First Holiday Finance Limited · DRN-6264843

The complaint Mrs C’s complaint is, in essence, that First Holiday Finance Limited (the ‘Lender’) acted unfairly and unreasonably by (1) being party to an unfair credit relationship with her under Section 140A of the Consumer Credit Act 1974 (as amended) (the ‘CCA’) and (2) deciding against paying a claim under Section 75 of the CCA. Background to the Complaint Mrs C purchased membership of a timeshare (the ‘Fractional Club’) from a timeshare provider (the ‘Supplier’) on 11 August 2015 (the ‘Time of Sale’). She and her partner entered into an agreement with the Supplier to buy 1,070 fractional points at a cost of £10,609 (the ‘Purchase Agreement’). Fractional Club membership was asset backed – which meant it gave Mrs C more than just holiday rights. It also included a share in the net sale proceeds of a property named on the Purchase Agreement (the ‘Allocated Property’) after her membership term ends. Mrs C paid for her Fractional Club membership by trading in an existing membership she held with the Supplier, paying a deposit of £500, taking finance to fund the remaining balance of £10,109 from the Lender (the ‘Credit Agreement’)1. Mrs C – using a professional representative (the ‘PR’) – wrote to the Lender in March 20252 (the ‘Letter of Complaint’) to raise a number of different concerns. As those concerns haven’t changed since they were first raised, and as both sides are familiar with them, it isn’t necessary to repeat them in detail here beyond the summary above. The Lender dealt with Mrs C’s concerns as a complaint and issued its final response letter on 10 April 2025, rejecting it on every ground. The complaint was then referred to the Financial Ombudsman Service. It was assessed by an Investigator who, having considered the information on file, rejected the complaint on its merits. Mrs C disagreed with the Investigator’s assessment and asked for an Ombudsman’s decision – which is why it was passed to me. I issued my provisional decision (the ‘PD’) to the parties on 18 March 2026. In my PD, I said: “I have considered all the available evidence and arguments to decide what is fair and reasonable in the circumstances of this complaint. And having done that, I do not currently think this complaint should be upheld. 1 The PR has given the loan sum as £9,360.00 in its Letter of Complaint, but this is incorrect. 2 The letter carries the date 27 March 2023, but I think the PR has provided the wrong date as the Lender says it received it in March 2025 and the first witness statement document carries the date of 16 March 2025.

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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. The complaint about the Lender’s handling of Mrs C’s Section 75 claim The CCA introduced a regime of connected lender liability under section 75 that affords consumers (“debtors”) a right of recourse against lenders that provide the finance for the acquisition of goods or services from third-party merchants (“suppliers”) in the event that there is an actionable misrepresentation and/or breach of contract by the supplier. Certain conditions must be met if the protection afforded to consumers is engaged, including, for instance, the cash price of the purchase and the nature of the arrangements between the parties involved in the transaction. The Lender doesn’t dispute that the relevant conditions are met. But for reasons I’ll come on to below, it isn’t necessary to make any formal findings on them here. It was said in the Letter of Complaint that Fractional Club membership had been misrepresented by the Supplier at the Time of Sale because Mrs C was: (1) told by the Supplier that the membership would secure holiday accommodation for the duration of the contract, as she could book from the many options available. (2) told by the Supplier that the purchase was an “investment” and could be sold at a later date for a profit. The PR says that the Supplier made a statement that was untrue as the membership was not as described. However, I don’t think it would be fair or reasonable to uphold this complaint about the Lender’s handling of Mrs C’s claims. I’ll explain why. As I’ve explained, Mrs C’s claim for misrepresentation under Section 75 CCA is a “like” claim against the Lender which mirror the claims she could make against the Supplier. And so, it wouldn’t be fair to expect the Lender to pay claims that arose after such a limitation defence would be available to the Supplier in court. As such, it’s a relevant for me to consider whether Mrs C’s claim was time-barred under the Limitation Act 1980 (‘LA’) before the PR first raised them with the Lender on her behalf. 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. Mrs C’s claim is subject to the limitation periods set out under Sections 2 and 9 of the LA, which are both six years from the date on which the cause of action accrued. The date on which the cause of action accrued was at the Time of Sale. I say this because Mrs C entered into the Purchase Agreement at that time based on alleged misrepresentations of the Supplier, which she now says she relied upon when deciding whether or not to make the purchase. And the Credit Agreement was used to finance the purchase, so it was when Mrs C entered into this that she suffered a loss.

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Mrs C first notified the Lender of the claims against it in March 2025, which was more than six years after the Time of Sale3. With that being the case, I don’t think it was unfair or unreasonable of the Lender to decline to pay the claim she made against it for the Supplier’s alleged misrepresentations. Section 140A of the CCA: did the Lender participate in an unfair credit relationship? I’ve already explained why I’m not persuaded that Fractional Club membership was actionably misrepresented by the Supplier at the Time of Sale. But there are other aspects of the sales process that, being the subject of dissatisfaction, I must explore with Section 140A in mind if I’m to consider this complaint in full – which is what I’ve done next. Having considered the entirety of the credit relationship between Mrs C 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; and 4. The inherent probabilities of the sale given its circumstances. I have then considered the impact of these on the fairness of the credit relationship between Mrs C and the Lender. The Supplier’s sales & marketing practices at the Time of Sale Mrs C’s complaint about the Lender being party to an unfair credit relationship was and is made for several reasons. They include, for various reasons, the allegation that the Supplier misled Mrs C and carried on unfair commercial practices under Regulations 5 and 6 of the CPUT Regulations. However, as Regulations 5 and 6 state, commercial practices only amount to misleading actions or omissions if, in addition to satisfying one or more of the specific matters set out in those provisions, they cause or are likely to cause the average consumer to take a transactional decision they would not have taken otherwise. And as I haven’t seen enough evidence to persuade me that, if there were any such actions or omissions at the Time of Sale (which I make no formal finding on), they led Mrs C to make the purchasing decision she did, I’m not persuaded that anything done or nor done by the Supplier amounted to an unfair commercial practice for the purposes of those provisions. The PR also alleges that the Supplier acted unfairly under Regulation 7 Schedule 1 of the CPUT Regulations. But given the limited evidence in this complaint, I am not persuaded that the Supplier did. In addition, the PR also says that: 3 As I noted above, the PR’s letter carries the date of 27 March 2023. For the reasons I’ve given above, I think the PR made a mistake when it wrote the letter, but I will also point out that the date given on the letter is also more than six years after the Time of Sale in any case.

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1. Mrs C was pressured by the Supplier into purchasing Fractional Club membership at the Time of Sale. 2. there was one or more unfair contract terms in the Purchase Agreement. However, as things currently stand, neither of these strike me as reasons why this complaint should succeed. I acknowledge that Mrs C may have felt weary after a sales process that went on for a long time. Having said that, she says in her testimony that the sales presentation lasted around three hours in total, which I do not consider to be overly long. In any case, she says little about what was said and/or done by the Supplier during her sales presentation that made her feel as if she had no choice but to purchase the Fractional Club membership when she simply did not want to. She was also given a 14-day cooling off period and she has not provided a credible explanation for why she did not cancel her membership during that time. And with all of that being the case, there is insufficient evidence to demonstrate that Mrs C made the decision to purchase Fractional Club membership because her ability to exercise that choice was significantly impaired by pressure from the Supplier. Overall, therefore, I don’t think that Mrs C’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 now says the credit relationship with the Lender was unfair to her. And that’s the suggestion that Fractional Club membership was marketed and sold to her as an investment in breach of prohibition against selling timeshares in that way. The Supplier’s alleged breach of Regulation 14(3) of the Timeshare Regulations The Lender does not dispute, and I am satisfied, that Mrs C’s Fractional Club membership met the definition of a “timeshare contract” and was a “regulated contract” for the purposes of the Timeshare Regulations. Regulation 14(3) of the Timeshare Regulations prohibited the Supplier from marketing or selling Fractional Club membership as an investment. This is what the provision said at the Time of Sale: “A trader must not market or sell a proposed timeshare contract or long-term holiday product contract as an investment if the proposed contract would be a regulated contract.” But the PR and Mrs C say that the Supplier did exactly that at the Time of Sale – saying the following: “However, it is clear that that the Supplier told Our Clients about their entitlement to sell their membership, that the membership was an investment, and that they would get back the money they invested, plus a specific profit.” The term “investment” is not defined in the Timeshare Regulations. But for the purposes of this provisional decision, and by reference to the decided authorities, an investment is a transaction in which money or other property is laid out in the expectation or hope of financial gain or profit. A share in the Allocated Property clearly constituted an investment as it offered Mrs C the prospect of a financial return – whether or not, like all investments, that was more than what she first put into it. But it is important to note at this stage that the fact that Fractional Club membership included an investment element did not, itself, transgress the prohibition in Regulation 14(3). That provision prohibits the marketing and selling of a timeshare contract as an investment. It doesn’t prohibit the mere existence of an investment element in a

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timeshare contract or prohibit the marketing and selling of such a timeshare contract per se. In other words, the Timeshare Regulations did not ban products such as the Fractional Club. They just regulated how such products were marketed and sold. To conclude, therefore, that Fractional Club membership was marketed or sold to Mrs C as an investment in breach of Regulation 14(3), I have to be persuaded that it was more likely than not that the Supplier marketed and/or sold membership to her as an investment, i.e. told her or led her to believe that Fractional Club membership offered her the prospect of a financial gain (i.e., a profit) given the facts and circumstances of this complaint. There is competing evidence in this complaint as to whether Fractional Club membership was marketed and/or sold by the Supplier at the Time of Sale as an investment in breach of regulation 14(3) of the Timeshare Regulations. On the one hand, it is clear that the Supplier made efforts to avoid specifically describing membership of the Fractional Club as an ‘investment’ or quantifying to prospective purchasers, such as Mrs C, the financial value of their share in the net sales proceeds of the Allocated Property along with the investment considerations, risks and rewards attached to them. On the other hand, I acknowledge that the Supplier’s sales process left open the possibility that the sales representative may have positioned Fractional Club membership as an investment. So, I accept that it’s equally possible that Fractional Club membership was marketed and sold to Mrs C as an investment in breach of Regulation 14(3). However, whether or not there was a breach of the relevant prohibition by the Supplier is not ultimately determinative of the outcome in this complaint for reasons I will come on to shortly. And with that being the case, it’s not necessary to make a formal finding on that particular issue for the purposes of this decision. Was the credit relationship between the Lender and the Consumer rendered unfair? Having found that it was possible that the Supplier breached Regulation 14(3) of the Timeshare Regulations at the Time of Sale, I now need to consider what impact that breach had on the fairness of the credit relationship between Mrs C and the Lender under the Credit Agreement and related Purchase Agreement as the case law on Section 140A makes it clear that regulatory breaches do not automatically create unfairness for the purposes of that provision. Such breaches and their consequences (if there are any) must be considered in the round, rather than in a narrow or technical way. Indeed, it seems to me that, if I am to conclude that a breach of Regulation 14(3) led to a credit relationship between Mrs C and the Lender that was unfair to her and warranted relief as a result, whether the Supplier’s breach of Regulation 14(3) led her to enter into the Purchase Agreement and the Credit Agreement is an important consideration. But on my reading of the evidence before me, the prospect of a financial gain from Fractional Club membership was not an important and motivating factor when Mrs C decided to go ahead with her purchase. I say this because I have considered her testimony, which is not signed or dated, but was provided to the Lender with the Letter of Complaint in March 2025. In this, she says:

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“In the presentations we were also given different types of incentives in either a financial or levels of accommodation, together with promising fantastic, out of this world and luxurious holidays. When we signed the second time when we upgraded to the ‘Signature’ collection type of accommodation and as an incentive, we were given an Ipad by an Agent called [Name]. In terms of other incentives we were told that this would be a sound and profitable investment for our future and that because it would be a ‘fractional’ type of ownership that after 19 years or so, should we wish to purchase an apartment fully then a large percentage would be taken off the final purchasing price. We agreed on the day that we would go ahead as looking back you get so wrapped up in what is on offer and you are in holiday mode so everything seems so far away from reality and wonderful in this bubble that they have put you in that you agree that this would be a sound financial investment but looking back we couldn’t afford it but they assured us that they could offer us their own financial services so we ended up paying over £400.00 a month for the initial purchase and then the second one that upgraded us to the ‘signature’ level to which we have never had the pleasure of using as then covid hit, my Mum died and my Husband got made redundant.” To me, Mrs C makes it clear that she was interested in the holidays she could expect to receive in the apartment. She also makes it clear that she was interested in the potential to save money on a future apartment purchase as she was told she would receive a reduction on the purchasing price. I have thought about that aspect of the sale, and I have found the following term in the Member’s Declaration document, which has been initialled by one of Mrs C or her partner: “13. Freehold / whole ownership opportunities: We understand that if we should wish to buy one of the freehold / whole ownership properties developed and owned by [the Supplier] we will be entitled to trade in our Fraction (at the original price we paid to [the Supplier]) for a discount on the purchase price of the property (up to a maximum of 7% of the purchase price) subject to: (a) Specific restrictions on individual properties, availability and to demand for areas and unit types. All applications are subject to contract and will be managed on a “first come first served” principle. (b) Trade in values do not increase with time or inflations. (c) Other terms and conditions apply …” So, I think it is likely that the Supplier used the potential to trade the membership towards a whole property ownership purchase in the future, and that Mrs C was interested in this possibility. But I do not see the above term as being suggestive of the Fractional Club membership increasing in value and leading to a potential profit in the future. After all, it clearly states that the trade in value does not increase over time. I recognise that Mrs C also says more generally that she was told that the Fractional Club would be a “sound and profitable investment for our future”. But she does not explain why she was led to believe that it was. I have also read and considered the document provided with this complaint titled “Supplementary Witness Statement”. This was only created after the PR received the Lender’s final response letter, and as such, I don’t think I can place as much weight on that testimony as I think it’s likely to have been influenced by both the PR’s Letter of Complaint and the Lender’s final response. Here, Mrs C provides more recollections of the events at the Time of Sale. She says:

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“18. In terms of other incentives we were told that this would be a sound and profitable investment for our future and that because it would be a ‘fractional’ type of ownership that after 19 years or so, should we wish to purchase an apartment fully then a large percentage would be taken off the final purchasing price. 19. We were told that after the term of 19 years we would be able to purchase the property in full at a very reduced price or that we would be given a cash sum. 20. This is actually the reason why we decided to sign up. That if we wished to purchase after the 19 year term that we would have the price reduced considerably or we would be given a cash sum for the value increase over the past 19 years. This is what we were told, so obviously this was explained to us as an investment. 21. Also, that we would have fabulous and luxurious holidays that could be taken anytime and at reduced points and that all our needs would be met and at the same time be part owners. 22. We were definitely told that the membership would be for 19 years and that this would secure at least one week in April every year unless we wanted to swop [sic] the week. 23. In order to achieve this we would need to buy our points and they would be banked and then we would be able to book at a more convenient time. 24. However, to be able to go when we could, we would need to save points for at least 2 years as April points were not worth as much as say August points which are peak times.” So, although I think I can place less weight on what Mrs C says here, I note that the first paragraph is identical to what she says in her earlier testimony. But she has expanded this to confirm that one reason that she went ahead because she could purchase a property with a discount at the end of the term, or that she would receive a “cash sum”. It is true that she would receive money back after the end of the membership term, as that is how the Fractional Club membership worked. But I am not persuaded that she was under the impression that the amount returned to her would be greater than what she paid in. And I think she was also motivated by the prospect of taking future holidays with the increased number of points she would have at her disposal to take holidays. She has explained how this would work, and that she would need to save the points to take holidays at peak times, so I think she knew how the membership worked and how it would provide her and her family with future holidays that suited them. She previously held a membership that only provided points every other year, so by upgrading to the Fractional Club membership in question, she gained enough points to be able to take the holidays she required. I have also read and considered some email correspondence between Mrs C and the Supplier. Mrs C had raised a complaint with the Supplier about its decision to not reinstate her points when she cancelled a holiday with five days’ notice. Here, Mrs C was very unhappy that the Supplier did not allow her to keep the points to carry over to the next year. To me, she clearly wanted to take the holidays and keep the points even in years that she was unable to use them. So, I think these emails show me that she was particularly motivated by the prospect of taking future holidays and I don’t think they show any sign that she was interested in the future sale of the Allocated Property. That doesn’t mean she wasn’t interested in a share in the Allocated Property. After all, that wouldn’t be surprising given the nature of the product at the centre of this complaint. But as Mrs C herself doesn’t persuade me that her purchase was motivated by her share in the Allocated Property and the possibility of a profit, I don’t think a breach of Regulation 14(3) by the Supplier was likely to have been material to the decision she ultimately made.

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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 C’s decision to purchase Fractional Club membership at the Time of Sale was motivated by the prospect of a financial gain (i.e., a profit). On the contrary, I think the evidence suggests she would have pressed ahead with her purchase whether or not there had been a breach of Regulation 14(3). And for that reason, I do not think the credit relationship between Mrs C and the Lender was unfair to her even if the Supplier had breached Regulation 14(3). The provision of information by the Supplier at the Time of Sale The PR says that Mrs C were not given sufficient information at the Time of Sale by the Supplier about the ongoing costs of Fractional Club membership. The PR also says that the contractual terms governing the ongoing costs of membership and the consequences of not meeting those costs were unfair contract terms. As I’ve already indicated, the case law on Section 140A makes it clear that it does not automatically follow that regulatory breaches create unfairness for the purposes of the unfair relationship provisions. The extent to which such mistakes render a credit relationship unfair must also be determined according to their impact on the complainant. I acknowledge that it is also possible that the Supplier did not give Mrs C sufficient information, in good time, on the various charges they could have been subject to as Fractional Club members in order to satisfy the requirements of Regulation 12 of the Timeshare Regulations (which was concerned with the provision of ‘key information’). But even if that was the case, I cannot see that the ongoing costs of membership were applied unfairly in practice. And as neither Mrs C nor the PR have persuaded me that she would not have pressed ahead with her purchase had the finer details of the Fractional Club’s ongoing costs been disclosed by the Supplier in compliance with Regulation 12, I cannot see why any failings in that regard are likely to be material to the outcome of this complaint given its fact and circumstances. As for the PR’s argument that there were one or more unfair contract terms in the Purchase Agreement, I can’t see that any such terms were operated unfairly against Mrs C in practice, nor that any such terms led her to behave in a certain way to her detriment. And with that being the case, I’m not persuaded that any of the terms governing Fractional Club membership are likely to have led to an unfairness that warrants a remedy. Mrs C’s personal representative (“the PR”) asserted on behalf of Mrs C that the payment of commission made the financial arrangement unfair. The PR didn’t give a level of commission at which it considered unfairness arose, but its arguments included the following: • Despite requests, there had been no disclosure of the actual amount of commission paid by the Lender to the Supplier • per the Court of Appeal’s judgment in Johnson4, the percentage of commission should be based upon “the sum borrowed” • the amount of the annual percentage rate of interest (“APR”) is key and was unusually high, substantially increasing the total charge for credit • Commission paid by the Supplier to its self-employed sales representatives should also be disclosed and taken into account in the calculation used to determine 4 The PR’s submission references the Court of Appeal judgment (Johnson v FirstRand Bank Limited, Wrench v FirstRand Bank Limited and Hopcraft v Close Brothers [2024] EWCA Civ 1106 (“Johnson”)). The Supreme Court has since handed down its judgment clarifying the position in law.

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unfairness Did the commission arrangements render the credit relationship unfair? My reading of the Supreme Court’s judgment in Hopcraft, Johnson and Wrench is that it sets out principles which can apply to credit brokers other than car dealer–credit brokers. So I’ve taken into account those principles when considering the allegations of undisclosed payments of commission in this complaint. In Hopcraft, Johnson and Wrench the Supreme Court ruled that, in each of the three cases, commission payments made to car dealers by lenders were legal, as claims for the tort of bribery, or the dishonest assistance of a breach of fiduciary duty, had to be predicated on the car dealer owing a fiduciary duty to the consumer, which the car dealers did not owe. A “disinterested duty”, as described in Wood v Commercial First Business Ltd & ors and Business Mortgage Finance 4 plc v Pengelly [2021] EWCA Civ 471, is not enough. However, the Supreme Court held that the credit relationship between the lender and Mr Johnson was unfair under section 140A of the CCA because of the commission paid by the lender to the car dealer. The main reasons for coming to that conclusion included, amongst other things, the following factors: • The size of the commission (as a percentage of the total charge for credit). In Mr Johnson’s case it was 55%. This was “so high” and “a powerful indication that the relationship…was unfair”5; • The failure to disclose the commission; and • The concealment of the commercial tie between the car dealer and the lender. The Supreme Court also confirmed that the following factors, in what was a non-exhaustive list, will normally be relevant when assessing whether a credit relationship was/is unfair under section 140A of the CCA: • The size of the commission as a proportion of the charge for credit; • The way in which commission is calculated (a discretionary commission arrangement, for example, may lead to higher interest rates); • The characteristics of the consumer; • The extent of any disclosure and the manner of that disclosure (which, insofar as section 56 of the CCA is engaged, includes any disclosure by a supplier when acting as a broker); and • Compliance with the regulatory rules. After careful consideration, I don’t think Hopcraft, Johnson and Wrench assists Mrs C in arguing that her credit relationship with the Lender was unfair to her for reasons relating to commission, given the facts and circumstances of this complaint. I haven’t seen anything to suggest the Lender and Supplier were tied to one another contractually or commercially in a way that wasn’t properly disclosed to Mrs C. Nor have I seen anything that persuades me that the commission arrangements between them gave the Supplier a choice over the interest rate that led Mrs C into a credit agreement that cost disproportionately more than it otherwise could have. 5 Hopcraft, Johnson and Wrench (para 327).

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I recognise that it’s possible the Lender and the Supplier failed to follow the regulatory guidance in place at the Time of Sale insofar as it was relevant to disclosing the commission arrangements between them. But as I noted in my provisional decision, case law on section 140A makes clear that regulatory breaches do not automatically lead to an unfair credit relationship, and that such breaches and any consequences must be considered in the round rather than in a narrow or technical way. With that being the case, even if the Lender and the Supplier failed to follow the relevant regulatory guidance at the Time of Sale, I’m not minded to think any such failure is itself a reason to find the credit relationship in question unfair to Mrs C. I say this for the following reasons. Fundamentally, in stark contrast to the facts in Mr Johnson’s case, the Lender has provided evidence that there was no payment of commission to the Supplier for arranging Mrs C’s Credit Agreement. I can’t see, therefore, that any of the arguments made around a failure to disclose that fact could possibly succeed, particularly as it can’t be shown that Mrs C would have made a different decision about whether to take out the loan had she known there was no commission. What’s more, based on what I’ve seen so far, the Supplier’s role as a credit broker wasn’t a separate service and distinct from its role as the seller of timeshares. It was simply a means to an end in the Supplier’s overall pursuit of a successful timeshare sale. I can’t see that the Supplier gave an undertaking – either expressly or impliedly – to put to one side its commercial interests in pursuit of that goal when arranging the Credit Agreement. As it wasn’t acting as an agent of Mrs C but as the supplier of contractual rights she obtained under the Purchase Agreement, the transaction doesn’t strike me as one with features that suggest the Supplier had an obligation of ‘loyalty’ to her when arranging the Credit Agreement and thus a fiduciary duty. I don’t consider it necessary for me to take into account any commission the Supplier might have paid to its sales representatives, or that this should be disclosed or factored into any calculation used to determine unfairness. Even if any such arrangement was in place (and I make no finding in this respect), its disclosure and/or payment would be further removed from any obligations the Supplier might have held, and even less likely to have an impact on Mrs C’s decision to enter into the Credit Agreement. I'm aware of the factors the PR feels should be taken into account in calculating the loan APR and commission. However, I'm satisfied it's appropriate that I follow the approach set out in the Supreme Court judgment. Overall, I don’t intend to conclude that the commission arrangements between the Supplier and the Lender were likely to have led to a sufficiently extreme inequality of knowledge that rendered the credit relationship unfair to Mrs C.” In summary, I wasn’t minded to think that the Lender acted unfairly or unreasonably when it dealt with Mrs C’s section 75 claim. I didn’t find any of the arguments put forward demonstrated that the credit agreement between Mrs C and the Lender was unfair to her under section 140A of the CCA. Absent any other reason why it would be fair or reasonable to direct the Lender to compensate Mrs C, I said I didn’t propose to uphold the complaint. Responses to my provisional findings The Lender accepted my PD. The PR didn’t accept the proposed outcome. It made further submissions in support of Mrs C’s position. Having received and reviewed these, I’m now proceeding with my final decision.

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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 rules6 say that in considering what is fair and reasonable in all the circumstances of the complaint, I will take into account: relevant (i) law and regulations; (ii) regulators’ rules, guidance and standards; and (iii) codes of practice; and (where appropriate), what I consider to have been good industry practice at the relevant time. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. After considering the case afresh and having regard for what’s been said in response to my PD, I find it offers no persuasive reason to depart from the conclusions I’ve previously set out. I’ll explain why. In doing so, I remind the PR that my role as an Ombudsman is not to address every single point that has been made to date. Instead, it is to decide what is fair and reasonable in the circumstances of this complaint. So, if I have not commented on, or referred to, something that either party has said, that does not mean I have not considered it. Section 75 of the CCA: the Supplier’s misrepresentations at the Time of Sale. The PR has argued that the time limit to bring the claims under Section 75 of the CCA should be extended by Section 32 of the LA. But I do not see any reason why it is unfair or unreasonable to conclude that Section 2 and Section 9 of the LA are relevant as I have done here. After all, the PR is not seeking damage for negligence, and it has not persuaded me that it would be fair or reasonable to apply the time limits set out under Section 32 of the LA or explained why that section applies here. Section 140A of the CCA: did the Lender participate in an unfair credit relationship? The Supplier’s alleged breach of Regulation 14(3) of the Timeshare Regulations The PR has reiterated that Mrs C says, in her testimony, that “[t]his is actually the reason why we decided to sign up”. But it has not provided me with any compelling evidence or submissions to persuade me that my analysis of her testimony provided in the PD is incorrect. So, I see no reason to depart from the conclusions I reached in the PD about Mrs C’s motivations when she decided to enter the Purchase Agreement. The provision of information by the Supplier at the Time of Sale As I’ve noted, the PR has disagreed with my provisional conclusions on whether the Lender should pay redress because of an unfair credit relationship arising in connection with commission arrangements between the Lender and the Supplier. The PR says, in summary, that when the overall circumstances of those arrangements are considered in the round, the credit relationship was plainly unfair. In support of this position the PR has expressed, among other things, that a conflict of interest existed on the part of the Supplier, who provided neither independent nor competent explanation of the credit. 6 Financial Conduct Authority (“FCA”) Handbook – DISP 3.6.4R (“R” denotes a rule).

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I have read and considered the submissions made by the PR on behalf of Mrs C. But I don’t find what it has said offers persuasive grounds for me to reach a different conclusion on this issue. The PR’s response doesn’t offer anything that leads me to think that, for the most part, any of the factors it has referenced were in fact at play in Mrs C’s case. It hasn’t, for example, provided evidence to show the existence of commercial or contractual ties that were concealed from Mrs C, any persuasive reasons to conclude that the Supplier’s role was that of advisor to Mrs C, or to show that any other conflict of interest arose from the roles the Supplier did perform. For such a claim to be successful would require more than the bare assertions that have been made in this case. I’m not persuaded that it is sufficient, as the PR seems to contend, simply to suggest unsubstantiated allegations of fact and require that the Lender disprove them else the credit relationship be deemed unfair. This issue was considered in the judgment in Promontoria (Henrico) Ltd v. Gurcharn Samra [2019] EWHC 2327 (Ch) (“Samra”), where HHJ David Cooke held (at para.26): “…the onus is on the claimant7 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 Mr Samra8 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.”9 I’m satisfied the Lender has provided sufficient information in response to my enquiries to enable me to reach a conclusion about its commission arrangements with the Supplier. I’ve seen nothing in this case that leads me to think what the Lender has said about there being no commission paid is inaccurate. So there's no reason for me to reach a different finding over those commission arrangements. Other matters The PR reiterates that the sale was pressured and that the “reliance on a cooling-off period is misplaced” and that I should consider “real-world consumer behaviour, not theoretical safeguards”. I disagree that I have relied upon the existence of a cooling-off period – after all, I say that I think there’s insufficient evidence that she was pressured into the purchase. And I do not agree that her rights to cancel were “theoretical” – her sales documents clearly gave her that right and the PR has still not provided me with a credible explanation as to why Mrs C did not cancel the membership if she only went ahead with her purchase because she felt pressured by the Supplier. 7 In this case the creditor answering a claim of an unfair credit relationship arising out of an overdraft facility. 8 In this case the borrower making an allegation that there was an unfair credit relationship. 9 I further note that in Wilson v Clydesdale Financial Services Ltd t/a Barclays Partner Finance [2021] (Unreported), the court also took the view that the burden is on the debtor to prove on the balance of probabilities the facts that purportedly create the unfairness. It is then that the lender's burden of proof that requires it to prove the relationship was not unfair kicks in. While I do not suggest this offers legal precedent, the subject matter of that case was a fractional timeshare sale, and given the similarities seems to me an appropriate approach when considering the facts in this case.

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The PR says that Mrs C could not afford the agreement and wishes to “challenge the absence of any meaningful consideration of affordability”. In its Letter of Complaint, the PR did not raise a complaint or any concerns about the Lender’s decision to agree to lend Mrs C the money. So, to date, this aspect of the sale has not formed part of the complaint and this is why I have not covered the decision to lend as part of my consideration of the relationship between Mrs C and the Lender. The PR says that Mrs C did raise affordability in her testimony. In Mrs C’s testimony, she says: "…looking back we couldn’t afford it but they assured us that they could offer us their own financial services". But as I read it, Mrs C is not alleging in her testimony that the lending was unaffordable for her at the Time of Sale. Instead, she says that she could not afford to pay for the Fractional Club membership without the Lender’s offer of credit. I see no reason for this fact alone to create any unfairness between her and the Lender – after all, Mrs C wanted to buy the membership and the Lender offered her the money to buy it when she did not have any obvious means to pay for it herself. The PR says that Mrs C was “nonetheless approved for finance exceeding £400 per month”. But this simply isn’t true – Mrs C’s monthly loan repayments were set at £144.07 per month – and I can see that she repaid the full amount in December 2021, having never fallen behind her repayments. I am aware that Mrs C refers to her “initial” purchase costing her “over £400 per month”, but I can see that her existing loan repayments (which were arranged with a different lender and fall outside the scope of this complaint) were £220.61, not £400. Regardless of the total cost of the loan and the repayments Mrs C was required to make, the PR’s recent allegations are not supported by the facts of Mrs C’s complaint, or her own testimony. Having considered everything I have seen, there is simply no persuasive evidence that the lending was unaffordable for Mrs C, so I don’t think the relationship between her and the Lender was unfair for this reason. Section 140A: Conclusion Given all of the factors I’ve looked at in this part of my decision, and having taken all of them into account, I remain unpersuaded that the credit relationship between Mrs C and the Lender under the Credit Agreement and related Purchase Agreement was unfair to her such that it warrants the Lender offering any redress. Conclusion After careful reconsideration of the facts and circumstances of this complaint, I adopt my provisional conclusions as part of my final decision. For the reasons I’ve given above and in my earlier correspondence I’ve mentioned, I don’t think the Lender acted unfairly or unreasonably when it dealt with Mrs C’s section 75 claim. And I’m not persuaded that the Lender was party to a credit relationship with Mrs C that was unfair to her for the purposes of section 140A of the CCA. Having taken everything into account, I see no other reason why it would be fair or reasonable for me to direct the Lender to compensate Mrs C. My final decision For the reasons set out above, my final decision is that I don’t uphold this complaint.

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Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs C to accept or reject my decision before 28 April 2026. Andrew Anderson Ombudsman

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