DRN-6312983

The complaint Mr B’s complaint is, in essence, that Clydesdale Financial Services Limited trading as Barclays Partner Finance (‘BPF’) acted unfairly and unreasonably by (1) being party to an unfair credit relationship with him 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. Background to the complaint Mr B was the member 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 his membership of a timeshare that I’ll call the ‘Fractional Club’ – which he bought on 5 November 2014 (the ‘Time of Sale’). He entered into an agreement with the Supplier to buy 11,000 fractional points at a cost of £6,600 (the ‘Purchase Agreement’). Fractional Club membership was asset backed – which meant it gave Mr B more than just holiday rights. It also included a share in the net sale proceeds of a property named on the Purchase Agreement (the ‘Allocated Property’) after his membership term ends. Mr B paid for his Fractional Club membership by taking finance of £6,600 from BPF (the ‘Credit Agreement’). Mr B – using a professional representative (the ‘PR’) – wrote to BPF on 10 November 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. As BPF didn’t respond to Mr B’s concerns, he referred the matter to the Financial Ombudsman Service. It was assessed by an Investigator who, having considered the information on file, recommended that the complaint be upheld. In summary, the Investigator thought that the Supplier had marketed and sold Fractional Club membership as an investment to Mr B at the Time of Sale in breach of Regulation 14(3) of the Timeshare, Holiday Products, Resale and Exchange Contracts Regulations 2010 (the ‘Timeshare Regulations’). And given the impact of that breach on his purchasing decision, the Investigator considered that the credit relationship between BPF and Mr B was rendered unfair to him for the purposes of Section 140A of the CCA. BPF disagreed with the Investigator’s assessment and asked for an Ombudsman’s decision, so it was passed to me. I considered the matter and issued a provisional decision (the ‘PD’). 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 As both sides may already know, a claim against BPF under Section 75 essentially mirrors the claim Mr B could make against the Supplier. However, I do not think Mr B has raised his claim in time for BPF to consider it. The Limitation Act 1980 sets out limitation periods, or time limits, for bringing various types of legal claim. For a claim based on contract, it’s not generally possible to start court action more than six years after the cause of action arose. If a claim is brought too late, the respondent is likely to have a complete defence to the claim on that basis. For claims relating to misrepresentation, the time limit would typically be six years from the date the claimant suffers damage as a result of the misrepresentation. For example, entering into a contract – and incurring liabilities – when they would otherwise not have done. Mr B’s claim under Section 75 is that but for the Supplier’s various alleged misrepresentations, he wouldn’t have entered into the Purchase Agreement (and, therefore, the Credit Agreement). So it is the date on which he entered into those agreements that his cause of action arose, meaning he had six years from that date within which to bring this claim. Mr B entered into the Purchase Agreement and Credit Agreement on 5 November 2014. He raised his claim under Section 75 within the Letter of Complaint dated 10 November 2021 – more than six years later. That being the case, I don’t think there is any basis on which I could reasonably require BPF to take any action in response to this element of Mr B’s claim. However, I have later considered whether these alleged misrepresentations could have been something that caused an unfair credit relationship. Section 75 of the CCA: the Supplier’s Breach of Contract Within the Letter of Complaint, it was also said that Mr B could not holiday where and when he wanted to – which, on my reading of the complaint, suggests that the Supplier was not living up to its end of the bargain, potentially breaching the Purchase Agreement. Given that such a breach could have occurred within the six years preceding the complaint being raised, I do not think it is time-barred in the same way as the claim above. That said, I am not persuaded that it should succeed. 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 signed by Mr B states that the availability of holidays was subject to demand. It also looks like he made use of his fractional points to holiday on a number of occasions. And he hasn’t provided details of any particular holidays that he believes his membership ought to have entitled him but that he was unable to access. So while I accept that Mr B may not have been able to take certain holidays, I have not seen enough to persuade me that this amounted to a breach of the terms of the Purchase

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Agreement by the Supplier. So again, I do not think there is any basis on which I could reasonably require BPF to take any further action in response to Mr B’s claim under Section 75. Section 140A of the CCA: did BPF 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 Mr B and BPF 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. 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, when relevant 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 Mr B and BPF. The Supplier’s sales & marketing practices at the Time of Sale Mr B’s complaint about BPF being party to an unfair credit relationship was and is made for several reasons. I have firstly considered whether the misrepresentations he alleges were made by the Supplier in the context of Mr B’s Section 75 claim could have caused any unfairness for the purposes of Section 140A. It was said in the Letter of Complaint that Fractional Club membership had been misrepresented by the Supplier at the Time of Sale because Mr B 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. 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 B doesn’t say

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anything to persuade me that he was given a guarantee by the Supplier that the Allocated Property 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. So, while I recognise that Mr B and the PR have concerns about the way in which Fractional Club membership was sold by the Supplier, I’m not persuaded that there was any misrepresentation giving rise to an unfairness within his credit relationship with BPF. Turning to the points specifically raised by the PR in the Letter of Complaint about the potential unfairness of Mr B’s credit relationship with BPF, I note that it says: 1. the right checks weren’t carried out before BPF lent to Mr B; and 2. Mr B was pressured by the Supplier into purchasing Fractional Club membership at the Time of Sale. 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 BPF given this complaint’s circumstances. But even if I were to find that BPF 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 B was actually unaffordable, before also concluding that he lost out as a result, and then consider whether the credit relationship with BPF was unfair to him for this reason. But from the information provided, I am not persuaded that the lending was unaffordable for Mr B. I acknowledge that Mr B may have felt weary after a sales process that went on for a long time. But he says little about what was said and/or done by the Supplier during his sales presentation that made him feel as if he had no choice but to purchase Fractional Club membership when he simply did not want to. He was also given a 14- day cooling off period and he has not provided a credible explanation for why he did not cancel the membership during that time. And with all of that being the case, there is insufficient evidence to demonstrate that Mr B made the decision to purchase Fractional Club membership because his ability to exercise that choice was significantly impaired by pressure from the Supplier. Overall, therefore, I don’t think that Mr B’s credit relationship with BPF was rendered unfair to him under Section 140A for any of the reasons above. But there is another reason, perhaps the main reason, why the PR says the credit relationship with BPF was unfair to him. And that’s the suggestion that Fractional Club membership was marketed and sold to him as an investment in breach of prohibition against selling timeshares in that way. The Supplier’s alleged breach of Regulation 14(3) of the Timeshare Regulations A share in the Allocated Property clearly constituted an investment as it offered Mr B the prospect of a financial return – whether or not, like all investments, that was more than what he 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

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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 B as an investment in breach of Regulation 14(3), I have to be persuaded that it was more likely than not that the Supplier marketed and/or sold membership to him as an investment, i.e. told him or led him to believe that Fractional Club membership offered him 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. 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 Mr B, the financial value of their share in the net sales proceeds of the Allocated Property along with the investment considerations, risks and rewards attached to them. But 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 Mr B as an investment in breach of Regulation 14(3). However, whether or not there was a breach of the relevant prohibition by the Supplier is not ultimately determinative of the outcome in this complaint for reasons I will come on to shortly. And with that being the case, it’s not necessary to make a formal finding on that particular issue for the purposes of this decision. Was the credit relationship between BPF and the Consumer rendered unfair? Having found that it was possible that the Supplier breached Regulation 14(3) of the Timeshare Regulations at the Time of Sale, I now need to consider what impact that breach (if there was one) had on the fairness of the credit relationship between Mr B and BPF 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 Mr B and BPF that was unfair to him and warranted relief as a result, whether the Supplier’s breach of Regulation 14(3) led him 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 Mr B decided to go ahead with his purchase. That doesn’t mean he 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 Mr B himself doesn’t persuade me

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that his purchase was motivated by his 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 he ultimately made. In reaching this view, I’ve carefully considered what Mr B has said in the course of his complaint about how the membership was sold to him and his motivation for purchasing it. I would note first of all that the evidence in this respect is quite limited. Within the Letter of Complaint, as mentioned above, it was said that Mr B was told he was investing in a fraction of a property that, when sold, he could expect to see a profit from. There was no further detail underpinning these statements within the Letter of Complaint, which are rather generic in nature. In fact, such assertions are made in an identical fashion by the PR in a number of other complaints. When referring the complaint to us, the PR included a statement in Mr B’s own words that included his recollections of the Time of Sale (alongside those of his previous and subsequent purchases from the Supplier). With regard to the sale at the centre of this complaint, Mr B’s comments are brief. In all, he says: “On 5th November 2014 we purchased fractional points with [the Supplier]. The sales team sold it to us as an investment opportunity with a profit payable in future years. The loan of £6600 was arranged with Barclays Partner Finance by [the Supplier].” Mr B’s comments about the sale in question are lacking any meaningful detail as to either what the Supplier said or how it presented the membership as an opportunity to make a profit, or how this appealed to Mr B such that it was a material factor in his decision to proceed with the purchase. While understandable given the length of time that passed between the Time of Sale and the statement being made, Mr B’s comments are ultimately not enough for me to place such weight on them as would be required to uphold the complaint – particularly when considered alongside the broader circumstances of the sale. In that regard, I have borne in mind that there were other evident motivating factors in Mr B’s decision to purchase the membership in question. In particular, he acquired an additional 11,000 points on top of his existing holding with the Supplier. He went on to utilise that new points balance in the years that followed – taking holidays that he would not otherwise have been able to, were it not for this purchase. On a related note, I understand that Mr B’s revised points holding moved him into a higher tier of membership (the Supplier’s “gold” level), giving him access to other benefits too. While not made with explicit reference to the sale in question, I note within Mr B’s statement that he remarks favourably on the extras to which higher level membership afforded him access. I also note that Mr B already held a fractional club membership with the Supplier at the Time of Sale. So he was, in effect, increasing his investment through the purchase in question, and therefore the level of potential return he could expect. But he does not refer to this increase in his investment as a factor in his decision-making within his statement, as I might expect him to have done had this been of significance to him when making the purchase. 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

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Regulations, I am not persuaded that Mr B’s decision to purchase Fractional Club membership at the Time of Sale was motivated by the prospect of a financial gain (i.e., a profit). On the contrary, I think the evidence suggests he would have pressed ahead with his 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 B and BPF was unfair to him 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 Mr B was not given sufficient information at the Time of Sale by the Supplier in order to make an informed choice. It isn’t 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. So, while I acknowledge that it is also possible that the Supplier did not give Mr B 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 B nor the PR have persuaded me that he was deprived of information that would have led him 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 a financial loss. The PR also says that a payment of commission from BPF 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.

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The Supreme Court also confirmed that the following factors, in what was a non- exhaustive list, will normally be relevant when assessing whether a credit relationship was/is unfair under Section 140A of the CCA: 1. The size of the commission as a proportion of the charge for credit; 2. The way in which commission is calculated (a discretionary commission arrangement, for example, may lead to higher interest rates); 3. The characteristics of the consumer; 4. The extent of any disclosure and the manner of that disclosure (which, insofar as Section 56 of the CCA is engaged, includes any disclosure by a supplier when acting as a broker); and 5. Compliance with the regulatory rules. From my reading of the Supreme Court’s judgment in Hopcraft, Johnson and Wrench, it sets out principles which apply to credit brokers other than car dealer–credit brokers. So, when considering allegations of undisclosed payments of commission like the one in this complaint, Hopcraft, Johnson and Wrench is relevant law that I’m required to consider under Rule 3.6.4 of the Financial Conduct Authority’s Dispute Resolution Rules (‘DISP’). But I don’t think Hopcraft, Johnson and Wrench assists Mr B in arguing that his credit relationship with BPF was unfair to him for reasons relating to commission given the facts and circumstances of this complaint. I haven’t seen anything to suggest that BPF and Supplier were tied to one another contractually or commercially in a way that wasn’t properly disclosed to Mr B, nor have I seen anything that persuades me that the commission arrangement between them gave the Supplier a choice over the interest rate that led Mr B into a credit agreement that cost disproportionately more than it otherwise could have. I acknowledge that it’s possible that BPF and the Supplier failed to follow the regulatory guidance in place at the Time of Sale insofar as it was relevant to disclosing the commission arrangements between them. But as I’ve said before, the case law on Section 140A makes it clear that regulatory breaches do not automatically create unfairness for the purposes of that provision. Such breaches and their consequences (if there are any) must be considered in the round, rather than in a narrow or technical way. And with that being the case, it isn’t necessary to make a formal finding on that because, even if BPF and the Supplier failed to follow the relevant regulatory guidance at the Time of Sale, it is for the reasons set out below that I don’t currently think any such failure is itself a reason to find the credit relationship in question unfair to Mr B. In stark contrast to the facts of Mr Johnson’s case, the amount of commission paid by BPF to the Supplier for arranging the Credit Agreement that Mr B entered into wasn’t high. At £145.20, it was only 2.2% of the amount borrowed and 2.9% as a proportion of the charge for credit. So, had he known at the Time of Sale that the Supplier was going to be paid a flat rate of commission at that level, I’m not currently persuaded that he either wouldn’t have understood that or would have otherwise questioned the size of the payment at that time. After all, Mr B wanted Fractional Club membership and had no obvious means of his own to pay for it. And at such a low level, the impact of commission on the cost of the credit he needed for a timeshare he wanted doesn’t strike me as disproportionate. So, I think he would still have taken out the loan to fund his 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 so far, the Supplier’s role as a credit broker wasn’t a separate service and distinct from its role as the seller of timeshares. It was simply a means to an end in the Supplier’s overall pursuit of a successful timeshare sale. I can’t see that the Supplier gave an undertaking – either expressly or impliedly – to put to one side its commercial interests in pursuit of that goal when arranging the Credit Agreement. And as it wasn’t acting as an agent of Mr B but as the supplier of contractual rights he obtained under the Purchase Agreement, the transaction doesn’t strike me as one with features that suggest the Supplier had an obligation of ‘loyalty’ to him when arranging the Credit Agreement and thus a fiduciary duty. Overall, therefore, I’m not currently persuaded that the commission arrangements between the Supplier and BPF were likely to have led to a sufficiently extreme inequality of knowledge that rendered the credit relationship unfair to Mr B. Section 140A: Conclusion Given all of the factors I’ve looked at in this part of my decision, and having taken all of them into account, I’m not persuaded that the credit relationship between Mr B and BPF under the Credit Agreement and related Purchase Agreement was unfair to him. And as things currently stand, I don’t think it would be fair or reasonable that I uphold this complaint on that basis. Commission: The Alternative Grounds of Complaint While I’ve found that Mr B’s credit relationship with BPF wasn’t unfair to him 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 B’s complaint about an unfair credit relationship. So, for completeness, I’ve considered those grounds on that basis here. The first ground relates to whether BPF is liable for the dishonest assistance of a breach of fiduciary duty by the Supplier because it took a payment of commission from BPF without telling Mr B (i.e., secretly). And the second relates to BPF’s compliance with the regulatory guidance in place at the Time of Sale insofar as it was relevant to disclosing the commission arrangements between them. However, for the reasons I set out above, I’m not persuaded that the Supplier – when acting as credit broker – owed Mr B a fiduciary duty. So, the remedies that might be available at law in relation to the payment of secret commission aren’t, in my view, available to him. And while it’s possible that BPF failed to follow the regulatory guidance in place at the Time of Sale insofar as it was relevant to disclosing the commission arrangements between it and the Supplier, I don’t think any such failure on BPF’s part is itself a reason to uphold this complaint because, for the reasons I also set out above, I think he would still have taken out the loan to fund his purchase at the Time of Sale had there been more adequate disclosure of the commission arrangements that applied at that time. 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 CONSUMER’S Section 75 claim(s), and I was not persuaded that the Lender was party to a credit relationship with him/her/them under the Credit Agreement that was unfair to him/her/them 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 him/her/them.

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Both parties responded to confirm their receipt of my PD and that they had nothing further to add. Having received the parties’ responses, 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 no different to that shared in several hundred ombudsman decisions on very similar complaints. And with that being the case, it is not necessary to set it out here. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Having done so, and with neither party having sent me any further information or evidence to consider, I see no reason to reach a different conclusion from that of my PD. So this final decision simply confirms my provisional findings, as set out above. My final decision For the reasons I’ve explained, I don’t uphold their complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr B to accept or reject my decision before 25 May 2026. Ben Jennings Ombudsman

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