Shawbrook Bank Limited · DRN-6214011

The complaint Mr and Mrs H’s complaint is, in essence, that Shawbrook Bank Limited (the ‘Lender’) acted unfairly and unreasonably by being party to an unfair credit relationship with them under Section 140A of the Consumer Credit Act 1974 (as amended) (the ‘CCA’). Background to the Complaint Mr and Mrs H purchased membership of a timeshare (the ‘Fractional Club’) from a timeshare provider (the ‘Supplier’) on 5 March 2015 (the ‘Time of Sale’). Prior to that, they accumulated 14,000 points in the Supplier’s “European Collection” which were purchased across different sales between 1992 and 2012. These points could be exchanged for stays in holiday accommodation across the Supplier’s portfolio of resorts, amongst other things, and the number of points needed would depend on the time of year, location, size of accommodation, and length of stay. At the Time of Sale, Mr and Mrs H entered into an agreement (the ‘Purchase Agreement’) to buy 15,000 ‘fractional points’, trading in their 14,000 European Collection points. Mr and Mrs H gained a further 1,000 points. This was at a total cost of £10,660, with a conversion price given for the European Collection points of £1 per point. This enrolled Mr and Mrs H into Fractional Owners Club membership. Fractional Club membership was asset backed – which meant it gave Mr and Mrs H more than just holiday rights. It also included a share in the net sale proceeds of a property named on their Purchase Agreement (the ‘Allocated Property’) after their membership term ends. Mr and Mrs H paid for their Fractional Club membership by taking finance of £10,660 from the Lender (the ‘Credit Agreement’). Mr and Mrs H – using a professional representative (the ‘PR’) – wrote to the Lender on 30 August 2018 (the ‘Letter of Complaint’) to complain about the Lender being party to an unfair credit relationship under the Credit Agreement and related Purchase Agreement for the purposes of Section 140A of the CCA. The Letter of Complaint set out several reasons why Mr and Mrs H say that the credit relationship between them and the Lender was unfair to them under Section 140A of the CCA. Mr and Mrs H, using the PR, also wrote a letter of complaint to the Supplier on the same date. And they have provided testimony on a document titled “Witness Statement” which is dated 14 March 2018. In summary, the reasons they have given for the complaint include the following: • Fractional Club membership was marketed and sold to them as an investment in breach of Regulation 14(3) of the Timeshare, Holiday Products, Resale and Exchange Contracts Regulations 2010 (the ‘Timeshare Regulations’). • They were pressured into purchasing Fractional Club membership by the Supplier. • The Supplier’s sales presentation at the Time of Sale included misleading actions and/or misleading omissions under the Consumer Protection from Unfair Trading Regulations 2008 (the ‘CPUT Regulations’) as well as a prohibited practice under Schedule 1 of those Regulations.

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• The Supplier received commission from the Lender, and this was not disclosed to them. • The decision to lend was irresponsible because the Lender didn’t carry out the right creditworthiness assessment. • The Supplier misrepresented the Fractional Club membership for the following reasons: a. There would be “excellent” availability of holidays, but they have faced difficulty in booking their desired holidays. b. They were advised the product would be “exclusive”, but non-members could also use the resorts. c. The Fractional Club membership would offer them a “guaranteed exit” from timeshare ownership, but this was untrue. d. The additional points meant they would access the next tier of membership and would receive extra benefits, but these did not come to fruition. The Lender dealt with Mr and Mrs H’s concerns as a complaint and issued its final response letter on 29 October 2018, rejecting it on every ground. Mr and Mrs H then referred the complaint to the Financial Ombudsman Service. It was assessed by an Investigator who, having considered the information on file, upheld the complaint on its merits. The Investigator thought that the Supplier had marketed and sold Fractional Club membership as an investment to Mr and Mrs H at the Time of Sale in breach of Regulation 14(3) of the Timeshare Regulations. And given the impact of that breach on their purchasing decision, the Investigator concluded that the credit relationship between the Lender and Mr and Mrs H was rendered unfair to them for the purposes of section 140A of the CCA. The Lender disagreed with the Investigator’s assessment and asked for an Ombudsman’s decision – which is why it was passed to me. On 13 March 2025, I issued a provisional decision (the ‘PD’) on this complaint. I set out that I thought the Supplier had sold and/or marketed the Fractional Club membership to Mr and Mrs H as an investment in breach of the prohibition in Regulation 14(3) of the Timeshare Regulations. And I thought that breach rendered the credit relationship between them and the Lender unfair for the purposes of Section 140A of the CCA. 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 currently think that this complaint should be upheld because the Supplier breached Regulation 14(3) of the Timeshare Regulations by marketing and/or selling Fractional Club membership to Mr and Mrs H as an investment, which, in the circumstances of this complaint, rendered the credit relationship between them and the Lender unfair to them for the purposes of Section 140A of the CCA. 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, while I recognise that there are a number of aspects to Mr and Mrs H’s complaint, it isn’t necessary to make formal findings on all of them. This includes the allegation that the decision to lend was irresponsible.

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What is more, I have made my decision on the balance of probabilities – which means I have based it on what I think is more likely than not to have happened given the available evidence and the wider circumstances. Section 140A of the CCA: did the Lender participate in an unfair credit relationship? As Section 140A of the CCA is relevant law, I do have to consider it. So, in determining what is fair and reasonable in all the circumstances of the case, I will consider whether the credit relationship between Mr and Mrs H and the Lender was unfair. Under Section 140A of the CCA, a debtor-creditor relationship can be found to have been or be unfair to the debtor because of one or more of the following: the terms of the credit agreement itself; how the creditor exercised or enforced its rights under the agreement; and any other thing done (or not done) by, or on behalf of, the creditor (either before or after the making of the agreement or any related agreement) (s.140A(1) CCA). Such a finding may also be based on the terms of any related agreement (which here, includes the Purchase Agreement) and, when combined with Section 56 of the CCA, on anything done or not done by the supplier on the creditor’s behalf before the making of the credit agreement or any related agreement. Section 56 plays an important role in the CCA because it defines the terms “antecedent negotiations” and “negotiator”. As a result, it provides a foundation for a number of provisions that follow it. But it also creates a statutory agency in particular circumstances. And while Section 56(1) sets out three of them, the most relevant to this complaint are negotiations conducted by the supplier in relation to a transaction financed or proposed to be financed by a debtor-creditor-supplier agreement. A debtor-creditor-supplier agreement is defined by Section 12(b) of the CCA as “a restricted- use credit agreement which falls within section 11(1)(b) and is made by the creditor under pre-existing arrangements, or in contemplation of future arrangements, between himself and the supplier […]”. And Section 11(1)(b) of the CCA says that a restricted-use credit agreement is a regulated credit agreement used to “finance a transaction between the debtor and a person (the ‘supplier’) other than the creditor […] and “restricted-use credit” shall be construed accordingly.” The Lender doesn’t dispute that there was a pre-existing arrangement between it and the Supplier. So, the negotiations conducted by the Supplier during the sale of Mr and Mrs H’s membership of the Fractional Club were conducted in relation to a transaction financed or proposed to be financed by a debtor-creditor-supplier agreement as defined by Section 12(b). That made them antecedent negotiations under Section 56(1)(c) – which, in turn, meant that they were conducted by the Supplier as an agent for the Lender as per Section 56(2). And such antecedent negotiations were “any other thing done (or not done) by, or on behalf of, the creditor” under s.140(1)(c) CCA. Antecedent negotiations under Section 56 cover both the acts and omissions of the Supplier, as Lord Sumption made clear in Plevin, at paragraph 31: “[Section] 56 provides that [when] antecedent negotiations for a debtor-creditor-supplier agreement are conducted by a credit-broker or the supplier, the negotiations are “deemed to be conducted by the negotiator in the capacity of agent of the creditor as well as in his actual capacity”. The result is that the debtor’s statutory rights of withdrawal from prospective agreements, cancellation and rescission may arise on account of the conduct of the negotiator whether or not he was the creditor’s agent.’ […] Sections 56 and 140A(3) provide for a deemed agency, even in a case where there is no actual one. […] These provisions are

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there because without them the creditor’s responsibility would be engaged only by its own acts or omissions or those of its agents.” And this was recognised by Mrs Justice Collins Rice in Shawbrook & BPF v FOS at paragraph 135: “By virtue of the deemed agency provision of s.56, therefore, acts or omissions ‘by or on behalf of’ the bank within s.140A(1)(c) may include acts or omissions of the timeshare company in ‘antecedent negotiations’ with the consumer”. In the case of Scotland & Reast, the Court of Appeal said, at paragraph 56, that the effect of Section 56(2) of the CCA meant that “negotiations are deemed to have been conducted by the negotiator as agent for the creditor, and that is so irrespective of what the position would have been at common law” before going on to say the following in paragraph 74: “[...] there is nothing in the wording of s.56(2) to suggest any legislative intent to limit its application so as to exclude s.140A. Moreover, the words in s.140A(1)(c) "any other thing done (or not done) by, or on behalf of, the creditor" are entirely apposite to include antecedent negotiations falling within the scope of s.56(1)(c) and which are deemed by s.56(2) to have been conducted by the supplier as agent of the creditor. Indeed the purpose of s.56(2) is to render the creditor responsible for such statements made by the negotiator and so it seems to me wholly consistent with the scheme of the Act that, where appropriate, they should be taken into account in assessing whether the relationship between the creditor and the debtor is unfair.”1 So, the Supplier is deemed to be Lender’s statutory agent for the purpose of the pre- contractual negotiations. However, an assessment of unfairness under Section 140A isn’t limited to what happened immediately before or at the time a credit agreement and related agreement were entered into. The High Court held in Patel (which was recently approved by the Supreme Court in the case of Smith), that determining whether or not the relationship complained of was unfair had to be made “having regard to the entirety of the relationship and all potentially relevant matters up to the time of making the determination” – which was the date of the trial in the case of an existing credit relationship or otherwise the date the credit relationship ended. The breadth of the unfair relationship test under Section 140A, therefore, is stark. But it isn’t a right afforded to a debtor simply because of a breach of a legal or equitable duty. As the Supreme Court said in Plevin (at paragraph 17): “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 […] whether the creditor’s relationship with the debtor was unfair.” Instead, it was said by the Supreme Court in Plevin that the protection afforded to debtors by Section 140A is the consequence of all of the relevant facts. I have considered the entirety of the credit relationship between Mr and Mrs H and the Lender along with all of the circumstances of the complaint and I 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 Court of Appeal’s decision in Scotland was recently followed in Smith.

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1. The Supplier’s sales and marketing practices at the Time of Sale – which includes training material that I think is likely to be relevant to the sale; and 2. The provision of information by the Supplier at the Time of Sale, including the contractual documentation and disclaimers made by the Supplier; 3. Evidence provided by both parties on what was likely to have been said and/or done at the Time of Sale; 4. The inherent probabilities of the sale given its circumstances. I have then considered the impact of these on the fairness of the credit relationship between Mr and Mrs H and the Lender. The Supplier’s breach of Regulation 14(3) of the Timeshare Regulations The Lender does not dispute, and I am satisfied, that Mr and Mrs H’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 Mr and Mrs H say that the Supplier did exactly that at the Time of Sale – saying the following in their testimony dated 14 March 2018: “The representative, I'm sure, kept saying things like reassuring us that property prices would rise and that they said that we would definitely get back the money that we put in. They did keep using the term "investment" throughout, and they also implied that we would make a profit.” And: “They sold this as a way to make money i.e. that we could take the surplus points that we had at the end of the year and put it back into the company and that the company would then pay us for the points. They told us that we would get 1p per point.” Mr and Mrs H allege, therefore, that the Supplier breached Regulation 14(3) at the Time of Sale because: (1) they were told by the Supplier that they would get their money back or more during the course of owning the Fractional Club membership. (2) they were told by the Supplier that Fractional Club membership was the type of investment that would only increase in value. I note that, while this allegation is made in both Mr and Mrs H’s testimony and the PR’s letter to the Supplier, the PR did not repeat this allegation in the Letter of Complaint to the Lender. The Lender pointed this out in response to the Investigator’s view and says it believes that Mr and Mrs H’s testimony was created recently as they were not making this allegation at the time they first made their complaint. But our service has held a copy of the testimony since the complaint was first submitted to us – and the allegation was repeated in the letter sent to the Supplier – so it is mistaken when it says this. It is also notable that the allegation was covered in the Lender’s own final response letter. So, I have considered this allegation as part of Mr and Mrs H’s complaint as I think this is something they think went wrong at the

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Time of Sale. The term “investment” is not defined in the Timeshare Regulations. In Shawbrook & BPF v FOS, the parties agreed that, 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” at [56]. I will use the same definition. Mr and Mrs H’s share in the Allocated Property clearly, in my view, constituted an investment as it offered them the prospect of a financial return – whether or not, like all investments, that was more than what they first put into it. But 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 Mr and Mrs H 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. There is evidence in this complaint that the Supplier made efforts to avoid specifically describing membership of the Fractional Club as an ‘investment’ or quantifying to prospective purchasers, such as Mr and Mrs H, 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. There were, for instance, disclaimers in the contemporaneous paperwork that state that Fractional Club membership was not sold to Mr and Mrs H as an investment. For example, the Lender points to the terms and conditions of the Purchase Agreement, which say: “You should not purchase Your [Supplier] Fractional Points as an investment in real estate. The Purchase Price paid by You relates primarily to the provision of memorable holidays for the duration of Your ownership”. And the Supplier’s document titled “Customer Compliance Statement/Declaration to Treating Customers Fairly”, which I have seen, reads: “5. We understand that the purchase of our [Supplier] Fractional Points is an investment in our future holidays and that it should not be regarded as a property or financial investment. We recognize that the sale price achieved on the sale of the Property in the Owners Club (and to which our [Supplier] Fractional Points have been attributed) will depend on market conditions at that time, that property prices can go down as well as up and that there is no guarantee as to the eventual sale price of the Property.”

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To me, this statement does not sufficiently distance the Supplier from the allegation that the Fractional Club membership was sold as an investment, as it uses wording that I would expect to see in a disclaimer on an investment product. And I think it is notable that the Supplier described the membership using the phrase “investment in our future holidays”, which in my mind does nothing to dissuade a prospective customer from the notion that the membership was an investment. However, weighing up what happened in practice is, in my view, rarely as simple as looking at the contemporaneous paperwork. And there are a number of strands to Mr and Mrs H’s allegation that the Supplier breached Regulation 14(3) at the Time of Sale, including (1) that membership of the Fractional Club was expressly described as an “investment” in several different contexts and (2) that membership of the Fractional Club could make them a financial gain and/or would retain or increase in value. So, I have considered: (1) whether it is more likely than not that the Supplier, at the Time of Sale, sold or marketed membership of the Fractional Club as an investment, i.e. told Mr and Mrs H or led them to believe during the marketing and/or sales process that membership of the Fractional Club was an investment and/or offered them the prospect of a financial gain (i.e., a profit); and, in turn, (2) whether the Supplier’s actions constitute a breach of Regulation 14(3). And for reasons I’ll now come on to, given the facts and circumstances of this complaint, I think the answer to both of these questions is ‘yes’. How the Supplier marketed and sold the Fractional Club membership I have considered what both parties have told us about the sale of the Fractional Club membership. During the course of its dealing with complaints of a similar nature, this Service has been sent some documents relating to the sale of fractional memberships by the Supplier. These include internal documents, training materials, statements from both former and (at that time) current employees of the Supplier setting out how its sales staff were trained to sell all its products, and how Fractional Membership in particular was sold to both new and existing members – all of which I have considered. When the Government consulted on the implementation of the Timeshare Regulations, it discussed what marketing or selling a timeshare as an investment might look like – saying that ‘[a] trader must not market or sell a timeshare or [long-term] holiday product as an investment. For example, there should not be any inference that the cost of the contract would be recoupable at a profit in the future (see regulation 14(3)).” 2 And in my view that must have been correct because it would defeat the consumer-protection purpose of Regulation 14(3) if the concepts of marketing and selling a timeshare as an investment were interpreted too restrictively. So, if a supplier implied to consumers that future financial returns (in the sense of possible profits) from a timeshare were a good reason to purchase it, I think its conduct was likely to have fallen foul of the prohibition against marketing or selling the product as an investment. 2 The Department for Business Innovation & Skills “Consultation on Implementation of EU Directive 2008/122/EC on Timeshare, Long-Term Holiday Products, Resale and Exchange Contracts (July 2010)”. https://assets.publishing.service.gov.uk/media/5a78d54ded915d0422065b2a/10-500-consultation- directive-timeshare-holiday.pdf

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For, if I’m wrong about that, I find it difficult to explain why, in paragraphs 77 and 78 followed by 100 of Shawbrook & BPF v FOS, Mrs Justice Collins Rice said the following: “[…] I endorse the observation made by Mr Jaffey KC, Counsel for BPF, that, whatever the position in principle, it is apparently a major challenge in practice for timeshare companies to market fractional ownership timeshares consistently with Reg.14(3). […] Getting the governance principles and paperwork right may not be quite enough. The problem comes back to the difficulty in articulating the intrinsic benefit of fractional ownership over any other timeshare from an individual consumer perspective. […] If it is not a prospect of getting more back from the ultimate proceeds of sale than the fractional ownership cost in the first place, what exactly is the benefit? […] What the interim use or value to a consumer is of a prospective share in the proceeds of a postponed sale of a property owned by a timeshare company – one they have no right to stay in meanwhile – is persistently elusive.” “[...] although the point is more latent in the first decision than in the second, it is clear that both ombudsmen viewed fractional ownership timeshares – simply by virtue of the interest they confer in the sale proceeds of real property unattached to any right to stay in it, and the prospect they undoubtedly hold out of at least 'something back' – as products which are inherently dangerous for consumers. It is a concern that, however scrupulously a fractional ownership timeshare is marketed otherwise, its offer of a 'bonus' property right and a 'return' of (if not on) cash at the end of a moderate term of years may well taste and feel like an investment to consumers who are putting money, loyalty, hope and desire into their purchase anyway. Any timeshare contract is a promise, or at the very least a prospect, of long-term delight. [...] A timeshare-plus contract suggests a prospect of happiness-plus. And a timeshare plus 'property rights' and 'money back' suggests adding the gold of solidity and lasting value to the silver of transient holiday joy.” (Emphasis my own.) So, I’m not persuaded that the prohibition in Regulation 14(3) was confined to, for example, using the word ‘investment’ when promoting or selling a timeshare contract. I think that the prohibition may capture the promotion of investment features incorporated into a timeshare to persuade consumers to purchase, including leading a consumer to expect a financial gain from the timeshare. After all, Mrs Justice Collins Rice said in Shawbrook & BPF v FOS, at 76 (when discussing an ombudsman’s approach to Regulation 14(3)): “[…] He was entitled in other words to be highly sensitive to the overt and covert messaging – that is, the fine calibration of the encouragement given – by the seller in a case like this. There was nothing wrong with an approach which had the absolute prohibition in Reg.14(3) within the ombudsman's field of vision from the outset as he looked at the evidence for the true nature of the transaction that was done here. Indeed he was required as a matter of law to do so.” (Emphasis my own). Mr and Mrs H have not suggested in their testimony that they were given any details of the amount of profit they could expect to make from the sale of the Allocated Property, or the likelihood of achieving this. Rather, they say that they were simply told that what they bought would increase in value and would be sold. But if I were to only concern myself with express efforts to quantify to Mr and Mrs H the financial value of the proprietary interest they were offered, I think that would involve taking too narrow a view of the prohibition against marketing and selling timeshares as an investment in Regulation 14(3). So, I have considered the inherent probability of the allegation when assessing whether I find that thing did or did not happen. The Supplier has provided a document titled “Frequently Asked Questions”. Under the heading “How do my Fractional Points work?”, it is said that:

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“The Fractional Points you acquire may be used by you in the same way as European Collection points and carry all the existing benefits of membership”. … “You will also receive access to all THE Club® benefits including membership benefits and loyalty tiers”. So, the Fractional Club points worked in the same way that the European Collection points worked. Because of this, the inference I have drawn from the documentary evidence is that it is inherently more probable that a Fractional timeshare product with an investment element is sold in a way promoting that element, and therefore risking a breach of Regulation 14(3), compared with the sale of a product without the possibility of a monetary return3. The Lender has said that the Supplier included specific disclaimers to show that it didn’t present Fractional Club Ownership as an investment – as I’ve explained above. But it’s ultimately difficult to explain why it was necessary to include such disclaimers if there wasn’t a very real risk of the Supplier marketing and selling membership as an investment. And there is a particular difficulty for the Supplier to articulate the benefit of fractional ownership in a way that distinguishes it from other timeshares from the viewpoint of prospective members, especially as Mr and Mrs H had already held non-fractional timeshare memberships for over 20 years and had increased their holiday rights by buying further non- fractional points on a number of occasions. So, I think it’s reasonable to assume there was likely some discussion at the Time of Sale as to why they should purchase this new type of membership, that was centred around the specific benefit of becoming Fractional Club members. When I consider Mr and Mrs H’s evidence on the whole, in combination with the documentary evidence I’ve seen from the Supplier and the overall circumstances of what happened, I don’t find it implausible or hard to believe Mr and Mrs H when they say that fractional membership was sold to them as a way to make money. On the contrary, given what I’ve seen so far, I think that is likely to be what they were led to believe by the Supplier at the Time of Sale. And for these reasons, I think the Supplier breached Regulation 14(3) of the Timeshare Regulations. Was the credit relationship between the Lender and the Consumer rendered unfair? Having found 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 Mr and Mrs H and the Lender under the Credit Agreement and related Purchase Agreement. 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 also 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: 3 This is different to saying that it is more likely than not that a product with an investment element is sold as an investment, simply due to that investment element. For the avoidance of doubt, I make no such finding.

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“[…] In cases of wrong advice and misrepresentation, it would be odd if any relief could be considered if they did not have at least some material impact on the debtor when deciding whether or not to enter the agreement. […] in a case like the one before me, if in fact the debtors would have entered into the agreement in any event, this must surely count against a finding of unfair relationship under s140A. […]” And in Kerrigan, HHJ Worster said this in paragraphs 213 and 214: “[…] The terms of section 140A(1) CCA do not impose a requirement of “causation” in the sense that the debtor must show that a breach caused a loss for an award of substantial damages to be made. The focus is on the unfairness of the relationship, and the court's approach to the granting of relief is informed by that, rather than by a demonstration that a particular act caused a particular loss. Section 140A(1) provides only that the court may make an order if it determines that the relationship is unfair to the debtor. […] […] There is a link between (i) the failings of the creditor which lead to the unfairness in the relationship, (ii) the unfairness itself, and (iii) the relief. It is not to be analysed in the sort of linear terms which arise when considering causation proper. The court is to have regard to all the relevant circumstances when determining whether the relationship is unfair, and the 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 Mr and Mrs H 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 them, 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. On my reading of Mr and Mrs H’s testimony, the prospect of a financial gain from Fractional Club membership was an important and motivating factor when they decided to go ahead with their purchase. That doesn’t mean they were not interested in holidays. The evidence shows that they quite clearly were. And that is not surprising given the nature of the product at the centre of this complaint. But buying more holiday rights does not seem to have been a significant factor in their decision to enter the Fractional Club. I say this as they only gained an extra 1,000 points on top of their existing allocation of 14,000 points. They did not use these extra points in the year they took out the membership, though I acknowledge the Supplier says they did use their full allocation of points in 2016 and 2017. But they have paid an extra £10,660 to enter this agreement, which works out at over £10 per point, when their points “converted” from the European Collection were only given a value of £1 by the Supplier. Further, I am unsure why they would not simply have increased their European Collection points again in the same way they had done several times before if they had only wished to increase their holiday rights. This suggests there had to be some other reason they purchased the Fractional Club membership, in addition to the holiday rights. In their testimony, Mr and Mrs H give two further reasons for entering into the agreement. I have thought about whether either or both of these reasons were a significant part of their motivation to become Fractional Club members. Firstly, Mr and Mrs H say they were told the Fractional Club membership was sold as a way to shorten their liability as it offered a guaranteed exit at the end of the term. This was important to them as they did not want their family to become liable for any ongoing costs associated with their membership. The Supplier did not comment on this point in its

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response, but I have considered a witness statement it provided to our service on another complaint. The statement was given by an in-house solicitor employed by the Supplier at the time. She says: “Since 1999, European Collection members have been able to surrender their points under exceptional circumstances (75 years of age or over, death of the joint Member or medical or financial difficulty impacting upon their ability to use their membership). In February 2015, European Collection members were also offered a non- qualified right to relinquish their points (in the event that none of the exceptional circumstances applied to them)." I am aware that the Supplier had an “exceptional circumstances” policy whereby customers could exit the membership for free once one of Mr or Mrs H reached 75 years of age4. At the Time of Sale, Mr H was 72 years old, and Mrs H was 70 years old. This means that they could have exercised their right under the European Collection membership to exit within three years of the Time of Sale, at no cost to them. And the Supplier says that it would have allowed existing customers like Mr and Mrs H the non-qualified option to exit their European Collection membership about one month before the Time of Sale. So, I don’t think that Mr and Mrs H would have been persuaded by the Supplier to enter the Fractional Club membership for the purpose of exiting their European Collection membership, as I think the Supplier would have most likely informed them that they could relinquish this for free, or simply waited three more years to use the “exceptional circumstances” policy. In their testimony, Mr and Mrs H say: “They told us that we should buy another 1,000 points because it would essentially take us to the next level. They told us that they work on a tier system and that if we wanted access to extras, we would have to get up to the next tier and that that way to do that, would be to buy another 1,000 points. The special benefits they told us about would be premium booking times, that we could book further in advance than other members, that we would get a better standard of accommodation than other members…” The Supplier says that Mr and Mrs H gained “Silver” tier membership upon entering the agreement. It says members would receive various benefits, and that this included access to the “pending request” system, which entitled customers like Mr and Mrs H to register their interest in securing a specific booking in the event that there was no availability at the time of placing the request. It then says: “We would however make it clear that all Fractional Owners and members of [the European Collection], irrespective of their points holding, have access to the same accommodation and the same portfolio of resorts – it is only ancillary benefits which vary depending on their points holding”. So, by gaining “Silver” tier membership, Mr and Mrs H may have been given another option to secure holidays, amongst other things. I’m persuaded that gaining this tier of membership was of at least some importance to them, as their testimony suggests it was. But I think it is very unlikely that they would have parted with a significant amount of money for the sole purpose of having access to what the Supplier has described as “ancillary” benefits, and what they described as “extras”, if there was not another much more important reason for doing so. Indeed, as the Supplier’s own records don’t show that Mr and Mrs H were experiencing difficulty securing reservations at its resorts, I’m not convinced that these benefits were especially desirable for them. 4 Set out in the European Collection Relinquishment Fact Sheet

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Mr and Mrs H say (plausibly in my view) that Fractional Club membership was marketed and sold to them at the Time of Sale as something that offered them more than just holiday rights. So, on the balance of probabilities, I think their purchase was motivated by their share in the Allocated Property and the possibility of a profit as that share was one of the defining features of membership that marked it apart from their existing membership. And with that being the case, I think the Supplier’s breach of Regulation 14(3) was material to the decision they ultimately made. Mr and Mrs H have not said or suggested, for example, that they would have pressed ahead with the purchase in question had the Supplier not led them to believe that Fractional Club membership was an appealing investment opportunity. And as they faced the prospect of borrowing and repaying a substantial sum of money while subjecting themselves to long- term financial commitments, had they not been encouraged by the prospect of a financial gain from membership of the Fractional Club, I’m not persuaded that they would have pressed ahead with their purchase regardless. Conclusion Given the facts and circumstances of this complaint, I think the Lender participated in and perpetuated an unfair credit relationship with Mr and Mrs H under the Credit Agreement and related Purchase Agreement for the purposes of Section 140A. And with that being the case, taking everything into account, I think it is fair and reasonable that I uphold this complaint. I then set out what I considered to be a fair and reasonable way for the Lender to calculate the compensation I thought the Lender should pay to Mr and Mrs H. The responses to my PD Mr and Mrs H accepted the findings in the PD and confirmed that they didn’t want their previous timeshare to be reinstated. The Lender provided a lengthy response, disagreeing with my findings. It also provided a response from the Supplier. The Lender said, in summary, that: a) the PD was premised on a material error of law in its approach to the prohibition under Regulation 14(3) of the Timeshare Regulations. And it erred in its application of that prohibition to the underlying documentation in support of the Fractional Club sale. b) The above errors, in turn, undermined my approach to the witness testimony supporting Mr and Mrs H’s complaint. c) The PD is premised on a material error of law in its approach to the legal test to determine the existence of an unfair relationship. The Lender then explained in more detail on why it thought the PD erred in its approaches above. In summary, it said: • There was nothing inherent in the Fractional Club that contravenes the prohibition in Regulation 14(3). • The wording of the PD is inconsistent with the definition of an “investment” as set out in Shawbrook & BPF v FOS.

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• The PD conflates two different meanings of the word ‘return’ and that by being told that some money would be returned, this merely describes an inherent feature of the Fractional Club and does not automatically breach Regulation 14(3). • It was an error to conclude that it’s appropriate to make inferences about the conduct of the sale based on generic assumptions about the Fractional Club. • The documentation provided by the Supplier to Mr and Mrs H at the Time of Sale makes it clear that the Fractional Club did not constitute an investment in real estate. • It is irrational to interpret the disclaimer that the Fractional Club was an “investment in holidays” as meaning anything other than that an initial outlay for the primary purpose of holiday rights and there is no connotation of financial gain or profit. • The PD discounts the extensive submissions made by the Lender and the Supplier and makes assumptions about how the Fractional Club was sold to Mr and Mrs H. • I’m not entitled to rely on the generic features of fractional products and conclude that Mr and Mrs H were sold the specific product as an investment. • To explain that there is a specific Allocated Property and that there will be monies returned at the end of the product term is merely describing the Fractional Club accurately and to do otherwise would likely infringe other parts of the Timeshare Regulations. • Selling as an investment requires both the representation by the Supplier that a significant reason to enter an agreement was the prospect of making a financial gain, together with a corresponding motive on the part of the customer, but that is not satisfied by simply referring to the return of monies. The Lender continued by commenting further on the Fractional Club documentation: • The documentation in relation to the sale is, on its face, unobjectionable and shows no breach of Regulation 14(3). • There were disclaimers that emphasised that the Fractional Club should not be seen as an investment and Mr and Mrs H signed these to confirm they understood this. • There is no evidence that the sale of the Fractional Club involved marketing or selling it as an investment to Mr and Mrs H. • Witness evidence from the Supplier on other similar cases indicated that the Supplier delivered extensive training to its staff to ensure that its products were not marketed and sold as investments. • I ought to have given some with to the decision of HHJ Beech in Gallagher v Diamond Resorts (Europe) Limited (County Court, 24 September 2021) in which it was held that the court was satisfied that the Supplier’s sales staff in that case were trained as described. The Lender then turns to the witness testimony provided by Mr and Mrs H. It says: • The PD does not sufficiently the veracity of Mr and Mrs H’s testimony, meaning it is given undue weight. • There was no allegation that the Fractional Club was sold to Mr and Mrs H as an investment in the Letter of Complaint and the allegation in the letter to the Supplier is generic and doesn’t reflect how the same argument is articulated in the testimony. • It was irrational of me to conclude that Mr and Mrs H’s testimony is more reliable than the testimony provided by the Supplier’s staff, given their detailed knowledge of the product design, features and training materials. • It is unsafe to rely on Mr and Mrs H’s testimony. • I haven’t attached sufficient weight to the other reasons Mr and Mrs H chose to purchase the Fractional Club membership. • I have misunderstood Mr and Mrs H’s objectives and viewed these through the narrow lens of whether the membership was ‘value for money’.

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The Lender then provides its position on other potential benefits Mr and Mrs H received through their purchase. It says: • It agrees that increased holiday rights were a material motivation for Mr and Mrs H, however the scope of the rights afforded by their existing membership was more limited than those under the Fractional Club membership. So, where there was no sole motivation to increase holiday rights, purchasing further points was inappropriate. • The existing membership would not have met Mr and Mrs H’s objective to have a shorter membership term as they could have only surrendered their existing membership in “exceptional circumstances”. • I have overlooked that the “package of rights” which Mr and Mrs H wanted to achieve, could only have been obtained through the purchase of the Fractional Club membership. This sat alongside the prospect of a return upon the sale of the Allocated Property. And it was the ability to obtain this “package of rights” that had the material impact on their decision to make the purchase, which included the intrinsic value of the prospect of a return. Then, the Lender made submissions on the legal test I’ve applied in the PD when assessing whether the relationship is unfair: • The test to be applied, as stated in Carney v NM Rothschild and Sons Ltd, was whether there was a “material impact on the debtor when deciding whether or not to enter the agreement”. • I’ve erred here and applied a different test, reversing the burden of proof. It is necessary to assess whether there is sufficient evidence of a material impact of the breach of Regulation 14(3) on Mr and Mrs H’s decision to enter the Purchase Agreement. • In this case, the lack of evidence that the Supplier sold the Fractional Club as an investment means there’s no breach of Regulation 14(3) to impact upon the fairness of the relationship. Lastly, the Lender reiterates that it doesn’t think the complaint ought to be upheld, but that it also disagrees with the recommendation for fair compensation. It says there is no testimony to say that Mr and Mrs H sought to exit their membership, so the conclusion that they would have exited their previous membership when Mr H turned 75 and so it doesn’t agree with the proposed redress. As the deadline for responses to the PD have now passed, the complaint has come back to me to reconsider. Before I come to my findings, I will set out what I still consider to be the relevant legal and regulatory context. The legal and regulatory context In considering what is fair and reasonable in all the circumstances of the complaint, I am required under DISP 3.6.4R to 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. I will refer to and set out several regulatory requirements, legal concepts and guidance in this decision, but I am satisfied that of particular relevance to this complaint is: • The CCA (including Section 75 and Sections 140A-140C).

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• The law on misrepresentation. • The Timeshare Regulations. • The Unfair Terms in Consumer Contracts Regulations 1999. • The CPUT Regulations. • Case law on Section 140A of the CCA – including, in particular: • The Supreme Court’s judgment in Plevin v Paragon Personal Finance Ltd [2014] UKSC 61 (‘Plevin’) (which remains the leading case in this area). • Scotland v British Credit Trust [2014] EWCA Civ 790 (‘Scotland and Reast’) • Patel v Patel [2009] EWHC 3264 (QB) (‘Patel’). • The Supreme Court’s judgment in Smith v Royal Bank of Scotland Plc [2023] UKSC 34 (‘Smith’). • Carney v NM Rothschild & Sons Ltd [2018] EWHC 958 (‘Carney’). • Kerrigan v Elevate Credit International Ltd [2020] EWHC 2169 (Comm) (‘Kerrigan’). • 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’). Good industry practice – the RDO Code The Timeshare Regulations provided a regulatory framework. But as the parties to this complaint already know, I am also required to take into account, when appropriate, what I consider to have been good industry practice at the relevant time – which, in this complaint, includes the Resort Development Organisation’s Code of Conduct dated 1 January 2010 (the ‘RDO Code’). What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. And having done that, and after reading and considering all the additional submissions from the Lender giving the reasons for why it disagreed with the PD, I remain satisfied that this complaint should be upheld for the reasons set out in the above extract of my PD. I still think it’s more likely than not that the Supplier breached Regulation 14(3) of the Timeshare Regulations by marketing and/or selling Fractional Club membership to Mr and Mrs H as an investment. And, in the circumstances of this complaint, that breach rendered the credit relationship between them and the Lender unfair to them for the purpose of Section 140A of the CCA. However, before I explain why, I want to reiterate that my role as an Ombudsman is not to address every single point that has been made. Instead, it is to decide what is fair and reasonable in the circumstances of this complaint. What is more, I have made my decision on the balance of probabilities – which means I have based it on what I think is more likely than not to have happened given the available evidence and the wider circumstances. The Lender says my PD was inconsistent with the idea that there was no prohibition on the selling of fractional timeshares per se, only a prohibition on selling them as investments. But in my view, this overlooks the part that reads:

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“The term “investment” is not defined in the Timeshare Regulations. In Shawbrook & BPF v FOS, the parties agreed that, 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” at [56]. I will use the same definition. Mr and Mrs H’s share in the Allocated Property clearly, in my view, constituted an investment as it offered them the prospect of a financial return – whether or not, like all investments, that was more than what they first put into it. But 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.” So, for the avoidance of doubt, I recognise that it was possible to market and sell the Fractional Club membership without breaching Regulation 14(3). And I recognise the amount of witness evidence that has been provided by the Supplier in support of the disclaimers in the paperwork I have referred to above, as well as the way in which sales representatives were trained by the Supplier. However, as I said in my PD, I think the Lender’s arguments run the risk of taking too narrow of a view of the prohibition against marketing and/or selling timeshares as an investment. I refer back to what I said above about this: “When the Government consulted on the implementation of the Timeshare Regulations, it discussed what marketing or selling a timeshare as an investment might look like – saying that ‘[a] trader must not market or sell a timeshare or [long-term] holiday product as an investment. For example, there should not be any inference that the cost of the contract would be recoupable at a profit in the future (see regulation 14(3)).” 5 And in my view that must have been correct because it would defeat the consumer-protection purpose of Regulation 14(3) if the concepts of marketing and selling a timeshare as an investment were interpreted too restrictively. So, if a supplier implied to consumers that future financial returns (in the sense of possible profits) from a timeshare were a good reason to purchase it, I think its conduct was likely to have fallen foul of the prohibition against marketing or selling the product as an investment.” So, in my view, if a supplier implied to consumers that future financial returns (in the sense of possible profits) from a timeshare were a good reason to purchase it, I think its conduct was likely to have fallen foul of the prohibition under Regulation 14(3) of the Timeshare Regulations. As I did in the PD, I acknowledge that the Supplier made efforts to avoid describing the Fractional Club membership as an investment in the contemporaneous paperwork. However, this paperwork was only produced and signed after potential customers, such as Mr and Mrs H, had already been through a lengthy sales presentation. 5 The Department for Business Innovation & Skills “Consultation on Implementation of EU Directive 2008/122/EC on Timeshare, Long-Term Holiday Products, Resale and Exchange Contracts (July 2010)”. https://assets.publishing.service.gov.uk/media/5a78d54ded915d0422065b2a/10-500-consultation- directive-timeshare-holiday.pdf

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When coming to my conclusion I have paid close regard to the witness statements the Lender has submitted in response to my PD. These set out that the Supplier’s sales representatives were all trained specifically to avoid breaching the Timeshare Regulations when selling Fractional Membership. They also all had to sign declarations that they had been trained and would abide by that training. I also have paid regard to the judgement in Gallagher. However, that case was decided by the judge on its own facts and circumstances, and what I need to consider here is what I think was most likely to have happened during the sale of the Fractional Club to Mr and Mrs H specifically. While I find the statements useful in understanding how the Supplier trained its sales staff, they don’t assist me greatly when thinking about what happened on this particular occasion, and Mr and Mr H have said in their statement that the Supplier did sell and market Fractional Club to them as an investment. The Lender says I have not adequately considered Mr and Mrs H’s testimony in the PD and it is “contradicted” by testimony from the Supplier in similar cases. But I don’t agree with its analysis here, as I have not received any direct testimony from the Supplier relating to this sale. And I am satisfied that I am able to place weight on, and rely on, the contents of Mr and Mrs H’s statement. The Lender says I have not placed enough weight on other reasons advanced by Mr and Mrs H for entering into the Fractional Club membership. It says that it “agrees” that they were motivated by additional holiday rights and that simply increasing their allocation of points in the existing European Collection membership limited the scope of those rights, so where there was no sole motivation to increase holiday rights, purchasing more European Collection points was inappropriate. But that is not what I said in the PD. Instead, I said that it was not surprising that they were interested in holidays, given the product at the centre of their complaint. But I explained why I did not think that the holidays were likely to have been a significant motivating factor in their decision to enter into the Fractional Club. The Lender says the fact that Mr and Mrs H “could only have surrendered their membership in “exceptional circumstances” demonstrates the European Collection membership would likely not have met their objective to have a shorter term.” But this is not persuasive to me – after all, neither I nor Mr and Mrs H themselves say that they wanted to have a “shorter term”, it was that they were told they would have a “guaranteed exit”. As they say they were worried about passing on any liability to their family members after they passed, I have found that they wanted the guaranteed exit because they wanted to shorten their liability to the Supplier as members. And as I concluded, because they already had ways to exit their membership sooner, through the exceptional circumstances policy, and through the option provided to them by the Supplier in February 2015, I don’t think this was a sufficiently important factor in their decision to become Fractional Club members. Finally the Lender argues that the “package of rights, which [Mr and Mrs H] wanted to achieve, could only have been obtained through the purchase of the Fractional Club membership”, and that it was this package that motivated them to enter the agreement. It then goes on to say: “And this package of rights had a value attached to it, including the intrinsic value of the prospect of a return upon the sale of the Allocated Property. This is why [Mr and Mrs H] purchased Fractional Club membership. It was not because the Fractional Club membership was sold as an investment.”

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I do not agree that any other part of this “package” was of sufficient importance to Mr and Mrs H so they would have entered the Fractional Club regardless, for the reasons I have already given in the PD. As I said, they gained “ancillary” benefits, as described by the Supplier, But as I said in the PD: “Mr and Mrs H say (plausibly in my view) that Fractional Club membership was marketed and sold to them at the Time of Sale as something that offered them more than just holiday rights. So, on the balance of probabilities, I think their purchase was motivated by their share in the Allocated Property and the possibility of a profit as that share was one of the defining features of membership that marked it apart from their existing membership. And with that being the case, I think the Supplier’s breach of Regulation 14(3) was material to the decision they ultimately made.” In conclusion, it remains my view that on the balance of probabilities, the Supplier marketing and/or selling the Fractional Club membership to Mr and Mrs H as an investment was a material part of their decision to enter the Purchase Agreement and related Credit Agreement, and I am not persuaded that they would have continued with their purchase had it not been presented as an investment. Fair Compensation Having found that Mr and Mrs H would not have agreed to purchase Fractional Club membership at the Time of Sale were it not for the breach of Regulation 14(3) of the Timeshare Regulations by the Supplier (as deemed agent for the Lender), and the impact of that breach meaning that, in my view, the relationship between the Lender and the Consumer was unfair under section 140A of the CCA, I think it would be fair and reasonable to put them back in the position they would have been in had they not purchased the Fractional Club membership (i.e., not entered into the Purchase Agreement), and therefore not entered into the Credit Agreement, provided Mr and Mrs H agree to assign to the Lender their Fractional Points or hold them on trust for the Lender if that can be achieved. Mr and Mrs H were existing European Collection members, and their membership was traded in against the purchase price of Fractional Club membership. Under their European Collection membership, they had 14,000 European Collection Points. And, like Fractional Club membership, they had to pay annual management charges as a European Collection member. So, had Mr and Mrs H not purchased Fractional Club membership, they would have always been responsible to pay an annual management charge of some sort. With that being the case, any refund of the annual management charges paid by Mr and Mrs H from the Time of Sale as part of their Fractional Club membership should amount only to the difference between those charges and the annual management charges they would have paid as ongoing European Collection members up until the fees for 2018, by which time Mr H had turned 75 years of age. There should not be a deduction for the fees paid for 2018 and onwards, because I think Mr and Mrs H’s testimony shows they would have exited their European Collection membership by this date, in accordance with the membership rules. So, here’s what I think needs to be done to compensate Mr and Mrs H with that being the case – whether or not a court would award such compensation: (1) The Lender should refund Mr and Mrs H’s repayments to it under the Credit Agreement, including any sums paid to settle the debt, and cancel any outstanding balance if there is one. (2) In addition to (1), the Lender should also refund the difference between their Fractional Club annual management charges paid after the Time of Sale and what their European Collection annual management charges would have been had they not

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purchased Fractional Club membership. It should refund the full annual management charges they paid from the time Mr H turned 75 years of age without any deductions. (3) The Lender can deduct: i. The value of any promotional giveaways that Mr and Mrs H used or took advantage of; and ii. The market value of the holidays* Mr and Mrs H took using their Fractional Points if the Points value of the holiday(s) taken amounted to more than the total number of European Collection Points they would have been entitled to use at the time of the holiday(s) as ongoing European Collection members. However, this deduction should be proportionate and relate only to the additional Fractional Points that were required to take the holiday(s) in question. For example, if Mr and Mrs H took a holiday worth 2,550 Fractional Points and they would have been entitled to use a total of 2,500 European Collection Points at the relevant time, any deduction for the market value of that holiday should relate only to the 50 additional Fractional Points that were required to take it. But if they would have been entitled to use 2,600 European Collection Points, for instance, there shouldn’t be a deduction for the market value of the relevant holiday. (I’ll refer to the output of steps 1 to 3 as the ‘Net Repayments’ hereafter) (4) Simple interest** at 8% per annum should be added to each of the Net Repayments from the date each one was made until the date the Lender settles this complaint. (5) The Lender should remove any adverse information recorded on Mr and Mrs H’s credit files in connection with the Credit Agreement reported within six years of this decision. (6) If Mr and Mrs H’s Fractional Club membership is still in place at the time of this decision, as long as they agree to hold the benefit of their interest in the Allocated Property for the Lender (or assign it to the Lender if that can be achieved), the Lender must indemnify them against all ongoing liabilities as a result of their Fractional Club membership. *I recognise that it can be difficult to reasonably and reliably determine the market value of holidays when they were taken a long time ago and might not have been available on the open market. So, if it isn’t practical or possible to determine the market value of the holidays Mr and Mrs H took using their Fractional Points, deducting the relevant annual management charges (that correspond to the year(s) in which one or more holidays were taken) payable under the Purchase Agreement seems to me to be a practical and proportionate alternative in order to reasonably reflect their usage. **HM Revenue & Customs may require the Lender to take off tax from this interest. If that’s the case, the Lender must give the consumer a certificate showing how much tax it’s taken off if they ask for one. My final decision I uphold this complaint, and direct Shawbrook Bank Limited to calculate and pay fair compensation as set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr H and Mrs H to accept or reject my decision before 7 April 2026. Andrew Anderson Ombudsman

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