Clydesdale Financial Services Limited · DRN-6252307

The complaint Mrs F’s complaint is, in essence, that Clydesdale Financial Services Limited trading as Barclays Partner Finance (the ‘Lender’) acted unfairly and unreasonably by (1) being party to an unfair credit relationship with her under Section 140A of the Consumer Credit Act 1974 (as amended) (the ‘CCA’) and (2) deciding against paying a claim under Section 75 of the CCA. What happened Mrs F was the member of a timeshare provider (the ‘Supplier’) – having purchased a product from it previously. But the product at the centre of this complaint is her membership of a timeshare that I’ll call the ‘Fractional Club’ – which she bought on 28 October 2015 (the ‘Time of Sale’). She entered into an agreement with the Supplier to buy 1040 fractional points at a cost of £10,600 (the ‘Purchase Agreement’). Fractional Club membership was asset backed – which meant it gave Mrs F 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. Mrs F paid for her Fractional Club membership by trading in an earlier membership and taking finance from the Lender (the ‘Credit Agreement’). After refinancing an earlier loan, she ended up borrowing £14,263 from the Lender (the ‘Credit Agreement’). Mrs F – using a professional representative (the ‘PR’) – wrote to the Lender on 10 October 2023 (the ‘Letter of Complaint’) to raise a number of different concerns. Since then the PR has raised some further matters it says are relevant to this outcome of the complaint. As both sides are familiar with the concerns raised, it isn’t necessary to repeat them in detail here beyond the summary above. The Lender did not respond to Mrs F’s complaint so the PR referred it to this Service. The Lender has since explained to this Service why it rejects Mrs F’s concerns on every ground. The complaint was then referred to the Financial Ombudsman Service. It was assessed by an Investigator who, having considered the information on file, rejected the complaint on its merits. Mrs F disagreed with the Investigator’s assessment and asked for an Ombudsman’s decision – which is why it was passed to me. I considered the matter and issued a provisional decision (the ‘PD’) dated 19 March. In that decision, I said: “I have considered all the available evidence and arguments to decide what is fair and reasonable in the circumstances of this complaint. And having done that, I do not currently think this complaint should be upheld.

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However, before I explain why, I want to make it clear that my role as an Ombudsman is not to address every single point that has been made to date. Instead, it is to decide what is fair and reasonable in the circumstances of this complaint. So, if I have not commented on, or referred to, something that either party has said, that does not mean I have not considered it. Section 75 of the CCA: the Supplier’s misrepresentations at the Time of Sale The CCA introduced a regime of connected lender liability under Section 75 that affords consumers (“debtors”) a right of recourse against lenders that provide the finance for the acquisition of goods or services from third-party merchants (“suppliers”) in the event that there is an actionable misrepresentation and/or breach of contract by the supplier. Certain conditions must be met if the protection afforded to consumers is engaged, including, for instance, the cash price of the purchase and the nature of the arrangements between the parties involved in the transaction. The Lender doesn’t dispute that the relevant conditions are met. But for reasons I’ll come on to below, it isn’t necessary to make any formal findings on them here. It was said in the Letter of Complaint that Fractional Club membership had been misrepresented by the Supplier at the Time of Sale because Mrs F was: (1) told by the Supplier that Fractional Club membership had a guaranteed end date when that was not true. (2) told by the Supplier that Fractional Club membership was an “investment” when that was not true. Neither the PR nor Mrs F have set out in any detail what words and/or phrases were allegedly used by the Supplier to misrepresent Fractional Club for the reason given in point 1. However, the PR says that such representations were untrue because the Allocated Property was legally owned by a trustee and there was no indication of what duty of care it had to actively market and sell the property. Further, there is no guarantee that any sale will result at all, leaving prospective members to pay their annual management charge for an indefinite and unspecified period. However, I cannot see why the phrases in point 1 above would have been untrue at the Time of Sale even if it was said. It seems to me to reflect the main thrust of the contract Mrs F entered into. And while, under the relevant Fractional Club Rules, the sale of the Allocated Property could be postponed for up to two years by the ‘Vendor’1, longer than that if there were problems selling and the ‘Owners’2 agreed, or for an otherwise specified period provided there was unanimous agreement in writing from the Owners, that does not render the representation above untrue. So, I am not persuaded that the representation above constituted a false statement of fact even if it was made. As for point 2, it does not strike me as a misrepresentation even if such a representation had been made by the Supplier (which I make no formal finding on). Telling prospective members that they were investing their money because they were buying a fraction or share of one of the Supplier’s properties was not untrue – nor was it untrue to tell prospective members that they would receive some money when the allocated property is sold. After all, a share in an allocated property was clearly the purchase of a share of the net sale proceeds of a specific property in a specific resort. And while the PR might question the exact legal 1 Defined in the FPOC Rules as “CLC Resort Developments Limited”. 2 Defined in the FPOC Rules as “a purchaser who has entered into a Purchase Agreement and has been issued with a Fractional Rights Certificate (which shall include the Vendor for such period of time until the maximum number of Fractional Rights have been acquired).”

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mechanism used to give prospective members that interest, it did not change the fact that they acquired such an interest. The PR has raised other matters as potential misrepresentations, but it seems to me that they are not allegations about the Supplier saying something that was untrue. Rather, it is that Mrs F wasn’t told things about the way the membership worked, for example, that the obligation to pay management fees could be passed on to her children. It seems to me that these are allegations that Mrs F wasn’t given all the information she needed at the Time of Sale, and I will deal with this further below. So, while I recognise that Mrs F - and the PR - have concerns about the way in which Fractional Club membership was sold by the Supplier, when looking at the claim under Section 75 of the CCA, I can only consider whether there was a factual and material misrepresentation by the Supplier. For the reasons I’ve set out above, I’m not persuaded that there was. And that means that I don’t think that the Lender acted unreasonably or unfairly when it dealt with this particular Section 75 claim. Section 75 of the CCA: the Supplier’s Breach of Contract I have already summarised how Section 75 of the CCA works and why it gives consumers a right of recourse against a lender. So, it is not necessary to repeat that here other than to say that, if I find that the Supplier is liable for having breached the Purchase Agreement, the Lender is also liable. Mrs F says that she could not holiday where and when she wanted to. That was framed, in the Letter of Complaint, as an alleged misrepresentation. However, on my reading of the complaint, this suggests that the Supplier was not living up to its end of the bargain, potentially breaching the Purchase Agreement. Yet, like any holiday accommodation, availability was not unlimited – given the higher demand at peak times, like school holidays, for instance. Some of the sales paperwork likely to have been signed by Mrs F states that the availability of holidays was/is subject to demand. It also looks like she made use of her fractional points to holiday on 11 occasions between October 2017 and December 2023. So, whilst I accept that Mrs F may not have been able to take certain holidays, I have not seen enough to persuade me that the Supplier had breached the terms of the Purchase Agreement. So, from the evidence I have seen, I do not think the Lender is liable to pay Mrs F any compensation for a breach of contract by the Supplier. And with that being the case, I do not think the Lender acted unfairly or unreasonably in relation to this aspect of the complaint either. Section 140A of the CCA: did the Lender participate in an unfair credit relationship? I’ve already explained why I’m not persuaded that Fractional Club membership was actionably misrepresented by the Supplier at the Time of Sale. But there are other aspects of the sales process that, being the subject of dissatisfaction, I must explore with Section 140A in mind if I’m to consider this complaint in full – which is what I’ve done next. Having considered the entirety of the credit relationship between Mrs F 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:

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1. The standard of the Supplier’s commercial conduct – which includes its sales and marketing practices at the Time of Sale along with any relevant training material; 2. The provision of information by the Supplier at the Time of Sale, including the contractual documentation and disclaimers made by the Supplier; 3. Evidence provided by both parties on what was likely to have been said and/or done at the Time of Sale; 4. The inherent probabilities of the sale given its circumstances; and 5. Any existing unfairness from a related credit agreement. I have then considered the impact of these on the fairness of the credit relationship between Mrs F and the Lender. The Supplier’s sales & marketing practices at the Time of Sale Mrs F’s complaint about the Lender being party to an unfair credit relationship was and is made for several reasons. They include, allegations that: 1. Mrs F was pressured by the Supplier into purchasing Fractional Club membership at the Time of Sale. 2. the right checks weren’t carried out before the Lender lent to Mrs F. 3. The Credit Agreement was arranged by a broker acting outside of its authorisation. However, as things currently stand, none of these strike me as reasons why this complaint should succeed. I haven’t seen anything to persuade me that the right checks weren’t carried out by the Lender given this complaint’s circumstances. But even if I were to find that the Lender failed to do everything it should have when it agreed to lend (and I make no such finding), I would have to be satisfied that the money lent to Mrs F was actually unaffordable before also concluding that she lost out as a result and then consider whether the credit relationship with the Lender was unfair to her for this reason. But from the information provided, I am not satisfied that the lending was unaffordable for Mrs F. And in reaching that conclusion I have borne in mind the fact that Mrs F cleared the loan in full by the end of its 24-month term. 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 Mrs F knew, amongst other things, how much she was borrowing and repaying each month, who she was borrowing from and that she was borrowing money to pay for Fractional Club membership. And as the lending doesn’t look like it was unaffordable for her, even if the Credit Agreement was arranged by a broker that didn’t have the necessary permission to do (which I make no formal finding on), I can’t see why that led to a financial loss for Mrs F – such that I can say that the credit relationship in question was unfair on her 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 Mrs F, even if the loan wasn’t arranged properly. Overall, therefore, I don’t think that Mrs F’s credit relationship with the Lender was rendered unfair to her under Section 140A for any of the reasons above. But there is another reason, perhaps the main reason, why the PR now says the credit relationship with the Lender was unfair to Mrs F. And that’s the suggestion that Fractional Club membership was marketed and sold to her as an investment in breach of prohibition against selling timeshares in that way.

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The Supplier’s alleged breach of Regulation 14(3) of the Timeshare Regulations The Lender does not dispute, and I am satisfied, that Mrs F’s Fractional Club membership met the definition of a “timeshare contract” and was a “regulated contract” for the purposes of the Timeshare Regulations. Regulation 14(3) of the Timeshare Regulations prohibited the Supplier from marketing or selling Fractional Club membership as an investment. This is what the provision said at the Time of Sale: “A trader must not market or sell a proposed timeshare contract or long-term holiday product contract as an investment if the proposed contract would be a regulated contract.” But the PR and Mrs F say that the Supplier did exactly that at the Time of Sale – saying, in summary, that she was told by the Supplier that Fractional Club membership was the type of investment that would only increase in value. The term “investment” is not defined in the Timeshare Regulations. But for the purposes of this provisional decision, and by reference to the decided authorities, an investment is a transaction in which money or other property is laid out in the expectation or hope of financial gain or profit. A share in the Allocated Property clearly constituted an investment as it offered Mrs F the prospect of a financial return – whether or not, like all investments, that was more than what she first put into it. But it is important to note at this stage that the fact that Fractional Club membership included an investment element did not, itself, transgress the prohibition in Regulation 14(3). That provision prohibits the marketing and selling of a timeshare contract as an investment. It doesn’t prohibit the mere existence of an investment element in a timeshare contract or prohibit the marketing and selling of such a timeshare contract per se.3 In other words, the Timeshare Regulations did not ban products such as the Fractional Club. They just regulated how such products were marketed and sold. To conclude, therefore, that Fractional Club membership was marketed or sold to Mrs F as an investment in breach of Regulation 14(3), I have to be persuaded that it was more likely than not that the Supplier marketed and/or sold membership to her as an investment, i.e. told her or led her to believe that Fractional Club membership offered her the prospect of a financial gain (i.e., a profit) given the facts and circumstances of this complaint. There is competing evidence in this complaint as to whether Fractional Club membership was marketed and/or sold by the Supplier at the Time of Sale as an investment in breach of regulation 14(3) of the Timeshare Regulations. On the one hand, it is clear that the Supplier made efforts to avoid specifically describing membership of the Fractional Club as an ‘investment’ or quantifying to prospective purchasers, such as Mrs F, 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. 3 The PR has argued that Fractional Club membership amounted to an Unregulated Collective Investment Scheme, however this was considered and rejected in 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).

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On the other hand, I acknowledge that the Supplier’s sales process left open the possibility that the sales representative may have positioned Fractional Club membership as an investment. So, I accept that it’s equally possible that Fractional Club membership was marketed and sold to Mrs F 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 Mrs F rendered unfair? Having found that it was possible that the Supplier breached Regulation 14(3) of the Timeshare Regulations at the Time of Sale, I now need to consider what impact that breach had on the fairness of the credit relationship between Mrs F and the Lender under the Credit Agreement and related Purchase Agreement as the case law on Section 140A makes it clear that regulatory breaches do not automatically create unfairness for the purposes of that provision. Such breaches and their consequences (if there are any) must be considered in the round, rather than in a narrow or technical way. Indeed, it seems to me that, if I am to conclude that a breach of Regulation 14(3) led to a credit relationship between Mrs F and the Lender that was unfair to her and warranted relief as a result, whether the Supplier’s breach of Regulation 14(3) led her to enter into the Purchase Agreement and the Credit Agreement is an important consideration. But on my reading of the evidence before me, the prospect of a financial gain from Fractional Club membership was not an important and motivating factor when Mrs F decided to go ahead with her purchase. That doesn’t mean Mrs F wasn’t interested in a share in the Allocated Property. After all, that wouldn’t be surprising given the nature of the product at the centre of this complaint. But as Mrs F herself does not persuade me that her purchase was motivated by her share in the Allocated Property and the possibility of a profit, I don’t think a breach of Regulation 14(3) by the Supplier was likely to have been material to the decision she ultimately made. What I am considering here, though, is whether any such positioning of the Fractional Club membership as an investment was material to Mrs F’s decision to purchase it (and in turn, therefore, to enter into the Credit Agreement). Mrs F’s comments do not lead me to think that it was. I say that because Mrs F’s recollections from the Time of Sale don’t sufficiently persuade me that anything said by the Supplier about the investment potential of Fractional Club membership led her to buy it as an investment from which she would make a financial gain. Her brief witness statement provides a chronological factual account of the sale of the two memberships she purchased. It also describes her unhappiness with her subsequent discovery that the resorts available for use transpired not to be exclusive to Fractional Club members but were capable of being booked on online travel sites at a lower price. Had Mrs F bought Fractional Membership because she was motivated by its investment potential, I would have expected her recollections about this aspect of the sale to be more detailed. Whilst I note she said in her witness statement, that she was told that, “The [supplier] reps said we were purchasing a 19 year investment where we would not only get our money we have invested back but we would also make a profit when the apartment we were allocated was sold”, her recollections contain no contextualisation such that would persuade me that she was induced into the purchase on the basis that she would be making a financial gain. Mrs F’s witness statement says nothing about how the value of the property

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was meant to increase in value over time or that she was motivated by such a prospect to make the purchase. Rather her motivation for the purchase appears to have been to gain access to superior quality accommodation that was not available to her under her Trial Membership. I’ve thought too about the PR’s comments regarding a further, second-hand, recollection from Mrs F at the Time of Sale. The PR has provided a copy of a call note from a Timeshare advice line that Mrs F contacted in December 2022. The PR says that the comments recorded during that call confirm that the Fractional Club membership was sold to Mrs F as an investment. The PR also says that the call note is definitive proof that Mrs F’s testimony (in the form of her witness statement made around two years later) is an accurate recollection of how membership was sold and marketed to her as an investment. I don’t disagree with the PR that the call note and Mrs F’s witness statement broadly contain the same account of the Time of Sale. But, like the witness statement, the call note also says nothing about how the value of the Allocated Property was meant to increase in value over time or that Mrs F was motivated by such a prospect to make the purchase. It records Mrs F’s motivation for the purchase as access to a better standard of accommodation. Nevertheless, I can’t rule out the possibility that Mrs F may have been interested in a share in the Allocated Property. After all, that wouldn’t be surprising given the nature of the product at the centre of this complaint. But as Mrs F herself does not persuade me that her purchase was motivated by her share in the Allocated Property and the possibility of a profit, I don’t think a breach of Regulation 14(3) by the Supplier was likely to have been material to the decision she ultimately made. I have also borne in mind that in October 2015, Mrs F was upgrading her Trial membership to the Fractional Club along with the fact she used her Fractional Club membership to take 11 holidays in a six-year period. This serves to underline her interest in the holiday benefits the membership offered, which leads me to think she would have gone ahead with the purchase even if it had not been presented to her as an investment opportunity. On balance, therefore, even if the Supplier had marketed or sold the Fractional Club membership as an investment in breach of Regulation 14(3) of the Timeshare Regulations, I am not persuaded that Mrs F’s decision to purchase Fractional Club membership at the Time of Sale was motivated by the prospect of a financial gain (i.e., a profit). On the contrary, I think the evidence suggests she would have pressed ahead with her purchase whether or not there had been a breach of Regulation 14(3). And for that reason, I do not think the credit relationship between Mrs F and the Lender was unfair to her even if the Supplier had breached Regulation 14(3). The provision of information by the Supplier at the Time of Sale The PR says that Mrs F was not given sufficient information at the Time of Sale by the Supplier about membership, including about the ongoing costs of Fractional Club membership and the fact that her heirs could inherit these costs. As I’ve already indicated, the case law on Section 140A makes it clear that it does not automatically follow that regulatory breaches create unfairness for the purposes of the unfair relationship provisions. The extent to which such mistakes render a credit relationship unfair must also be determined according to their impact on the complainant. I acknowledge that it is also possible that the Supplier did not give Mrs F 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

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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 Mrs F nor the PR have persuaded me that she would not have pressed ahead with their purchase had the finer details of the Fractional Club’s ongoing costs been disclosed by the Supplier in compliance with Regulation 12, I cannot see why any failings in that regard are likely to be material to the outcome of this complaint given its facts and circumstances. As for the PR’s argument that Mrs F’s heirs would inherit the on-going management charges, I fail to see how that could be the case or that it could have led to an unfairness that warrants a remedy.” In conclusion, given the facts and circumstances of this complaint, I did not think that the Lender acted unfairly or unreasonably when it dealt with Mrs F’s Section 75 claim, and I was not persuaded that the Lender was party to a credit relationship with her under the Credit Agreement that was unfair to her for the purposes of Section 140A of the CCA. And having taken everything into account, I could see no other reason why it would be fair or reasonable to direct the Lender to compensate Mrs F. The Lender responded to the PD and accepted it. The PR also responded – it did not accept the PD and provided some further comments and evidence it wished to be considered. Having received the relevant responses from both parties, I’m now finalising my decision. 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. The legal and regulatory context that I think is relevant to this complaint is, in many ways. no different to that shared in several hundred published ombudsman decisions on very similar complaints – which can be found on the Financial Ombudsman Service’s website. And with that being the case, it is not necessary to set out that context in detail here. But I would add that the following regulatory rules/guidance are also relevant:

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The Consumer Credit Sourcebook (‘CONC’) – Found in the Financial Conduct Authority’s (the ‘FCA’) Handbook of Rules and Guidance Below are the most relevant provisions and/or guidance as they were at the relevant time: • CONC 3.7.3 [R] • CONC 4.5.3 [R] • CONC 4.5.2 [G] The FCA’s Principles The rules on consumer credit sit alongside the wider obligations of firms, such as the Principles for Businesses (‘PRIN’). Set out below are those that are most relevant to this complaint: • Principle 6 • Principle 7 • Principle 8 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. 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 Mrs F and the Lender was unfair. In particular, the PR has provided further comments in relation to whether the membership was sold to Mrs F as an investment at the Time of Sale and that the fact it was, motivated her to make the purchase. 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.

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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 In its response to my PD, the PR has reasserted its view that the Supplier marketed the Fractional Club membership to Mrs F as an investment and that this was a motivating factor in her decision to purchase. I accepted in my PD that the membership may well have been marketed as an investment to Mrs F in breach of the prohibition in Regulation 14(3) of the Timeshare Regulations. I also explained that while the Supplier’s sales processes left open the possibility that the sales representative may have positioned Fractional Club membership as an investment, it isn’t necessary to make a finding on this as it is not determinative of the outcome of the complaint. I explained that Regulatory breaches do not automatically create unfairness and that such breaches and their consequences (if there are any) must be considered in the round, rather than in a narrow or technical way. The PR’s response to my PD hasn’t changed my view of this, and so whether the Supplier’s breach of Regulation 14(3) led Mrs F to enter into the Purchase Agreement and the Credit Agreement remains an important consideration. In my PD I explained the reasons why I didn’t think any breach of Regulation 14(3) had led Mrs F to proceed with her purchase. In short, I was not persuaded that her decision was motivated by the prospect of a financial gain (i.e., a profit). In reaching that view, I took into account the testimony given (both primary and second-hand) by Mrs F in the course of her complaint. I recognise the PR has interpreted Mrs F’s testimony differently to how I have, and I have carefully considered its further comments. Ultimately though, they have not led me to a different conclusion. I explained in my PD that Mrs F was mainly motivated by the prospect of gaining access to superior quality accommodation that was not available to her under her Trial Membership – which was a factor in my overall conclusion in light of all the available evidence that she would, on balance, have pressed ahead with her purchase of the Fractional Club membership even if there had been a breach of Regulation 14(3). The essence of the PR’s response to my PD is that the primary motivation for Mrs F’s decision to purchase Fractional Club membership was ‘financial profit and recovery’. It says the evidence provided undeniably shows this to be the case and that I have misinterpreted that evidence. I am unable to agree and I’ll explain why. The PR has cited the same quotation from Mrs F’s witness statement that I used in my PD namely, “The [supplier] reps said we were purchasing a 19 year investment where we would not only get our money we have invested back but we would also make a profit when the apartment we were allocated was sold”. The PR says this clearly shows that membership was sold as an investment. As I said in my PD, I accept that membership may well have been marketed as an investment to Mrs F in breach of the prohibition in Regulation 14(3) of the Timeshare Regulations. But the recollections in her witness statement contain no persuasive contextualisation that she was induced to make the purchase on this basis. I remain of the view that Mrs F’s primary motivation for doing so was the fact that Trial Membership did not provide access to the type of holiday apartment she wanted. Mrs F also said in her witness statement, “we could not use the trial membership for the type of apartment we wanted. In order to use the higher end apartment we would need to upgrade to a Fractional product.’ The PR has also quoted from the webform Mrs F completed. It says this is definitive evidence that Mrs F felt financially trapped (by the Trial membership), that the Supplier had

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positioned Fractional membership as the only route to recover money she had already spent and that the upgrade had been framed in financial-return terms. I considered the content of the webform prior to issuing my PD. I did not know then, and I do not know now, what prompts or questions induced the comment Mrs F made on the form. Thus, the comment lacks context. That said, the comment is not without factual merit. Mrs F clearly considered the only way to get any/all money back was to (trade in her trial membership and) upgrade to fractional membership. Whilst that appears to be an accurate statement of how the two memberships worked, Mrs F says nothing here about there being an investment element (from which she would make a financial gain) to Fractional membership and that this is what motivated her purchase it. The PR has made a similar observation in respect of the third-party call note from the Timeshare advice line that Mrs F contacted and in respect of the call note between it and Mrs F. It considers that I was wrong to dismiss these call notes as lacking detail about how the value of Fractional Club membership was meant to increase. But on reviewing the call notes again, I remain of that view. There is no mention within them about how the value of the Allocated Property was meant to increase in value over time or that Mrs F was motivated by such a prospect to make the purchase. Mrs F’s motivation for the purchase is noted as access to a better standard of accommodation. The fact is that Trial membership operated very differently to Fractional membership. The former offered a set number of holidays to be taken in a set period of time, whereas the latter offered a share of an Allocated Property and a prospect of financial return. I’ve thought too about the PR’s comments about the Supplier’s pricing summary confirming what it refers to as the ‘investment-recovery structure’ of Fractional Club membership. I can’t however agree that Mrs F traded in her Trial Membership because Fractional membership was financially superior, was the only way to recover ‘lost’ money and that it would provide a future return. I think Mrs F was clear in own first-hand testimony that she upgraded for access to a higher standard of accommodation; this is why she took out more finance. And whilst the PR has alluded to Mrs F being under financial pressure at the time she agreed to make the purchase I have seen no evidence that she was. I have also borne in mind that Mrs F was given a 14-day cooling off period so that if, on reflection, she decided she did not want to proceed she could have cancelled her membership. And whilst I’ve thought about the PR’s comment that I am wrong to assume taking holidays amounts to non-investment motivation for the purchase I simply am unable to agree for the reasons I have already set out here and in my PD On my reading of the evidence before me, the prospect of a financial gain from Fractional Club membership was not an important and motivating factor when Mrs F decided to go ahead with her purchase. That doesn’t mean I think she wasn’t interested in a share in the Allocated Property. After all, that wouldn’t be surprising given the nature of the product at the centre of this complaint. But as Mrs F herself has not persuaded me that her purchase was motivated by her share in the Allocated Property and the possibility of a profit, I don’t think a breach of Regulation 14(3) by the Supplier was likely to have been material to the decision she ultimately made. So, ultimately, for the above reasons, along with those I already explained in my PD, I remain unpersuaded that any breach of Regulation 14(3) was material to Mrs F’s purchasing decision. And for that reason, I do not think the credit relationship between Mrs F and the Lender was unfair to her even if the Supplier had breached Regulation 14(3).

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S140A conclusion Given all of the factors I’ve looked at in this part of my decision, including the relevant relationships, arrangements and payments between the Lender and the Supplier and having taken all of them into account, I’m not persuaded that the credit relationship between Mrs F and the Lender under the Credit Agreement and related Purchase Agreement was unfair to her. So, I don’t think it is fair or reasonable that I uphold this complaint on that basis. Conclusion In conclusion, given the facts and circumstances of this complaint, I do not think that the Lender acted unfairly or unreasonably when it dealt with Mrs F’s Section 75 claim, and I am not persuaded that the Lender was party to a credit relationship with her under the Credit Agreement that was unfair to her for the purposes of Section 140A of the CCA. And having taken everything into account, I see no other reason why it would be fair or reasonable to direct the Lender to compensate Mrs F. My final decision For the reasons I have set out 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 Mrs F to accept or reject my decision before 22 April 2026. Claire Woollerson Ombudsman

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