Shawbrook Bank Limited · DRN-6262091

The complaint Mr and Mrs J have complained that Shawbrook Bank Limited (‘Shawbrook’) hasn’t paid a claim they made under section 75 of the Consumer Credit Act 1974 (‘CCA’). And they say their creditor-debtor relationship with Shawbrook was unfair to them under section 140A of the CCA. What happened In October 2013, Mr and Mrs J purchased membership of a timeshare called ‘1492 Suites@LaPintaBeachClub’ (‘Membership 1’) from Las Vista Marketing SL (the ‘Supplier’). The membership included the use of a specific apartment (Apt 415) for two specific weeks (weeks 44 and 45), and the use of another apartment (Apt 300) for one week (week 46). It also entitled Mr and Mrs J to a proportionate share of the net sale proceeds of both apartments when they’re sold in 2030 – this type of timeshare is sometimes called a ‘fractional ownership timeshare’. Mr and Mrs J ‘traded-in’ some existing timeshare, which left €30,000 to pay. Mr and Mrs J completed the paperwork to borrow the money from Shawbrook. However, they cancelled this loan during the withdrawal period and paid for Membership 1 with their own funds. In November 2014, Mr and Mrs J purchased an extra week (week 47) for Apt 300 (‘Membership 2’) on the same terms. It cost €10,975 and they borrowed £9,000 from Shawbrook to pay for it. In November 2015, Mr and Mrs J purchased a week (week 30) for Apt 15 (‘Membership 3’) – again, on the same terms as before. It cost €16,216 and they borrowed £12,000 from Shawbrook to help pay for it. In October 2019, Mr and Mrs J – using a professional representative (‘PR’) – wrote to Shawbrook to complain about the purchases and the related loans. Specifically, the complaint letter said Mr and Mrs J only purchased weeks 46 and 47 for Apt 300 and week 30 for Apt 15 to rent them out because the Supplier guaranteed that it would rent them out for Mr and Mrs J every year until 2030, and that the rental income was guaranteed to be €1,000 per week. The letter explained that the rental income has been significantly less than this and alleged that Mr and Mrs J were misled by the Supplier. What’s more, it says that as the Supplier’s sales department has now closed, ‘the rental and resale promises will remain unfulfilled’ and that Mr and Mrs J are now ‘trapped’ with memberships that were sold as investments. When Shawbrook didn’t provide a substantive response, the PR referred the complaint to our service. This complaint has been considered by two different investigators. Both rejected it on its merits. Mr and Mrs J’s PR asked for a final decision from an ombudsman.

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I issued a provisional decision on 13 March 2026, which explained why I didn’t intend to uphold this complaint. It included the following provisional findings: Membership 1 For the avoidance of doubt, as Mr and Mrs J paid for Membership 1 with their own funds, Shawbrook isn’t liable for any alleged wrongdoing by the Supplier. Memberships 2 and 3 Section 75 Section 75 of the CCA protects consumers who buy goods and services on credit. It says, if certain conditions are met, that the finance provider is legally answerable for any misrepresentation or breach of contract by the supplier. A misrepresentation is an untrue statement made by one party to another that induces that party to enter into a contract. In the complaint letter, the PR says the Supplier told Mr and Mrs J in November 2014 that it was proving difficult to rent a single week – i.e. week 46 for Apt 300 which they purchased in 2013 – but ‘if they bought another week for rental purposes [the Supplier] would definitely be able to rent both weeks out for them each year’. It says that’s why Mr and Mrs J purchased week 47 for Apt 300. However, the PR says the Supplier subsequently told Mr and Mrs J in November 2015 that it hadn’t been able to rent out weeks 46 and 47 for Apt 300 ‘as promised’, but it said the summer weeks had all been rented out and that Mr and Mrs J should purchase a summer week for rental purposes. Mr and Mrs J therefore purchased week 30 for Apt 15. The PR says during ‘each negotiation’, Mr and Mrs J were assured that the weeks purchased to rent would ‘guarantee them’ €1,000 per week, which would cover their annual maintenance fees and provide a ‘profit’. It says they were told ‘categorically that the rentals were guaranteed and promised a minimum amount per week’. However, until very recently, the PR hadn’t provided any first-hand testimony from Mr and/or Mrs J. In July 2025 – almost six years after it first complained to Shawbrook and around ten years after the events complained about – the PR sent our service a short, handwritten letter from Mr and Mrs J. In full, it says: ‘The only reason we became timeshare owners was the sales pitch promising that we would make money by renting out our weeks. This promise was the only reason we purchased 5 weeks. When the system changed to Fractional Ownership we were again told it would be very profitable for us as after the 10 year period was up we could expect a lot of money back.’ There appears to be a discrepancy between the complaint letter and Mr and Mrs J’s recent testimony in that the former says Mr and Mrs J purchased ‘2 weeks for their own use’ whereas Mr and Mrs J now seem to be saying they purchased all 5 weeks to rent. What’s more, it’s not clear if the first paragraph of the letter relates to Memberships 1, 2 and 3 (which were fractional ownership timeshares) or Mr and Mrs J’s earlier timeshare memberships – they seem to mark a distinction between the two at the start of the second paragraph. In any event, even if I set aside those concerns, I don’t think I can place sufficient weight on Mr and Mrs J’s testimony to conclude that they were misled in the way alleged when they

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purchased Memberships 2 and 3. They don’t distinguish between the three different fractional sales; nor do they provide any detail about what was supposedly said or the context in which it was said. For example, they don’t explain why, if the Supplier reneged on its ‘promise’ to rent week 46, and its subsequent ‘promise’ to weeks 46 and 47, they accepted it at its word when it promised to rent week 30. What’s more, the PR has made two very specific allegations: first, that the rentals were guaranteed; second, that a minimum amount per week was guaranteed. Mr and Mrs J don’t say either. They simply say the Supplier told them they would make money. In the circumstances, I’m not persuaded that there was a misrepresentation by the Supplier for which Shawbrook is legally answerable. Similarly, the PR hasn’t provided any evidence to show that the Supplier was contractually required to rent out Mr and Mrs J’s allocated weeks or that they had a contractual right to a guaranteed rental income. That’s not to say that the Supplier didn’t have some sort of rental programme – which is what it says in its response to this complaint. It clearly did. For example, I’ve seen a letter it sent Mr and Mrs J on 23 October 2013 (in relation to Membership 1) that says: ‘Dear [Mr and Mrs J] Please accept this letter as confirmation that upon completion of your Agreement we will Rent your week 46 in 2014 at apartment 300 to the sum of €1,000,- therefore we will forwards [sic] you a cheque. …’ My point is simply that I’ve seen insufficient evidence to conclude that there’s been a breach of contract because the Supplier has stopped whatever rental programme it had. Section 140A Section 140A says a court may make an order if it thinks the relationship between a creditor and a debtor is unfair to the debtor. It’s deliberately framed in wide terms, and a finding of unfairness can flow from something done on the creditor’s behalf in connection with a ‘related agreement’. Here, the purchase agreements are ‘related agreements’. And, by virtue of section 56 of the CCA, Shawbrook is legally answerable for the Supplier’s actions. Having considered the entirety of the relationship, I don’t think it was unfair for the purposes of section 140A. In reaching this conclusion, I’ve considered: (1) The information provided by the Supplier at the time of sale, including the contracts and any disclaimers made by the Supplier. (2) All the evidence provided by both parties about what was supposedly said and/or done at the time of sale. (3) The inherent probabilities of what’s likely to have happened given the circumstances of the sale. In February 2024, the PR wrote to Shawbrook on Mr and Mrs J’s behalf to make a claim under section 140A of the CCA. It reiterated that the timeshare memberships were sold as investments, and referred to the recent High Court judgment in R (on the application of Shawbrook Bank Ltd) v Financial Ombudsman Service Ltd [2023] EWHC 1069 (Admin) (‘Shawbrook v Financial Ombudsman Service’), which confirmed that a creditor-debtor relationship could be unfair under section 140A of the CCA if the timeshare membership was sold as an investment.

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The Supplier’s alleged breach of Regulation 14(3) of the Timeshare Regulations I’m satisfied that Memberships 2 and 3 meet the definition of a ‘timeshare contract’ and are ‘regulated contracts’ for the purposes of the Timeshare Regulations. Regulation 14(3) of the Timeshare Regulations says a supplier must not market or sell a proposed timeshare contract as an investment. The term ‘investment’ isn’t defined in the Timeshare Regulations. But I’ll adopt the same definition that was used in Shawbrook v Financial Ombudsman Service, which says it’s a transaction in which money or other property is laid out in the expectation or hope of financial gain or profit. Memberships 2 and 3 clearly included an investment component in that Mr and Mrs J’s share of the proceeds of the deferred sales offered the prospect of a financial return – whether or not, like all investments, that return was more, less or the same as the sum invested. But it’s important to note that the fact that they included an investment component did not, in itself, transgress the prohibition in Regulation 14(3). Regulation 14(3) prohibits the marketing or selling of a timeshare contract as an investment. It doesn’t prohibit the existence of an investment component in a timeshare contract or the marketing and/or selling of such a contract per se. In other words, the Timeshare Regulations didn’t ban products like Memberships 2 and 3 – they simply regulated how they were marketed and sold. To conclude, therefore, that Memberships 2 and 3 were marketed or sold to Mr and Mrs J as an investment in breach of Regulation 14(3), I must be persuaded that it was more likely than not that the Supplier marketed and/or sold membership to them as an investment, i.e. told them or led them to believe that the memberships offered them the prospect of a financial gain (i.e., a profit) given the facts and circumstances of this complaint. There is competing evidence in this complaint as to whether the Memberships 2 and 3 were marketed and/or sold by the Supplier as an investment in breach of Regulation 14(3). On the one hand, it’s clear that the Supplier made efforts to avoid specifically describing the memberships as ‘investments’ or quantifying to prospective members, such as Mr and Mrs J, the financial value of their share in the net sales proceeds of the allocated properties, along with the investment considerations, like the associated risk and reward. On the other hand, I acknowledge that the Supplier’s sales process left open the possibility that the sales representative may have positioned the memberships as an investment. So, I accept that it’s also possible that they were marketed and sold to Mr and Mrs J as an investment in breach of Regulation 14(3). However, whether there was a breach of the relevant prohibition by the Supplier is not ultimately determinative of the outcome for this complaint for reasons I’ll explain, so it’s not necessary for me to make a formal finding on this particular issue. Would the credit relationship between Shawbrook and Mr and Mrs J have been rendered unfair to them had there been a breach of Regulation 14(3) of the Timeshare Regulations? As I think it’s possible the Supplier breached Regulation 14(3) at the times of sale, I now need to decide what impact it might have had on the fairness of the relationship between Mr and Mrs J and Shawbrook. I say this because in Plevin v Paragon Personal Finance Ltd [2014] UKSC 61 (‘Plevin’), the Supreme Court said:

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‘Section 140A […] does not impose any obligation and is not concerned with the question whether the creditor or anyone else is in breach of a duty. It is concerned with the question whether the creditor’s relationship with the debtor was unfair.’ What this means is that a breach of Regulation 14(3) doesn’t automatically mean the credit relationship is unfair for the purposes of section 140A. Such breaches and their consequences (if there are any) must be considered in the round rather than in a narrow or technical way. For me to conclude that a breach of Regulation 14(3) led to an unfair relationship, I need to see sufficient evidence to conclude, on the balance of probabilities, that the prospect of a financial gain was an important and motivating factor for Mr and Mrs J when they decided to purchase Membership 2 and 3. Above, I’ve explained why I couldn’t place sufficient weight on Mr and Mrs J’s testimony to conclude that they were misled. For similar reasons, I’ve don’t think I can give their testimony the weight necessary to conclude that the credit relationships in question were unfair because of a breach of Regulation 14(3). First, it’s very brief. Second, as I’ve explained above, it was written ten years after the events complained about and six years after the PR first complained to Shawbrook. And it was only provided after our investigators rejected the complaint and explained why. By then, the court had handed down its judgment in Shawbrook v Financial Ombudsman Service. Experience tells me that the more time that passes between the events complained about and the consumer writing down their recollections, the greater the risk that those recollections will be vague and inaccurate and potentially influenced by discussions with others and even the complaint process itself. Here, I think there’s a real risk Mr and Mrs J’s testimony was influenced by the PR’s submissions and/or the judgment in Shawbrook v Financial Ombudsman Service. Overall conclusion In conclusion, given the facts and circumstances of this complaint, I don’t think Shawbrook acted unfairly when it didn’t pay Mr and Mrs J’s section 75 claim. And I’m not persuaded that Shawbrook was party to a credit relationship with them under the credit agreements and related purchase agreements that was unfair to them for the purposes of Section 140A of the CCA. And having taken everything into account, I see no other reason why it would be fair to direct Shawbrook to compensate Mr and Mrs J. I asked both parties to provide any further comments or evidence for me to consider by 27 March 2026. Shawbrook says it accepts my provisional decision. The PR hasn’t responded at all. I’m now finalising my decision. The legal and regulatory context When considering what is, in my opinion, fair and reasonable in all the circumstances of the case, I’m required by DISP 3.6.3 R of the Financial Conduct Authority (‘FCA’) Handbook to take into account: ‘(1) relevant: (a) law and regulations;

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(b) regulators’ rules, guidance and standards; (c) codes of practice; and (2) ([when] appropriate) what [I consider] to have been good industry practice at the relevant time.’ The legal and regulatory context that’s relevant to this complaint is, in many ways, no different to that shared in several hundred decisions by ombudsmen on very similar complaints – which can be found on our website. I therefore don’t think it’s necessary to set out that context in detail here. 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. As neither party has provided any further information or evidence, I confirm my provisional findings. My reasons remain the same. My final decision For the reasons given, I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr J and Mrs J to accept or reject my decision before 27 April 2026. Christopher Reeves Ombudsman

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