Shawbrook Bank Limited · DRN-6242482

The complaint Mr and Mrs H’s complaint is, in essence, that Shawbrook Bank Limited (the ‘Lender’) acted unfairly and unreasonably by (1) being party to an unfair credit relationship with them under Section 140A of the Consumer Credit Act 1974 (as amended) (the ‘CCA’), and (2) deciding against paying claims under Section 75 of the CCA. Background to the complaint Mr and Mrs H were members of a timeshare provider (the ‘Supplier’) – having purchased a number of products from it over time. But the product at the centre of this complaint is their membership of a timeshare that I’ll call the ‘Fractional Club’ – points in which Mr and Mrs H purchased on the dates below: • 1,820 fractional points on 13 April 2014 for £8,699 (‘Purchase Agreement 1’) • 3,120 fractional points on 19 August 2014 for £19,541 – having traded in the first lot of 1,820 fractional points. (‘Purchase Agreement 2’) (which, when appropriate, I’ll simply refer to as the ‘Purchase Agreements’) As this complaint is concerned with the purchases on 13 April 2014 and 19 August 2014, those are the ‘Times of Sale’ for the purposes of my decision. 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 the relevant purchase agreement (the ‘Allocated Properties’) after their membership term ends. Mr and Mrs H paid for their fractional points by taking the following amounts of finance of from the Lender: • £8,699 on 13 April 2014 (‘Credit Agreement 1’) • £28,607 on 19 August 2014 (‘Credit Agreement 2’), which also consolidated Credit Agreement 1. (which, when appropriate, I’ll simply refer to as the ‘Credit Agreements’) Mr and Mrs H – using a professional representative (the ‘PR’) – wrote to the Lender on 15 December 2021 (the ‘Letter of Complaint’) to raise a number of different concerns. As those concerns haven’t changed since they were first raised, and as both sides are familiar with them, it isn’t necessary to repeat them in detail here beyond the summary above.

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The Lender dealt with Mr and Mrs H’s concerns as a claim and issued its response on 14 February 2022, rejecting the claim entirely on the basis it was time barred under the Limitation Act 1980 (the ‘LA’). Mr and Mrs H then complained to the Lender on 25 March 2022 about its handling of the claim. The Lender issued its final response letter dated 13 June 2022, rejecting the complaint on the basis it was also time barred. The complaint was then referred to the Financial Ombudsman Service. It was assessed by an Investigator who, having considered the information on file, thought: • Mr and Mrs H’s complaint about the Lender’s participation in and perpetuation of an unfair credit relationship under Credit Agreement 1 had been made too late with regard to the relevant time limits. • Mr and Mrs H’s complaint about the Lender’s handling of their claims under Section 75 of the CCA relating to both sales had been made in time, but the Limitation Act provided the Lender with a complete defence to the claims. • Mr and Mrs H’s complaint about the Lender’s participation in and perpetuation of an unfair credit relationship under Credit Agreement 2 had been made in time, and that part of the complaint should be upheld. Mr and Mrs H didn’t respond to the Investigator’s assessment. The Lender disagreed with the Investigator’s assessment. It initially maintained its position that the entirety of Mr and Mrs H’s complaint had been made too late and was therefore time barred. Later, it argued their complaint about the alleged unfair credit relationship under Credit Agreement 2 should be rejected on its merits. So, the complaint was passed to me to decide. I considered the matter and issued a provisional decision (the ‘PD’) dated 2 March 2026. In that decision, I said: 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, I do not currently think this complaint should be upheld. 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’s to decide what’s fair and reasonable in the circumstances of this complaint. So, if I have not commented on, or referred to, something that either party has said, that does not mean I have not considered it. The legal and regulatory context In considering what’s fair and reasonable in all the circumstances of the complaint, I’m required under DISP 3.6.4 R 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.

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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’s not necessary to set out that context in detail here. But I would add that the following regulatory rules/guidance are also relevant: 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 The Financial Ombudsman Service’s jurisdiction I previously considered if Mr and Mrs H’s complaint was within the jurisdiction of the Financial Ombudsman Service. I issued a jurisdiction decision (the ‘JD’) on 4 July 2025 in which I concluded that, in summary: • Mr and Mrs H’s complaint about the Lender’s participation in and perpetuation of an unfair credit relationship under Credit Agreement 1 was made too late and could not be considered by the Financial Ombudsman Service; and, • Mr and Mrs H’s complaint about the Lender’s handling of their claims under Section 75 of the CCA, and their complaint about the Lender’s participation in and perpetuation of an unfair credit relationship under Credit Agreement 2 was made in time and could be considered by the Financial Ombudsman Service. I gave both parties the opportunity to respond to the JD. The PR confirmed it had nothing further to add, and the Lender did not make any new submissions. In view of these responses, I see no reason to depart from the conclusions I reached in my JD, or comment further on our jurisdiction to consider Mr and Mrs H’s complaint. So I maintain the conclusions I reached in my JD in this provisional decision.

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Section 75 of the CCA: the Supplier’s misrepresentations at the Times 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 has said Mr and Mrs H’s claims were made too late under the provisions of the LA. It says that under the LA, Mr and Mrs H had six years from the Times of Sale to make their claims and, as they made their claims over six years later, it has a defence to any claims. Having considered these matters, I agree with what the Lender has said, so I do not think it acted unfairly or unreasonably when it dealt with these particular Section 75 claims. However, that is not an end to the matter as misrepresentations made at the Times of Sale can still give rise to an unfair credit relationship, even if the limitation period to make a freestanding claim has passed (see Scotland and Reast v. British Credit Trust Limited [2014] EWCA Civ 790). So although I think it was fair for the Lender to reject the claims made under Section 75 of the CCA, I will consider the substance of the alleged misrepresentations here in relation to Credit Agreement 2. It was said in the Letter of Complaint that Fractional Club membership had been misrepresented by the Supplier at the Time of Sale for Purchase Agreement 2 because Mr and Mrs H were: 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. 3. Told by the Supplier that its holiday resorts were exclusive to its members when that was not true. However, 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. After all, a share in an allocated property was, by its very nature, an investment. And while, as I understand it, the sale of the Allocated Property could be postponed in certain circumstances according to the Fractional Club Rules, Mr and Mrs H say little to nothing to persuade me that they were given a guarantee by the Supplier that Allocated Property 2 would be sold on a specific date, when such a promise would have been impossible to stand by given the inevitable uncertainty of selling property some way into the future. And as there’s nothing else on file to support the PR’s allegation, I’m not persuaded that there was a representation by the Supplier on the issue in question that constituted a false statement of fact. As for point 3, while it’s possible that Fractional Club membership was misrepresented at the Time of Sale for that reason, I don’t think it’s probable. It’s given little to none of the colour or context necessary to demonstrating that the Supplier made a false statement of existing fact and/or opinion. And as there isn’t any other evidence on file to support the suggestion that Fractional Club membership was misrepresented for this reason, I don’t think it was.

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So, while I recognise that Mr and Mrs H 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 I don’t think the Lender acted unreasonably or unfairly when it dealt with this particular Section 75 claim. Section 140A of the CCA: did the Lender participate in an unfair credit relationship under Credit Agreement 2? I’ve already explained why I’m not persuaded that Fractional Club membership was actionably misrepresented by the Supplier at the Time of Sale for Purchase Agreement 2. 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 Mr and Mrs H and the Lender along with all of the circumstances of the complaint, I don’t think the credit relationship between them was likely to have been rendered unfair for the purposes of Section 140A. When coming to that conclusion, and in carrying out my analysis, I have looked at: 1. The standard of the Supplier’s commercial conduct – which includes its sales and marketing practices at the Time of Sale along with any relevant training material; 2. The provision of information by the Supplier at the Time of Sale, including the contractual documentation and disclaimers made by the Supplier; 3. The commission arrangements between the Lender and the Supplier at the Time of Sale and the disclosure of those arrangements; 4. Evidence provided by both parties on what was likely to have been said and/or done at the Time of Sale; 5. The inherent probabilities of the sale given its circumstances; and, when relevant 6. Any existing unfairness from a related credit agreement. I have then considered the impact of these on the fairness of the credit relationship between Mr and Mrs H and the Lender. The Supplier’s sales & marketing practices at the Time of Sale for Purchase Agreement 2 Mr and Mrs H’s complaint about the Lender being party to an unfair credit relationship was and is made for several reasons. The PR says, for instance, that: 1. The right checks weren’t carried out before the Lender lent to Mr and Mrs H; and 2. Mr and Mrs H were pressured by the Supplier into purchasing Fractional Club membership at the Time of Sale.

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However, as things currently stand, neither 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 Mr and Mrs H was actually unaffordable, before also concluding that they lost out as a result, and then consider whether the credit relationship with the Lender was unfair to them for this reason. But from the information provided, I’m not satisfied that the lending was unaffordable for Mr and Mrs H. I acknowledge that Mr and Mrs H may have felt weary after a sales process that went on for a long time. But they say little about what was said and/or done by the Supplier during their sales presentation that made them feel as if they had no choice but to purchase Fractional Club membership when they simply did not want to. They were also given a 14-day cooling off period and they have not provided a credible explanation for why they did not cancel their membership during that time. And with all of that being the case, there is insufficient evidence to demonstrate that Mr and Mrs H made the decision to purchase Fractional Club membership because their ability to exercise that choice was significantly impaired by pressure from the Supplier. Overall, therefore, I don’t think that Mr and Mrs H’s credit relationship with the Lender was rendered unfair to them under Section 140A for any of the reasons above. But there is another reason, perhaps the main reason, why the PR now says the credit relationship with the Lender was unfair to them. And that’s the suggestion that Fractional Club membership was marketed and sold to them as an investment in breach of the prohibition against selling timeshares in that way. The Supplier’s alleged breach of Regulation 14(3) of the Timeshare Regulations A share in the Allocated Property clearly constituted an investment as it offered Mr and Mrs H the prospect of a financial return – whether or not, like all investments, that turned out to be more than what they first put into it. But it’s important to note at this stage that the fact 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 does not 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. And 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.

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On the one hand, it’s 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 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. But on the other hand, I acknowledge the Supplier’s sales process left open the possibility that the sales representative(s) may have positioned Fractional Club membership as an investment. So, I accept it’s also possible that Fractional Club membership was marketed and sold to Mr and Mrs H 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. Would the credit relationship between the Lender and Mr and Mrs H under Credit Agreement 2 have been rendered unfair to them had there been a breach of Regulation 14(3) of the Timeshare Regulations? Having found 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 (if there was one) had on the fairness of the credit relationship between Mr and Mrs H and the Lender under Credit Agreement 2 and related Purchase Agreement 2, 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’m 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) led them to enter into Purchase Agreement 2 and Credit Agreement 2 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 Mr and Mrs H decided to go ahead with that purchase. The PR has provided us with a statement from Mr and Mrs H in which they have said, amongst other things, that: “We were told at the presentation that the contract was for 19 years after which time the property, in which we owned the fractions, would be sold and the proceeds from that sale would be shared amongst the fractional owners.” And: “We were shown representations of historic property growth and were told that this was a good long term investment and that it would be sold after 19 years. From the point above, we were told that it would have monetary value at the end of the 19 years at least to the amount we had put in.”

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And: “In April and August 2014, having used the product for approx. 1 year and realising that it wasn’t meeting our needs (difficult to book last minute and almost impossible to secure the resorts we wanted at the time we wanted them), we were informed by [the Supplier] that the solution was to buy more points. (sic)” It’s not apparent from Mr and Mrs H’s statement what it was that the Supplier told them that induced them into purchasing Fractional Club membership at the Time of Sale. Their statement includes a number of recollections of what the Supplier told them and showed them as I’ve set out above. But their statement does not offer a clear indication of what they found appealing about Fractional Club membership, and therefore what it was that motivated them to go ahead with the purchase. Furthermore, it’s not clear which of Mr and Mrs H’s recollections relate to the Time of Sale. Their statement begins by setting out the key details of four separate purchases of timeshare products from the Supplier, three of which were fractional timeshares. But their statement does not distinguish which of their recollections relates to which purchase. While I accept it’s possible their experiences of making each purchase were similar, the context of each purchase was not so similar. For instance, unlike their first purchase of a fractional timeshare, at the Time of Sale for Purchase Agreement 2, they were already Fractional Club members having purchased fractional points on two previous occasions. What’s more, Mr and Mrs H’s recollections about the investment element of Fractional Club membership in no way reflect that context. Whereas, that context is reflected by their recollection that the Supplier told them they needed to buy more points to be able to book the holidays they wanted. So it appears to me that is what motivated them to make their purchase at the Time of Sale. That does not mean they were not interested in a share in the Allocated Property. After all, that would not be surprising given the nature of the product at the centre of this complaint. But as Mr and Mrs H themselves don’t persuade me that their purchase was motivated by their share in Allocated Property 2 and the possibility of a profit, I don’t think a breach of Regulation 14(3) by the Supplier was likely to have been material to the decision they ultimately made. On balance, therefore, even if the Supplier had marketed or sold Fractional Club membership as an investment in breach of Regulation 14(3) of the Timeshare Regulations, I’m not persuaded that Mr and Mrs H’s decision to purchase Fractional Club membership at the Time of Sale was motivated by the prospect of a financial gain (i.e. a profit). On the contrary, I think the evidence suggests they would have pressed ahead with that 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 Mr and Mrs H and the Lender under Credit Agreement 2 was unfair to them even if the Supplier had breached Regulation 14(3). The provision of information by the Supplier at the Time of Sale for Purchase Agreement 2 The PR says that Mr and Mrs H were not given sufficient information at the Time of Sale by the Supplier in order to make an informed choice.

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It’s not entirely clear what information the PR thinks the Supplier failed to provide at the Time of Sale. But 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(s). So, while I acknowledge it’s also possible that the Supplier did not give Mr and Mrs H sufficient information, in good time, in order to satisfy the requirements of Regulation 12 of the Timeshare Regulations (which was concerned with the provision of ‘key information’), even if that was the case, neither Mr and Mrs H nor the PR have persuaded me that they were deprived of information that would have led them to make a different purchasing decision at the Time of Sale. And with that being the case, even if there were information failings (which I make no formal finding on), I can’t see why they led to them experiencing a financial loss. The PR also says that a payment of commission from the Lender to the Supplier at the Time of Sale should lead me to uphold this complaint because, simply put, information in relation to that payment went undisclosed at the Time of Sale. As both sides already know, the Supreme Court handed down an important judgment on 1 August 2025 in a series of cases concerned with the issue of commission: Johnson v FirstRand Bank Ltd, Wrench v FirstRand Bank Ltd and Hopcraft v Close Brothers Ltd [2025] UKSC 33 (‘Hopcraft, Johnson and Wrench’). The Supreme Court ruled that, in each of the three cases, the commission payments made to car dealers by lenders were legal, as claims for the tort of bribery, or the dishonest assistance of a breach of fiduciary duty, had to be predicated on the car dealer owing a fiduciary duty to the consumer, which the car dealers did not owe. A “disinterested duty”, as described in Wood v Commercial First Business Ltd & ors and Business Mortgage Finance 4 plc v Pengelly [2021] EWCA Civ 471, is not enough. However, the Supreme Court held that the credit relationship between the lender and Mr Johnson was unfair under Section 140A of the CCA because of the commission paid by the lender to the car dealer. The main reasons for coming to that conclusion included, amongst other things, the following factors: 1. The size of the commission (as a percentage of the total charge for credit). In Mr Johnson’s case it was 55%. This was “so high” and “a powerful indication that the relationship…was unfair” (see paragraph 327); 2. The failure to disclose the commission; and 3. The concealment of the commercial tie between the car dealer and the lender. The Supreme Court also confirmed that the following factors, in what was a non-exhaustive list, will normally be relevant when assessing whether a credit relationship was/is unfair under Section 140A of the CCA: 1. The size of the commission as a proportion of the charge for credit; 2. The way in which commission is calculated (a discretionary commission arrangement, for example, may lead to higher interest rates); 3. The characteristics of the consumer;

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4. The extent of any disclosure and the manner of that disclosure (which, insofar as Section 56 of the CCA is engaged, includes any disclosure by a supplier when acting as a broker); and 5. Compliance with the regulatory rules. From my reading of the Supreme Court’s judgment in Hopcraft, Johnson and Wrench, it sets out principles which apply to credit brokers other than car dealer–credit brokers. So, when considering allegations of undisclosed payments of commission like the one in this complaint, Hopcraft, Johnson and Wrench is relevant law that I’m required to consider under DISP 3.6.4 R. But I don’t think Hopcraft, Johnson and Wrench assists Mr and Mrs H in arguing that their credit relationship with the Lender was unfair to them for reasons relating to commission given the facts and circumstances of this complaint. I have not seen anything to suggest that the Lender and the Supplier were tied to one another contractually or commercially in a way that wasn’t properly disclosed to Mr and Mrs H, nor have I seen anything that persuades me the commission arrangement between them gave the Supplier a choice over the interest rate that led them into a credit agreement that cost disproportionately more than it otherwise could have. I acknowledge it’s possible that the Lender and the Supplier failed to follow the regulatory guidance in place at the Time of Sale insofar as it was relevant to disclosing the commission arrangements between them. But as I’ve said above, the case law on Section 140A makes it clear that regulatory breaches do not automatically create unfairness for the purposes of that provision. Such breaches and their consequences (if there are any) must be considered in the round, rather than in a narrow or technical way. And with that being the case, it isn’t necessary to make a formal finding on that because, even if the Lender and the Supplier failed to follow the relevant regulatory guidance at the Time of Sale, it‘s for the reasons set out below that I don’t think any such failure is itself a reason to find the credit relationship in question was unfair to Mr and Mrs H. In stark contrast to the facts of Mr Johnson’s case, the amount of commission paid by the Lender to the Supplier for arranging Credit Agreement 2 that Mr and Mrs H entered into wasn’t high. At £2,860.70, it was only 10% of the amount borrowed and even less than that (5.47%) as a proportion of the charge for credit. So, had Mr and Mrs H known at the Time of Sale that the Supplier was going to be paid a flat rate of commission at that level, I’m not persuaded that they either wouldn’t have understood that or would have otherwise questioned the size of the payment at that time. After all, Mr and Mrs H wanted Fractional Club membership and had no obvious means of their own to pay for it. And at such a low level, the impact of commission on the cost of the credit they needed for a timeshare they wanted does not strike me as disproportionate. So, I think they would still have taken out the loan to fund their purchase at the Time of Sale had the amount of commission been disclosed.

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What’s more, based on what I’ve seen, the Supplier’s role as a credit broker wasn’t a separate service and distinct from its role as the seller of timeshares. It was simply a means to an end in the Supplier’s overall pursuit of a successful timeshare sale. I can’t see that the Supplier gave an undertaking – either expressly or impliedly – to put to one side its commercial interests in pursuit of that goal when arranging Credit Agreement 2. And as it wasn’t acting as an agent of Mr and Mrs H but as the supplier of contractual rights they obtained under Purchase Agreement 2, the transaction does not strike me as one with features that suggest the Supplier had an obligation of ‘loyalty’ to them when arranging Credit Agreement 2, and thus a fiduciary duty. Overall, therefore, I’m not persuaded the commission arrangements between the Supplier and the Lender were likely to have led to a sufficiently extreme inequality of knowledge that rendered the credit relationship under Credit Agreement 2 unfair to Mr and Mrs H. S140A: Conclusion Given all of the factors I’ve looked at in this part of my decision, and having taken all of them into account, I’m not persuaded that the credit relationship between Mr and Mrs H and the Lender under Credit Agreement 2 and related Purchase Agreement 2 was unfair to them. So, I don’t think it’s fair or reasonable that I uphold this complaint on that basis. Commission: The alternative grounds of complaint While I’ve found that Mr and Mrs H’s credit relationship with the Lender under Credit Agreement 2 wasn’t unfair to them for reasons relating to the commission arrangements between it and the Supplier, two of the grounds on which I came to that conclusion also constitute separate and freestanding complaints to Mr and Mrs H’s complaint about an unfair credit relationship. As such I can also consider their commission complaint in relation to Credit Agreement 1 on these grounds. The first ground relates to whether the Lender is liable for the dishonest assistance of a breach of fiduciary duty by the Supplier because it took payments of commission from the Lender without telling Mr and Mrs H (i.e. secretly). And the second relates to the Lender’s compliance with the regulatory guidance in place at the Times of Sale insofar as it was relevant to disclosing the commission arrangements between them. However, for the reasons I set out above, I’m not persuaded that the Supplier – when acting as credit broker – owed Mr and Mrs H a fiduciary duty. So, the remedies that might be available at law in relation to the payment of secret commission aren’t, in my view, available to them. And while it’s possible that the Lender failed to follow the regulatory guidance in place at the Times of Sale insofar as it was relevant to disclosing the commission arrangements between itself and the Supplier, I don’t think any such failure on the Lender’s part is itself a reason to uphold this complaint. Like Credit Agreement 2, the amount of commission paid by the Lender to the Supplier for arranging Credit Agreement 1 was not high. At £869.90, it was only 10% of the amount borrowed and even less than that (5.42%) as a proportion of the charge for credit. So for the same reasons as those I set out above in relation to Credit Agreement 2, I think Mr and Mrs H would still have taken out the loans to fund their purchases at the Times of Sale had there been more adequate disclosure of the commission arrangements that applied at those times.” In conclusion, given the facts and circumstances of this complaint, I did not think the Financial Ombudsman Service could consider Mr and Mrs H’s unfair credit relationship complaint relating to Credit Agreement 1. I thought this Service could consider the other

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parts of their complaint. But I did not think that the Lender acted unfairly or unreasonably when it dealt with their Section 75 claims, and I was not persuaded that the Lender was party to a credit relationship with them under Credit Agreement 2 that was unfair to them for the purposes of Section 140A of the CCA. And having taken everything into account, I saw no other reason why it would be fair or reasonable to direct the Lender to compensate them. I gave both parties the opportunity to respond to the PD. The PR responded stating it did not accept the PD, and it provided some further comments and evidence it wished to be considered. The Lender confirmed it accepted the PD. As the parties have now had the opportunity to respond to the PD, and having received the responses I mentioned above, I’m now finalising my decision on this complaint. 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 is not to address every single point which has been made to date, but to decide what’s fair and reasonable in the circumstances of this complaint. If I have not commented on, or referred to, something that either party has said, this does not mean I have not 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 relate to the issue of whether the credit relationship between Mr and Mrs H and the Lender was unfair. In particular, the PR has provided further comments in relation to whether Fractional Club membership was sold to them as an investment at the Times of Sale. As outlined in my PD, the PR originally raised various other points of complaint, all of which I addressed at that time. But it didn’t make any further comments in relation to those other points in its response to my PD. Indeed, it has not said it disagrees with any of my provisional conclusions in relation to those other points. And since I have not been provided with anything more in relation to those other points by either party, I see no reason to change my conclusions in relation to them as set out in my PD. So, I’ll focus here on the PR’s points raised in response. Section 140A of the CCA: did the Lender participate in an unfair credit relationship under Credit Agreement 2? The Supplier’s alleged breach of Regulation 14(3) of the Timeshare Regulations Included in the PR’s response to my PD was an oral hearing request along with the offer to produce sworn affidavits. Oral hearings are something that I can direct happen under DISP 3.5.5. However, the Financial Ombudsman Service is set up to decide complaints informally and it’s for me as the decision maker to determine what evidence I think I need to determine what is a fair and reasonable outcome to a complaint. Having considered

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everything, I do not think I need to hold an oral hearing to fairly determine this complaint. This is because both parties have already provided lengthy submissions. In this case, I have a statement from Mr and Mrs H, other evidence, including the documents from the sale, and full submissions from the PR and the Lender to decide what I think was most likely to have happened. I’m satisfied I’m able to weigh up what Mr and Mrs H have said against the available evidence and arguments to determine what I think happened on the balance of probabilities without the need for an oral hearing. And as it’s in everyone’s interest to resolve this complaint as soon as possible, to grant a hearing at such a late stage would inevitably prolong the resolution of this case. I understand the PR also offers to have Mr and Mrs H provide a sworn affidavit. But I must remind the PR that we don’t have strict evidential requirements. We aren’t expected to decide complaints only after receiving sworn evidence. And our jurisdiction is investigative rather than adversarial. I remain of the view that the information we have on file is enough to cover all the issues I need to consider to reach a fair decision. And as I’ve considered everything on file, including the specific points raised by the PR as part of its request, I’m of the view that a hearing request and/or sworn affidavits aren’t required. As I explained in my PD, although I found there was a possibility that the Supplier breached Regulation 14(3) at the Time of Sale of Purchase Agreement 2 and Credit Agreement 2, I did not think Mr and Mrs H’s statement gave a clear indication of what motivated them to go ahead with their purchase. Furthermore, it was not clear which of their recollections related to the Time of Sale in question considering they mentioned a number of different fractional timeshare purchases. And their recollections that reflected the context in which they made their purchase at the Time of Sale in question (their third purchase of a Fractional timeshare), indicated it was a need for more points to be able to book the holidays they wanted that motivated them to make the purchase. So, I wasn’t persuaded the evidence suggested Mr and Mrs H purchased Fractional Club membership in whole or in part down to any breach of Regulation 14(3). The PR argues Mr and Mrs H’s statement should lead me to uphold this complaint because, in summary: • Their statement clearly indicates they made their purchase at the Time of Sale in part because of what the Supplier told them about the investment element of Fractional Club membership. • Their statement provides a reliable account of the sales process they experienced given they originally produced the statement for a different representative, and it has remained unchanged. The same description of the sales process appears consistently across other documents the PR has provided to us, and this evidence is stronger than that provided in other cases that have been upheld by this Service. • The same statement was provided in another case referred to us by the PR on behalf of Mr H about an earlier purchase he made of a fractional timeshare, and that case was resolved in his favour. The Respondent accepted the Investigator's view that the complaint should be upheld because the Supplier’s breach of Regulation 14(3) was a material factor in his purchasing decision. I have thought carefully about what the PR has said, but its arguments do not persuade me to depart from my provisional conclusions. First and foremost, my decision is based on consideration of Mr and Mrs H’s specific circumstances in this case. Each complaint turns on its own facts; an ombudsman’s decision on how one timeshare sale occurred does not determine his, or any other ombudsman’s, decisions about the facts of other sales at

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different times and of different purchases. As such, I’m not bound by our Investigator's view on the other case the PR referred to us on behalf of Mr H. I acknowledge the PR’s comments about the reliability of Mr and Mrs H’s statement. However, to be clear, it’s not the case that I’m not persuaded they purchased Fractional Club membership in whole or in part down to any breach of Regulation 14(3) because I find their statement unreliable in the way the PR appears to be suggesting. Rather, as I explained above and in my PD, Mr and Mrs H's recollections in their statement about the investment element of Fractional Club membership do not reflect the relevant context to the purchase they made at the Time of Sale in question. Unlike their first purchase of a fractional timeshare (which I note was the subject of the other case the PR referred to us on behalf of Mr H which our Investigator upheld), at the Time of Sale for Purchase Agreement 2 and Credit Agreement 2, they were already Fractional Club members having purchased fractional points on two previous occasions. Given that context and what Mr and Mrs H clearly said about the purchase in question, the PR’s response to my PD does not offer a persuasive explanation for how their recollections about the investment element of Fractional Club membership relate to the Time of Sale in question, and make clear that the purchase in question was motivated by what they were told about the prospect of a financial gain from membership. The PR also says the fact Mr and Mrs H were interested in the holiday rights they obtained under Purchase Agreement 2 does not mean they could not have also been interested in a share in the Allocated Property under that agreement. I agree with the PR that Mr and Mrs H’s interest in the holiday rights of membership does not mean any breach of Regulation 14(3) by the Supplier could not necessarily have been material to their purchasing decision. But like I have said, as they themselves don’t persuade me that their purchase was motivated by their share in the Allocated Property and the possibility of a profit, I don’t think a breach of Regulation 14(3) by the Supplier was likely to have been material to the decision they ultimately made. 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 Mr and Mrs H’s purchasing decision in relation to Purchase Agreement 2 and Credit Agreement 2. Consequently, like I said before, even if the Supplier had marketed or sold Fractional Club membership as an investment in breach of Regulation 14(3) (which I still make no finding on here), I’m not persuaded Mr and Mrs H’s decision to make the purchase in question was motivated by the prospect of a financial gain. So, I still don’t think the credit relationship between Mr and Mrs H and the Lender under Credit Agreement 2 was unfair to them for this reason. Conclusion Given the facts and circumstances of this complaint, I do not think the Financial Ombudsman Service can consider Mr and Mrs H’s unfair credit relationship complaint relating to Credit Agreement 1. And while I think this Service can consider the other parts of their complaint, I do not think the Lender acted unfairly or unreasonably when it dealt with Mr and Mrs H’s Section 75 claims, and I’m not persuaded the Lender was party to a credit relationship with them under Credit Agreement 2 that was unfair to them for the purposes of Section 140A of the CCA. And having taken everything into account, I see no other reason why it would be fair or reasonable to direct the Lender to compensate them.

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My final decision For the reasons set out above, I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr and Mrs H to accept or reject my decision before 21 April 2026. Asa Burnett Ombudsman

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