–credit brokers. So, when considering allegations of undisclosed payments of commission like the one in this complaint, Hopcraft, Johnson and Wrench is relevant law that I’m required to consider under DISP 3.6.4 R. But I don’t think Hopcraft, Johnson and Wrench assists Mrs A in arguing that her credit relationship with the Lender under Credit Agreement 2 was unfair to her for reasons relating to commission given the facts and circumstances of this complaint. I haven’t seen anything to suggest that the Lender and Supplier were tied to one another contractually or commercially in a way that wasn’t properly disclosed to Mrs A. Nor have I seen anything that persuades me the commission arrangement between them gave the Supplier a choice over the interest rate that led Mrs A into a credit agreement that cost disproportionately more than it otherwise could have. I acknowledge it’s possible that the Lender and the Supplier failed to follow the regulatory guidance in place at the Time of Sale insofar as it was relevant to disclosing the commission arrangements between them. But as I’ve said before, the case law on Section 140A makes it clear that regulatory breaches do not automatically create unfairness for the purposes of that provision. Such breaches and their consequences (if there are any) must be considered in the round, rather than in a narrow or technical way. And with that being the case, it isn’t necessary to make a formal finding on that because, even if the Lender and the Supplier failed to follow the relevant regulatory guidance at the Time of Sale, it’s for the reasons set out below that I don’t currently think any such failure is itself a reason to find the credit relationship in question was unfair to Mrs A. In stark contrast to the facts of Mr Johnson’s case, the amount of commission paid by the Lender to the Supplier for arranging Credit Agreement 2 wasn’t high. At £204.00, it was only 2.55% of the amount borrowed and only slightly more than that (3.66%) as a proportion of the charge for credit. So, had she known at the Time of Sale that the Supplier was going to be paid a flat rate of commission at that level, I’m not currently persuaded that she either wouldn’t have understood that or would have otherwise questioned the size of the payment at that time. After all, Mrs A wanted the timeshare and had no obvious means of her own to pay for it. And at such a low level, the impact of commission on the cost of the credit she needed for a timeshare she wanted doesn’t strike me as disproportionate. So, I think she would still have taken out the loan to fund her purchase at the Time of Sale had the amount of commission been disclosed.

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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 Credit Agreement 2. And as it wasn’t acting as an agent of Mrs A but as the supplier of contractual rights she obtained under Purchase Agreement 2, the transaction doesn’t strike me as one with features that suggest the Supplier had an obligation of ‘loyalty’ to her when arranging Credit Agreement 2, and thus a fiduciary duty. Overall, therefore, I’m not currently persuaded that the commission arrangements between the Supplier and the Lender were likely to have led to a sufficiently extreme inequality of knowledge that rendered the credit relationship under Credit Agreement 2 unfair to Mrs A. 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’m not persuaded that the credit relationship between Mrs A and the Lender under Credit Agreement 2 and related Purchase Agreement 2 was unfair to her. And as things currently stand, I don’t think it would be fair or reasonable that I uphold this complaint on that basis. Commission: The alternative grounds of complaint While I’ve found that Mrs A’s credit relationship with the Lender under Credit Agreement 2 wasn’t unfair to her for reasons relating to the commission arrangements between it and the Supplier, two of the grounds on which I came to that conclusion also constitute separate and freestanding complaints to Mrs A’s complaint about an unfair credit relationship. So, for completeness, I’ve considered those grounds on that basis here. The first ground relates to whether the Lender is liable for the dishonest assistance of a breach of fiduciary duty by the Supplier because it took a payment of commission from the Lender without telling Mrs A (i.e. secretly). And the second relates to the Lender’s compliance with the regulatory guidance in place at the Time of Sale insofar as it was relevant to disclosing the commission arrangements between them. However, for the reasons I set out above, I’m not persuaded that the Supplier – when acting as credit broker – owed Mrs A 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 her. And while it’s possible that the Lender failed to follow the regulatory guidance in place at the Time of Sale insofar as it was relevant to disclosing the commission arrangements between itself and the Supplier, I don’t think any such failure on the Lender’s part is itself a reason to uphold this complaint. That’s because, for the reasons I also set out above, I think she would still have taken out the loan to fund her purchase at the Time of Sale had there been more adequate disclosure of the commission arrangements that applied at that time.”

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In summary, given the facts and circumstances of this complaint, I did not think this Service had the jurisdiction to consider Mrs A’s complaint about the Lender’s participation in an unfair credit relationship with her under Section 140A of the CCA under Credit Agreement 1. I also did not think the Lender acted unfairly or unreasonably when it dealt with the relevant Section 75 claims, and I was not persuaded that the Lender was party to a credit relationship with Mrs A under Credit Agreement 2 that was unfair to her for the purposes of Section 140A of the CCA. And having taken everything into account, I could see no other reason why it would be fair or reasonable to direct the Lender to compensate Mrs A, which led me to the provisional conclusion that there was no basis on which to uphold this complaint. The Lender confirmed it agreed with my provisional conclusions. The PR disagreed with my overall conclusion. When doing that, it provided significant submissions at first, but it went on to withdraw them and replace them with more concise submissions. Those latter submissions were expressly limited to Mrs A’s purchase in February 2012, and were primarily concerned with the allegation that European Collection membership was actionably misrepresented to her by the Supplier at that time because she was told: 1. That she would achieve a profit from renting out her accommodation when that was not true. 2. That she would be able to get out of her existing membership and get money back when that was not true. The PR also repeated its concerns about the pressure Mrs A was put under by the Supplier at the Time of Sale, and the Lender’s decision to lend being irresponsible. As a result, the complaint was passed back to me for further consideration and my final fecision. 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. Having done that afresh, I’m not persuaded to depart from my PD for reasons I’ll now explain. Before I do, I want to make it clear that I recognise that this complaint, when originally made, related to two purchases of timeshare products financed by the Lender, was wide ranging and made on a number of different grounds - including: (1) Misrepresentations by the Supplier at the Times of Sale giving Mrs A a claim against the Lender under Section 75 of the CCA, which the Lender failed to accept and pay. (2) A breach of contract by the Supplier giving Mrs A a claim against the Lender under Section 75 of the CCA, which the Lender failed to accept and pay. (3) The Lender being party to an unfair credit relationship under the Credit Agreement and related Purchase Agreement for the purposes of Section 140A of the CCA. In view of the PR’s more concise response to my PD being limited to Mrs A’s purchase in February 2012, I see no reason to depart from, or add to, the conclusions I reached in my PD in relation to her purchase in December 2009. As such, from here onwards I’ll only refer to her purchase in February 2012.

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In addition, as the PR’s more concise response to my PD relates, in the main, to (1) and (3), as I have not been provided with new arguments and/or evidence to consider in relation to (2), I see no reason to change or add to my conclusions (as set out in the summary of my PD above) in relation to it. Indeed, as I said in my PD, my role as an Ombudsman is to decide what’s fair and reasonable in the circumstances of this complaint – rather than address every single point that’s been made. And with that being the case, while I have read all of the PR’s submissions in full, if I have not commented on, or referred to, something that either party has said, that does not mean I have not considered it. What’s more, it’s 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 PD that, under Section 140B(9) of the CCA, it’s for the Lender to prove its credit relationship with Mrs A was not unfair simply because she alleges it was, that fails to understand that the Financial Ombudsman Service deals with complaints rather than causes of action. And, in any event, to suggest that unsubstantiated allegations of fact must be disproved by the Lender if the credit relationship is not 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.”1 The legal and regulatory context The legal and regulatory context that I think is relevant to this complaint has been shared in several hundred published decisions on very similar complaints, as well as in previous correspondence with the parties. So, there’s no need for me to set this out again in detail here. I simply remind the parties that our rules2 say that in considering what’s 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. 1 As approved by the Supreme Court in Smith v. The Royal Bank of Scotland plc [2023] UKSC 34 – see paragraph 40. 2 Specifically Rule 3.6.4 in the Dispute Resolution Rules found in the Financial Conduct Authority’s Handbook for Rules and Guidance.

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Section 75 of the CCA: the Supplier’s misrepresentations at the Time of Sale It was argued by the PR, when this complaint was first made, that the Supplier misrepresented Fractional Club membership at the Time of the Sale. The reasons for this aspect of this complaint at that time were addressed in my PD, and I see no reason to change or add to them. But in response to my PD, the PR argues that the cost of European Collection membership to Mrs A was so high that, as such, the following representations by the Supplier were misrepresentations: 1. She would achieve a profit from renting out her accommodation. 2. She would be able to get out of her existing membership and get money back. The PR takes that view because it says the evidence suggests that (1) by its own calculations, given the initial and ongoing costs of European Collection membership, it was never possible for Mrs A to make a profit from renting out her accommodation, and (2) European Collection membership was not asset backed so it could not have provided an exit route from membership with a financial return from the sale of an underlying property. The law relating to misrepresentation is a combination of the common law, equity and statute – though, as I understand it, the Misrepresentation Act 1967 didn’t alter the rules as to what constitutes an effective misrepresentation. Summarising the relevant pages in Chitty on Contracts, a material and actionable misrepresentation is an untrue statement of existing fact or law made by one party (or his agent for the purposes of passing on the representation, acting within the scope of his authority) to another party that induced that party to enter into a contract. However, a mere statement of opinion, rather than fact or law, which proves to be unfounded, isn’t a misrepresentation unless the opinion amounts to a statement of fact and it can be proved that the person who gave it did not hold it or could not reasonably have held it. It also needs to be shown that the other party understood and relied on the implied factual misrepresentation. In support of its argument, the PR has directed me to the following questions and answers it says Mrs A gave on a questionnaire she completed to support her complaint: “22. Were you ever advised that there was an option to exit your membership? [Mrs A ticked “yes”] 23. If the answer to 22 is ‘yes’, please explain what you understood that option to be. “That we could sell back our timeshare at any time.” 24. What were the main reasons for you to enter into a contract with the timeshare owner? “It gave us a get-out clause with money back. Also we could make money by renting through marketing, who would pay us on sales they made by renting our weeks. (sic)””

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Mrs A’s answers to these questions do not make out what was said, by whom and in what circumstances for the purposes of determining whether the Supplier made the alleged representations, and if they amounted to false statements of existing fact. Furthermore, Mrs A’s answers to the other questions on the questionnaire strongly suggest she completed it with a different timeshare purchase in mind. Mrs A said elsewhere on the questionnaire that the purchase in question was made in Tenerife, that she understood she was purchasing “Fractions,” and that she was 69 years old at the time. However, Mrs A was not 69 years old at the Time of Sale (nor was her husband who also signed the questionnaire), and it was recorded on the Purchase Agreement that it was signed at “THH,” which as I understand it, refers to one of the Supplier’s resorts in the UK. There’s also evidence before me that shows Mr and Mrs A purchased a fractional timeshare while on a holiday in Tenerife in 2013, at which time Mr A would have been 69 years old. So I also do not find the answers Mrs A gave on the questionnaires relate to the purchase she made at the Time of Sale. As a result, I’m not persuaded by the questionnaires the PR has directed me to that the Supplier made the representations at (1) and (2) at the Time of Sale in this case. Aside from those questionnaires, the documents I have seen relating to Mrs A’s purchase at the Time of Sale confirm that the Supplier operated a rental programme which provided her with the opportunity to get some money back in exchange for giving up the use of her points. So a representation that she could get some money back by renting out her membership was not untrue. But none of these documents made any promises that she would profit from doing that, nor does any of the other evidence I’ve seen persuade me that the Supplier would likely have made representations to that effect. As I said in my PD, Mrs A’s purchase at the Time of Sale provided her with more European Collection points to add to the points she had already acquired within that membership. It did not provide her with a shorter membership term or different rights to exit that membership. And European Collection membership was not asset backed, so it did not give her an interest in the sale proceeds of a property. In that context, it seems inherently unlikely to me that the Supplier would have made the representation at (2), and the evidence I’ve seen that relates to the Time of Sale does not persuade me otherwise. So, in summary, I’m not persuaded by the questionnaires the PR has directed me to that the Supplier made the representations at (1) and (2) at the Time of Sale in this case. And as the other evidence before me does not support the PR’s argument that European Collection membership was misrepresented to her for reasons (1) or (2), I’m not persuaded by its allegations of misrepresentation. With that being the case, they too aren’t reasons to uphold this complaint and direct the Lender to compensate Mrs A. Section 140A of the CCA: did the Lender participate in an unfair credit relationship? I’ve already explained why, in light of the PR’s latest allegations of misrepresentation, I’m not persuaded that European Collection membership was actionably misrepresented by the Supplier at the Time of Sale. And it’s for those reasons that I don’t think the credit relationship between Mrs A and the Lender was rendered unfair to her on the basis that membership had been misrepresented.

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However, there are, of course, other reasons why the PR argues that the credit relationship in question was unfair. But having reconsidered the entirety of that relationship along with everything that has now been said and/or provided by both sides, I still don’t think the credit relationship between Mrs A and the Lender was likely to have been rendered unfair to her for the purposes of Section 140A. When coming to that conclusion, I have looked again at: 1. The standard of the Supplier’s commercial conduct – which includes its sales and marketing practices at the Time of Sale along with any relevant training material; 2. The provision of information by the Supplier at the Time of Sale, including the contractual documentation and disclaimers made by the Supplier; 3. Evidence provided by both parties on what was likely to have been said and/or done at the Time of Sale; 4. The inherent probabilities of the sale given its circumstances; and, when relevant 5. Any existing unfairness from a related credit agreement. The PR continues to argue that: 1. The Lender’s decision to lend to Mrs A was, in essence, irresponsible; and 2. Mrs A was pressured by the Supplier into purchasing Fractional Club membership at the Time of Sale. However, as neither the PR nor Mrs A have submitted any new evidence to further either of the arguments above, it’s for the same reasons I gave in my PD that I don’t think either of them render her credit relationship with the Lender unfair to her for the purposes of Section 140A. Conclusion Having adopted my provisional findings, and reconsidered the facts and circumstances of this complaint, I still don’t think this Service has the jurisdiction to consider Mrs A’s complaint about the Lender’s participation in an unfair credit relationship with her under Section 140A of the CCA under Credit Agreement 1. I still don’t think the Lender acted unfairly or unreasonably when it dealt with her Section 75 claims. And I’m still not persuaded that the Lender was party to a credit relationship with her under Credit Agreement 2 that was 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 for me to direct the Lender to compensate her.

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My final decision For the reasons set out above, I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs A to accept or reject my decision before 27 April 2026. Asa Burnett Ombudsman

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