Clydesdale Financial Services Limited · DRN-6257264

The complaint Miss B’s complaint is, in essence, that Clydesdale Financial Services Limited trading as Barclays Partner Finance (the ‘Lender’) acted unfairly and unreasonably by being party to an unfair credit relationship with her under Section 140A of the Consumer Credit Act 1974 (as amended) (the ‘CCA’). What happened Miss B was the member of a timeshare provider (the ‘Supplier’) – having initially purchased a trial membership, she went on to purchase a membership of a timeshare that I’ll call the ‘Fractional Club’ on 30 September 2015. Miss B later traded that membership in for the Supplier’s premium membership which is at the centre of this complaint. That purchase was made on 14 September 2016 (the ‘Time of Sale’). They entered into an agreement with the Supplier to buy 1,420 fractional points at a cost of £11,718 (the ‘Purchase Agreement’). Fractional Club membership was asset backed – which meant it gave Miss B more than just holiday rights. It also included a share in the net sale proceeds of a property named on the Purchase Agreement (the ‘Allocated Property’) after their membership term ends. Miss B paid for their Fractional Club membership by taking finance of £11,718 from the Lender (the ‘Credit Agreement’). I understand that loan included consolidation of a previous loan for a trail membership with the same Supplier. Miss B – using a professional representative (the ‘PR’) – wrote to the Lender on 15 June 2023 (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 Miss B’s concerns as a complaint and rejected 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. Miss B disagreed with the Investigator’s assessment and asked for an Ombudsman’s decision – which is why it was passed to me. I issued a provisional decision on the case. In summary I said: Having considered the entirety of the credit relationship between Miss B 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;

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2. The provision of information by the Supplier at the Time of Sale, including the contractual documentation and disclaimers made by the Supplier; 3. The commission arrangements between the Lender and the Supplier at the Time of Sale and the disclosure of those arrangements; 4. Evidence provided by both parties on what was likely to have been said and/or done at the Time of Sale; 5. The inherent probabilities of the sale given its circumstances; and, when relevant 6. Any existing unfairness from a related credit agreement. I have then considered the impact of these on the fairness of the credit relationship between Miss B and the Lender. The Supplier’s sales & marketing practices at the Time of Sale Miss B’s complaint about the Lender being party to an unfair credit relationship was and is made for several reasons. The PR says, for instance, that: 1. the right checks weren’t carried out before the Lender lent to Miss B; 2. The Credit Agreement was arranged by a broker acting outside of its authorisation, 3. Miss B was pressured by the Supplier into purchasing Fractional Club membership at the Time of Sale; 4. there was one or more unfair contract terms in the Purchase Agreement; and; 5. Fractional Club membership was marketed and sold as investment in breach of a prohibition on doing so. 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 Miss B was actually unaffordable before also concluding that they lost out as a result and then consider whether the credit relationship with the Lender was unfair to them for this reason. I think it’s clear from the evidence that’s been provided that Miss B has struggled to make repayments in recent years, but it’s not clear why. There’s been little to no information and supporting evidence provided about Miss B’s financial circumstances at the time of the application. So, from the information provided, I am not satisfied that the lending was unaffordable for the Miss B. Connected to this is the suggestion by the PR that the Credit Agreement was arranged by an unauthorised credit broker the upshot of which is to suggest that the Lender wasn’t permitted to enforce the Credit Agreement. However, it looks to me like Miss B knew, amongst other things, how much they were borrowing and repaying each month, who they were borrowing from and that they were borrowing money to pay for Fractional Club membership. And as the lending doesn’t look like it was unaffordable for them, even if the Credit Agreement was arranged by a broker that didn’t have the necessary permission to do so (which I make no formal finding on), I can’t see why that led to Miss B financial loss – such that I can say that the credit relationship in question was unfair on them as a result. And with that being the case, I’m not persuaded that it would be fair or reasonable to tell the Lender to compensate them, even if the loan wasn’t arranged properly. I acknowledge that Miss B may have felt weary after a sales process that went on for a long time. But they say little about what was said and/or done by the Supplier during their sales presentation that made them feel as if they had no choice but to purchase Fractional Club membership when they simply did not want to. They were also given a 14-day cooling off period and they have not provided a credible explanation for why they did not cancel their

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membership during that time. And with all of that being the case, there is insufficient evidence to demonstrate that Miss B made the decision to purchase Fractional Club membership because their ability to exercise that choice was significantly impaired by pressure from the Supplier. The PR also says that there was one or more unfair contract terms in the Purchase Agreement. But as I can’t see that any such terms were operated unfairly against Miss B in practice, nor that any such terms led them to behave in a certain way to their detriment, 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. Overall, therefore, I don’t think that Miss B credit relationship with the Lender was rendered unfair to them under Section 140A for any of the reasons above. But there is another reason, perhaps the main reason, why the PR says the credit relationship with the Lender was unfair to them. And that’s the suggestion that Fractional Club membership was marketed and sold to them as an investment in breach of prohibition against selling timeshares in that way. The Supplier’s alleged breach of Regulation 14(3) of the Timeshare Regulations The Lender does not dispute, and I am satisfied, that Miss B’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. A share in the Allocated Property clearly constituted an investment as it offered Miss B the prospect of a financial return – whether or not, like all investments, that was more than what they first put into it. But it is important to note at this stage that the fact that Fractional Club membership included an investment element did not, itself, transgress the prohibition in Regulation 14(3). That provision prohibits the marketing and selling of a timeshare contract as an investment. It doesn’t prohibit the mere existence of an investment element in a timeshare contract or prohibit the marketing and selling of such a timeshare contract per se. In other words, the Timeshare Regulations did not ban products such as the Fractional Club. They just regulated how such products were marketed and sold. To conclude, therefore, that Fractional Club membership was marketed or sold to Miss B as an investment in breach of Regulation 14(3), I have to be persuaded that it was more likely than not that the Supplier marketed and/or sold membership to them as an investment, i.e. told them or led them to believe that Fractional Club membership offered them the prospect of a financial gain (i.e., a profit) given the facts and circumstances of this complaint.

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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 Miss B, 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 Miss B 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 Miss B 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 Miss B and the Lender that was unfair to them and warranted relief as a result, whether the Supplier’s breach of Regulation 14(3) led them to enter into the Purchase Agreement and the Credit Agreement is an important consideration. But on my reading of the evidence before me, the prospect of a financial gain from Fractional Club membership was not an important and motivating factor when Miss B decided to go ahead with their purchase. I’ll explain why. I think it’s fair to say that the PR’s response to our investigator’s assessment focused on what it considers to be the Supplier’s breach of Regulation 14(3). However, it’s not just for me to determine whether Miss B’s membership was marketed and sold as an investment, but also whether it was material to her decision to purchase. In the Letter of Complaint the PR says: “Our client was expressly told that this product would be a brilliant investment, and that the fractional would be sold for at the end of the term and she would be guaranteed to at least get her money back.”

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In the most part the Letter of Complaint is identical to several others I’ve seen from the same PR. The quote above is specific to this case, but its content is very similar to several others. I’m conscious that it was submitted shortly after the judgment in R (on the application of Shawbrook Bank Ltd) v Financial Ombudsman Service Ltd and R (on the application of Clydesdale Financial Services Ltd (t/a Barclays Partner Finance)) v Financial Ombudsman Service [2023] EWHC 1069 (Admin) (‘Shawbrook & BPF v FOS’) was handed down. From that judgement it could be held that the marketing of a Fractional Club membership as an investment and that having been a motivating factor in the subsequent purchase was a key issue when deciding whether the credit agreement was unfair or not. Given the timing of the complaint as well as its content being so similar to other cases I’ve seen from the same PR, I’m conscious that there’s a real risk that it could’ve been influenced by that judgement. Especially as the letter of complaint makes reference to the determination issued by this service which was subject to that judgement. The PR has provided a signed witness statement from Miss B. It’s dated 14 June 2023. For the reasons I’ve given above, I’ve got similar concerns that Miss B’s recollection could’ve been influenced by the events I’ve spoken of. I’ll explain why. In the statement Miss B says: “As the year before, we were taken for a tour of the development. This time Signature Collection (“SC”) was introduced. The SC was very nice, a lot higher end than the others [Supplier] owned, it was definitely an upgrade in our eyes. At the time, this is what the salesperson said we would be investing in.” I find it unusual that Miss B refers to an upgrade in terms of the quality of accommodation using the word invest. In the context here, I think it’s clear that Miss B doesn’t mean that she was holding out hope of a profit by making the purchase. And it suggests to me that Miss B’s motivation in making the purchase was to gain holiday entitlement and a better standard of accommodation. Miss B goes on to say: “We were shown pictures of the new resort and explained how great it was. The offer [Supplier] had for us was to buy a set week every week in the same property – just like a timeshare. Because SC was so luxurious and glamourous, we had no concerns with upgrading. We were also told that SC was a brilliant investment. We could use it for 25 years and then sell our part back. We were under the impression that [Supplier] would arrange and sort out the selling of the property. I don’t recall any particulars being mentioned (for example how much we would get back/ what would be the profit we would make) but it was guaranteed that we would at least get our money back. Fractional Ownership was the only option presented to us and the concept of a ‘fraction’ wasn’t really explained to us. We were just excited as the fraction was presented as a valuable asset.” Whilst the statement here explicitly says that Miss B expected to make a profit, I find what’s been said problematic and have cause to question its plausibility. I find it difficult to believe that Miss B was told she’d make a profit but didn’t consider the membership was explained to her fully.

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Additionally, Miss B had owned a Fractional Club membership for a year prior to this purchase and her testimony doesn’t make the same allegation about the first purchase. As Miss B has presented events, it reads as though she made the purchase in question as a result of being told she’d make a profit. That doesn’t seem plausible to me because, as I understand it, what Miss B stood to gain by making this purchase was further holiday entitlement and a better standard of accommodation (amongst other benefits). Any investment element operated in broadly the same way as her former membership. Following our investigator’s assessment of the case the PR issued a follow up statement from Miss B on 16 February 2024. It said: “Investment more than anything was the reason that we purchased the Fractional membership. If the investment aspect had been removed, we would not have made the purchase” I’ve seen that identical statement on other cases represented by the PR for different consumers. I’ve also found that Miss B’s original testimony contains statements which also feature in other testimonies. And there are occasions in the testimony where the message conveyed is broadly the same as in other testimonies, but for using different terms. The similarities, however, are sufficient to lead me to believe that Miss B’s recollections might have been influenced, either by the PR or by the outcome of the judgement I’ve referred to above. All of that being the case, given everything I’ve said above, I’m not persuaded that I can give Miss B’s written recollections the weight necessary to finding that the credit relationship in question was unfair for reasons relating to a breach of the relevant prohibition. That doesn’t mean they weren’t interested in a share in the Allocated Property. After all, that wouldn’t be surprising given the nature of the product at the centre of this complaint. But as Miss B themselves don’t persuade me that their purchase was motivated by their share in the Allocated Property and the possibility of a profit, I don’t think a breach of Regulation 14(3) by the Supplier was likely to have been material to the decision they ultimately made. On balance, therefore, even if the Supplier had marketed or sold the Fractional Club membership as an investment in breach of Regulation 14(3) of the Timeshare Regulations, I am not persuaded that Miss B’s decision to purchase Fractional Club membership at the Time of Sale was motivated by the prospect of a financial gain (i.e., a profit). On the contrary, I think the evidence suggests they would have pressed ahead with their purchase whether or not there had been a breach of Regulation 14(3). And for that reason, I do not think the credit relationship between Miss B and the Lender was unfair to them even if the Supplier had breached Regulation 14(3). The provision of information by the Supplier at the Time of Sale The PR says that Miss B was not given sufficient information at the Time of Sale by the Supplier about the ongoing costs of Fractional Club membership. 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 failures 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 Miss B 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 2010

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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 Miss B nor the PR have persuaded me in this particular case that they would not have pressed ahead with their purchase had those details 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 facts and circumstances. As for the PR’s assertion that that if the degree of the various ongoing costs had been expressly made known by the Supplier then “any right-minded individual” would not have entered into the agreement, given what I’ve said above, particularly about the way the ongoing costs of membership were applied, I don’t think such a generalisation can be made in this case. 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; 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

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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 Rule 3.6.4 of the Financial Conduct Authority’s Dispute Resolution Rules (‘DISP’). But I don’t think Hopcraft, Johnson and Wrench assists Miss B 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 that the Lender and Supplier were tied to one another contractually or commercially in a way that wasn’t properly disclosed to Miss B, nor have I seen anything that persuades me that the commission arrangement between them gave the Supplier a choice over the interest rate that led Miss B into a credit agreement that cost disproportionately more than it otherwise could have. I acknowledge that it’s possible that the Lender and the Supplier failed to follow the regulatory guidance in place at the Time 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 is 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 unfair to Miss B. In stark contrast to the facts of Mr Johnson’s case, the amount of commission paid by the Lender to the Supplier for arranging the Credit Agreement that Miss B entered into wasn’t high. At £292.95, it was only 2.5% of the amount borrowed and even less than that (2.32%) 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, Miss B wanted Fractional Club membership 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. 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. And as it wasn’t acting as an agent of Miss B 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.

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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 unfair to Miss B. 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 Miss B and the Lender under the Credit Agreement and related Purchase Agreement 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 Miss B credit relationship with the Lender 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 Miss B 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 Miss B (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 Miss B 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 it and the Supplier, I don’t think any such failure on the Lender’s part is itself a reason to uphold this complaint because, for the reasons I also set out above, I think she would still have taken out the loan to fund their purchase at the Time of Sale had there been more adequate disclosure of the commission arrangements that applied at that time. In conclusion, I was not persuaded that the Lender was party to a credit relationship with Miss B under the Credit Agreement that was unfair to them for the purposes of Section 140A of the CCA – nor did I see any other reason why it would be fair or reasonable to direct the Lender to compensate them. The Lender accepted my PD. The PR also responded – they did not accept the PD and provided some further comments and evidence they wish to be considered. Having received the relevant responses from both parties, I’m now finalising my decision. 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. Following the responses from both parties, I’ve considered the case afresh and having done so, I’ve reached the same decision as that which I outlined in my provisional findings, for broadly the same reasons.

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Again, my role as an Ombudsman isn’t to address every single point which has been made to date, but to decide what is fair and reasonable in the circumstances of this complaint. If I haven’t commented on, or referred to, something that either party has said, this doesn’t mean I haven’t considered it. Rather, I’ve focused here on addressing what I consider to be the key issues in deciding this complaint and explaining the reasons for reaching my final decision. The PR’s further comments in response to the PD in the main relate to the issue of whether the credit relationship between Miss B and the Lender was unfair. In particular, the PR has provided further comments in relation to whether the membership was sold to Miss B as an investment at the Time of Sale. As outlined in my PD, the PR originally raised various other points of complaint, all of which I addressed at that time. But they didn’t make any further comments in relation to those in their response to my PD. Indeed, they haven’t said they disagree with any of my provisional conclusions in relation to those other points. And since I haven’t been provided with anything more in relation to those other points by either party, I see no reason to change my conclusions in relation to them as set out in my PD. So, I’ll focus here on the PR’s points raised in response. 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 As I explained in my PD, although I found there was a possibility that the Supplier breached Regulation 14(3) at the Time of Sale, I wasn’t persuaded that the evidence suggested that Miss B purchased Fractional Club membership in whole or in part down to any breach of Regulation 14(3). In response to my PD the PR has maintained that Miss B’s membership was marketed and sold as an investment and that materially influenced her decision to purchase. It also disagrees with my reasons for doubting the credibility of what Miss B and said requested an “oral examination” if credibility is to play a role in my final decision. As the Supreme Court’s judgment in Plevin makes clear, it does not automatically follow that regulatory breaches create unfairness for the purposes of Section 140A. Such breaches and their consequences (if there are any) must be considered in the round, rather than in a narrow or technical way. I am mindful of what HHJ Waksman QC (as he then was) and HHJ Worster had to say in Carney and Kerrigan (respectively) on causation. In Carney, HHJ Waksman QC said the following in paragraph 51: “[…] In cases of wrong advice and misrepresentation, it would be odd if any relief could be considered if they did not have at least some material impact on the debtor when deciding whether or not to enter the agreement. […] in a case like the one before me, if in fact the debtors would have entered into the agreement in any event, this must surely count against a finding of unfair relationship under s140A. […]” And in Kerrigan, HHJ Worster said this in paragraphs 213 and 214: “[…] The terms of section 140A(1) CCA do not impose a requirement of “causation” in the sense that the debtor must show that a breach caused a loss for an award of substantial

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damages to be made. The focus is on the unfairness of the relationship, and the court's approach to the granting of relief is informed by that, rather than by a demonstration that a particular act caused a particular loss. Section 140A(1) provides only that the court may make an order if it determines that the relationship is unfair to the debtor. […] […] There is a link between (i) the failings of the creditor which lead to the unfairness in the relationship, (ii) the unfairness itself, and (iii) the relief. It is not to be analysed in the sort of linear terms which arise when considering causation proper. The court is to have regard to all the relevant circumstances when determining whether the relationship is unfair, and the same sort of approach applies when considering what relief is required to remedy that unfairness. […]” So, it seems to me that, if I am to conclude that a breach of Regulation 14(3) led to a credit relationship between Miss B and the Lender that was unfair to them and warranted relief as a result, whether the Supplier’s breach of Regulation 14(3) which, having taken place during its antecedent negotiations with Miss B is covered by Section 56 of the CCA, falls within the notion of "any other thing done (or not done) by, or on behalf of, the creditor" for the purposes of 140(1)(c) of the CCA and deemed to be something done by the Lender) lead them to enter into the Purchase Agreement and the Credit Agreement is an important consideration. As I explained in my PD, I haven’t found Miss B’s account of the sale of the membership in question particularly compelling insofar as her motivation for the purchase being investment. I accept that she uses the word invest at the outset, but it’s in reference to purchasing a membership with a higher standard of accommodation. Not necessarily what one might refer to as an investment, and not an indication that her motivation had been with making a profit in mind. In response to my PD the PR said: “Holiday rights did not materially change between her earlier membership and the Signature upgrade. The financial element was the distinguishing feature.” I disagree, Miss B purchased an additional 500 or so points of holiday entitlement. I also disagree that the distinguishing feature between Miss B’s existing membership and the one in question was a financial element. Miss B makes several references to one of the differences being the standard of accommodation. For example, she says: “The SC was very nice, a lot higher end than the others [Supplier] owned, it was definitely an upgrade in our eyes.” I also understand that in making the purchase Miss B gained various other benefits and savings over her former membership. All of these things could’ve been a motivating factor for Miss B having made the purchase. I’d be surprised if they weren’t, given what she’s said. That doesn’t mean that any investment element could not have been a motivating factor for Miss B in making the purchase. But I’m still not persuaded it was. As I did in my PD, I still find Miss B’s account conflicts in the sense that she says she didn’t think that membership was fully explained to her, but she also says that she was guaranteed that she’d make a profit from membership. Particularly because this was not Miss B’s first purchase of Fractional Club membership. I think that my PD clearly set out why I didn’t find Miss B’s testimony persuasive insofar as investment having been an important and motivating factor for her in this purchase. What’s been said in response has not caused me to change my mind on that.

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So, with reference to Miss B’s original testimony, I still don’t that I can give Miss B’s written recollections the weight necessary to finding that the credit relationship in question was unfair for reasons relating to a breach of the relevant prohibition. The follow up statement supplied by the PR in February 2024 clearly does articulate that investment had been a motivating factor for Miss B. But it’s mostly identical to several other statements submitted by the PR on other cases, around that time. I therefore have put little weight on it. And even if I set aside my concern about it being almost identical to others, I’m still not persuaded by Miss B’s original testimony, as I’ve explained above. Regarding the PR’s suggestion of an “oral examination”, I don’t think that’s necessary here. This Service was set up to decide complaints informally and it is for me to determine what evidence I need to decide what a fair and reasonable outcome to a complaint is. Having considered everything, I do not think I need to hold an oral hearing to fairly determine this complaint. I’m satisfied I’ve been able to weigh up what Miss B said against the available evidence and arguments to determine what I think happened on the balance of probabilities without the need for an oral hearing. My PD is clear about why I didn’t find Miss B’s original testimony compelling, and why I had concerns about the credibility of the later statement provided by the PR. My PD provided an opportunity for Miss B to clarify matters, but what’s been said in response hasn’t led me to doubt what I said in my PD. Overall, and as I said before, even if the Supplier had marketed or sold the membership as an investment in breach of Regulation 14(3) (which I still make no finding on here), I’m not persuaded Miss B’s decision to make the purchase was motivated by the prospect of a financial gain – whether solely or in part. So, I still don’t think the credit relationship between Miss B and the Lender was unfair to her for this reason. My final decision For the reasons explained above, my final decision is that I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Miss B to accept or reject my decision before 24 April 2026. Stephen Trapp Ombudsman

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