DRN-6318895

The complaint Mr W’s complaint is, in essence, that Mitsubishi HC Capital UK Plc trading as Novuna Personal Finance (the ‘Lender’) acted unfairly and unreasonably by (1) being party to unfair credit relationships with him 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. What happened Mr W was the member of a timeshare provider (the ‘Supplier’) – having purchased a number of products from it over time, as below: • Trial membership in March 2017 for £3,995 • 800 fractional points in August 2017 for £15,492 (‘Purchase Agreement 1’) – having traded in his trial membership • 1,180 fractional points in January 2018 for £6,920 – having traded in the first lot of 800 fractional points. (‘Purchase Agreement 2’) • 1,750 fractional points in August 2019 for £9,800 – having traded in the second lot of 1,180 fractional points. (‘Purchase Agreement 3’) (which, when appropriate, I’ll simply refer to as the ‘’Purchase Agreements’) Please note, only Purchase Agreement 1 and Purchase Agreement 3 form part of my decision as it were only these purchases that were funded by the Lender. As this complaint is concerned with the purchases in August 2017 and August 2019, those are the ‘Times of Sale’ for the purposes of my decision. Mr W paid for his fractional points by taking the following amounts of finance from the Lender: • £15,179 in August 2017 (‘Credit Agreement 1’). This included an amount to pay some outstanding finance relating to Mr W’s initial trial membership. • £9,800 in August 2019 (‘Credit Agreement 2’) (which, when appropriate, I’ll simply refer to as the ‘’Credit Agreements’) Whilst the Purchase Agreements were in joint names, Mr W is the only eligible claimant (and complainant) under the Credit Agreements. For that reason, I shall refer to Mr W only throughout this decision. Fractional Club membership was asset backed – which meant it gave Mr W more than just holiday rights. It also included a share in the net sale proceeds of a property named on the relevant purchase agreement (which I’ll refer to as the ‘Allocated Property 1 and 3’ or, when appropriate, the ‘Allocated Properties’) after his membership terms ends. Mr W – using a professional representative (the ‘PR’) – wrote separately to the Lender on 6 March 2023 in relation to both purchases (the ‘Letter of Complaints’) to raise a number of different concerns. As those concerns haven’t changed since they were first raised, and as

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both sides are familiar with them, it isn’t necessary to repeat them in detail here beyond the summary above. The Lender dealt with Mr W’s concerns about Purchase Agreement 3 as a complaint and issued its final response letter on 2 June 2023, rejecting it on every ground. Unhappy with its response, the complaint was referred to the Financial Ombudsman Service. It was assessed by an Investigator who thought that the Supplier had marketed and sold Fractional Club memberships as investments to Mr W at the Times 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 decisions, the Investigator concluded that the credit relationships between the Lender and Mr W were rendered unfair to him for the purposes of Section 140A of the CCA. The Lender disagreed with the Investigator’s assessment. The case was arranged 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 27 March 2026. In that decision, I said: “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 times. 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: 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 times: • 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 My provisional findings I have considered all the available evidence and arguments to decide what is fair and

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reasonable in the circumstances of this complaint. And having done that, I do not currently think this complaint should be upheld. I understand this is likely to come as a disappointment to Mr W, but I hope he understands my reasons for reaching my decision. 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 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 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 Complaints that Fractional Club memberships had been misrepresented by the Supplier at the Times of Sale because Mr W was: (1) told by the Supplier that Fractional Club memberships had a guaranteed end date when that was not true. (2) told by the Supplier that Fractional Club memberships were 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 Properties could be postponed in certain circumstances according to the Fractional Club Rules, Mr W says little to nothing to persuade me that he was given a guarantee by the Supplier that the Allocated Properties 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 at the relevant times. So, while I recognise that Mr W and the PR have concerns about the way in which Fractional Club memberships were 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 were. 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

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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 Agreements, the Lender is also liable. Mr W says that he 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 Agreements. 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 Mr W states that the availability of holidays was/is subject to demand. It also looks like he made use of his fractional points to holiday on a number of occasions. I accept that he may not have been able to take certain holidays. But I have not seen enough to persuade me that the Supplier had breached the terms of the Purchase Agreements. The PR also says on Mr W behalf that the Supplier breached the Purchase Agreements because it went into liquidation. And if certain parts of the Supplier’s business were put into administration, I can understand why the PR is alleging that there was a breach of the Purchase Agreement as a result. However, neither Mr W nor the PR have said, suggested or provided evidence to demonstrate that he is no longer: 1. a member of the Fractional Club; 2. able to use his Fractional Club membership to holiday in the same way he could initially; and 3. entitled to a share in the net sales proceeds of the Allocated Property when his Fractional Club membership ends. So, from the evidence I have seen, I do not think the Lender is liable to pay Mr W 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 unfair credit relationships? I’ve already explained why I’m not persuaded that Fractional Club memberships were actionably misrepresented by the Supplier at the Times 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 relationships between Mr W and the Lender along with all of the circumstances of the complaint, I don’t think the credit relationships between them were 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 Times of Sale along with any relevant training material; 2. The provision of information by the Supplier at the Times 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 Times of Sale; 4. The inherent probabilities of the sale given its circumstances; and, when relevant

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5. Any existing unfairness from a related credit agreements. I have then considered the impact of these on the fairness of the credit relationships between Mr W and the Lender. The Supplier’s sales & marketing practices at the Times of Sale Mr W’s complaint about the Lender being party to unfair credit relationships were 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 W; and 2. Mr W was pressured by the Supplier into purchasing Fractional Club memberships at the Times 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 the Lender on both occasions 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 in August 2017 and August 2019 (and I make no such finding), I would have to be satisfied that the money lent to Mr W was actually unaffordable, before also concluding that he lost out as a result, and then consider whether the credit relationships with the Lender were unfair to him for this reason. But from the information provided, I am not satisfied that the lending was unaffordable for Mr W on either occasion. I acknowledge that Mr W may have felt weary after sales processes that went on for a long time. But he says little about what was said and/or done by the Supplier during his sales presentations that made him feel as if he had no choice but to purchase Fractional Club memberships when he simply did not want to. He was also given 14-day cooling off periods and he has not provided a credible explanation for why he did not cancel his memberships during that time. And with all of that being the case, there is insufficient evidence to demonstrate that Mr W made the decision to purchase Fractional Club memberships because his ability to exercise that choice was significantly impaired by pressure from the Supplier. Overall, therefore, I don’t think that Mr W’s credit relationships with the Lender were 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 now says the credit relationships with the Lender were unfair to him. And that’s the suggestion that Fractional Club memberships were marketed and sold to him as investments in breach of prohibition against selling timeshares in that way. The Supplier’s alleged breaches of Regulation 14(3) of the Timeshare Regulations A share in the Allocated Properties clearly constituted an investment as it offered Mr W 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 memberships 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.

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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 memberships were marketed or sold to Mr W as investments 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 memberships to him as investments, i.e. told him or led him to believe that Fractional Club memberships 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 memberships were marketed and/or sold by the Supplier at the Times of Sale as investments 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 Clubs as an ‘investment’ or quantifying to prospective purchasers, such as Mr W, the financial value of their share in the net sales proceeds of the Allocated Properties 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 memberships as investments. So, I accept that it’s equally possible that Fractional Club memberships were marketed and sold to Mr W as investments 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 relationships between the Lender and Mr W have been rendered unfair to him had there been a breach of Regulation 14(3) of the Timeshare Regulations? Having found that it was possible that the Supplier breached Regulation 14(3) of the Timeshare Regulations at the Times of Sale, I now need to consider what impact the breaches (if there were any) had on the fairness of the credit relationships between Mr W and the Lender under the Credit Agreements and related Purchase Agreements, 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 credit relationships between Mr W and the Lender that were 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 sand the Credit Agreements is an important consideration. To help me decide this point, I’ve carefully considered what Mr W has said in the course of his complaint about how the memberships were sold to him and his motivation for taking them out. But on my reading of the evidence before me, the prospect of a financial gain from Fractional Club memberships were not an important and motivating factor when Mr W decided to go ahead with his purchases. And I’ll explain why.

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It is said within the Letter of Complaints that Mr W was told that he had purchased investments from which he would receive a financial gain. There is no further detail underpinning these statement within the Letter of Complaints. But as I have said, I accept that it is possible that the Supplier positioned Fractional Club memberships as investments but what I need to establish is whether such positioning was material to Mr W’s decisions to purchase the memberships. And for the reasons I’ll come on to, I’m not persuaded it was. The PR has provided a statement from Mr W containing his recollections from his entire relationship with the Supplier. He says: “On […] we purchased 800 Fractional Points with [the Supplier]. We were on holiday, using our trial membership and we met with the sales team. We were told that if we upgraded to a Fractional membership, we would be able to access priority booking and access availability at the resorts. We were told that the Fractional scheme could be passed onto our children, or we could wait until 2030 we would sell the property and we could receive a return from our shares. […] On […] we purchased 1180 Fractional Points with [Supplier’s] Fractional Owners Club. We were on holiday and we met with the sales team to discuss the membership that we had. The sales team were very persuasive and we were shown different resorts and apartments, showing us the highest standard of apartments. We feel as though we were already on the ladder so we may as well upgrade and pay extra, to provide us with a lot more for our money. We would access larger discounts and access more availability. This would also provide us with a larger return from the property share, as we would now own a larger share and larger investment. […] On […] we purchased 1715 [sic] Fractional points with [the Supplier]. We were on holiday and we were invited to meet with the sales team, to discuss our membership. We were told that we should make an additional purchase, to improve the financial return on our investment and bring us to 2 free holidays and more free upgrades. We were also told that this would bring us to the top of the membership ladder. This was a very persuasive sales pitch so we thought that we might as well agree. After I made the last purchase, I was quite happy with what I received as the representatives sorted out any problems that I had. However, I have now realised that the availability is not as flexible as I thought that it would be. The standard of accommodation is also not has high as I had expected being such a high up member. My main concern with the contract is that I will be paying this product off for a long time. I do not want to be paying for something that I am not getting what I want. I now do not want to burden my children with this, if something happens to me. We ultimately no longer feel that we have the product that we originally purchased. Due to this, we have stopped paying maintenance fees for the product.” Having carefully considered what Mr W has said here, I’m not entirely convinced Mr W has himself said that he would make a profit as a result of his Fractional Club memberships. Mr W says when he initially purchased his Fractional Club membership in August 2017, he was told he could receive a return from his shares. No further detail has been given as to what Mr W was told about the return he was expecting to receive. Indeed, as a result of this purchase, Mr W was entitled to receive a 2% share in the net sale proceeds of the property named on Purchase Agreement 1. So, in my opinion, Mr W

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has merely provided a factual description of how the Fractional Club membership and the eventual sale of the Allocated Property worked. When Mr W purchased his third Fractional Club membership in August 2019, he says he was told that would improve the financial return on his investment. Mr W hasn’t provided any further detail about what the level of financial return he was expecting to receive. But taking his whole testimony into consideration, Mr W was expecting to receive a return from his share in the Allocated Property when he initially upgraded in 2017 so when he upgraded in 2018, and said he would now receive a larger return as he owned a larger share of an Allocated Property – I’m minded to agree with him. As a result of this purchase, Mr W’s share in an Allocated Property did increase to 3% - compared to 2% as a result of his previous purchase. Later, in 2019, Mr W upgraded and purchased 1,750 points, a considerable amount more than what he had. Mr W says he was told it would improve the financial return on his investment. Mr W has again provided, in my opinion, a largely factual description of how the Fractional Club membership works, in that he would receive a proportion of the sales proceeds of the Allocated Property based on the share he held. By purchasing more points and increasing his share – this would ultimately increase the level of potential return he would receive. Mr W has not said or suggested that the Supplier led him to believe that his Fractional memberships would lead to a financial gain (i.e., a profit) and there is nothing that makes me think any promotion of the memberships as investments were integral to his decisions to take them out. In my opinion, his testimony is mainly centred around the holiday benefits his memberships offered. So, I don’t think the prospect of a financial gain from his memberships, if they were promoted in such a way, were material to his decision to ahead with his purchases. That doesn’t mean he wasn’t interested in a share in the Allocated Properties. After all, that wouldn’t be surprising given the nature of the products at the centre of this complaint. But as Mr W himself doesn’t persuade me that his purchases were motivated by his share in the Allocated Properties and the possibility of a profit, I don’t think breaches of Regulation 14(3) by the Supplier was likely to have been material to the decisions he ultimately made. On balance, therefore, even if the Supplier had marketed or sold the Fractional Club memberships as investments in breach of Regulation 14(3) of the Timeshare Regulations, I am not persuaded that Mr W’s decision to purchase Fractional Club memberships at the Times of Sale were 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 purchases whether or not there had been breaches of Regulation 14(3). And for that reason, I do not think the credit relationships between Mr W and the Lender were unfair to him even if the Supplier had breached Regulation 14(3). The provision of information by the Supplier at the Times of Sale The PR says that Mr W was not given sufficient information at the Times 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 Times 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.

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So, while I acknowledge that it is also possible that the Supplier did not give Mr W 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 W nor the PR have persuaded me that he was deprived of information that would have led him to make different purchasing decisions at the Times 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 that led to unfair credit relationships as a result. The PR also says that payments of commission from the Lender to the Supplier at the Times of Sale should lead me to uphold this complaint because, simply put, information in relation to that payment went undisclosed at the Times 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 arrangements 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’).

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But I don’t think Hopcraft, Johnson and Wrench assists Mr W in arguing that his credit relationships with the Lender were unfair to him for reasons relating to commission given the facts and circumstances of this complaint. As the Supreme Court said in paragraph 326 of its judgment in Hopcraft, Johnson and Wrench, it’s not possible to simply apply the reasoning of the Supreme Court in Plevin v Paragon Personal Finance Ltd [2014] UKSC 61 (‘Plevin’) to this complaint (as the PR does) when it’s concerned with a product and marketplace that were very different to those in Plevin. What’s more, Mr W was provided with information as to the price of Fractional Club memberships and the cost of the Credit Agreements (interest rate, fees, APR and monthly repayments). So, he was at least in a position from which he could understand the cost of the Credit Agreements and compare it with other options that might have been available at the Times of Sale. I haven’t seen anything to suggest that the Lender and Supplier were tied to one another contractually or commercially in a way that wasn’t properly disclosed to Mr W, nor have I seen anything that persuades me that the commission arrangements between them gave the Supplier a choice over the interest rate that led Mr W into credit agreements that cost disproportionately more than it otherwise could have. I acknowledge that it’s possible that the Lender and the Supplier failed to follow the regulatory guidance in place at the Times 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 were 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 Times 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 relationships in question unfair to Mr W. In stark contrast to the facts of Mr Johnson’s case, from my understanding of how the Supplier worked at the Times of Sale, the amount of commission paid by the Lender would not have been no more than 2.5% in August 2017. What’s more, when Mr W upgraded his membership in August 2019, as I understand it, the Lender didn’t pay the Supplier any commission at that time. So, had Mr W known in August 2017, that the Supplier was going to be paid a flat rate of commission at such a low 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 W 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 in August 2017 had the amount of commission been disclosed. What’s more, based on what I’ve seen so far, the Supplier’s role as a credit broker wasn’t a separate service and distinct from its role as the seller of timeshares. It was simply a means to an end in the Supplier’s overall pursuit of a successful timeshare sale. I can’t see that the Supplier gave an undertaking – either expressly or impliedly – to put to one side its commercial interests in pursuit of that goal when arranging the Credit Agreements. And as it wasn’t acting as an agent of Mr W but as the supplier of

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contractual rights he obtained under the Purchase Agreements, 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 Agreements and thus a fiduciary duty. Overall, therefore, I’m not currently persuaded that the commission arrangements between the Supplier and the Lender were likely to have led to a sufficiently extreme inequality of knowledge that rendered the credit relationships unfair to Mr W. 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 relationships between Mr W and the Lender under the Credit Agreements and related Purchase Agreements were 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 W’s credit relationships with the Lender weren’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 W’s complaint about unfair credit relationships. So, for completeness, I’ve considered those grounds on that basis here. The first ground relates to whether the Lender is liable for the dishonest assistance of a breach of fiduciary duty by the Supplier because it took a payment of commission from the Lender in August 2017 without telling Mr W (i.e., secretly). And the second relates to the Lender’s compliance with the regulatory guidance in place at that time 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 W 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 the Lender failed to follow the regulatory guidance in place at the time Mr W purchased his first Fractional Club membership as it was relevant to disclosing the commission arrangements between it and the Supplier, I don’t think any such failure on the Lender’s part is itself a reason to uphold this complaint because, for the reasons I also set out above, I think he would still have taken out this loan to fund his purchase in August 2017 had there been more adequate disclosure of the commission arrangements that applied at that time. Overall 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 Mr W’s Section 75 claims, and I am not persuaded that the Lender was party to credit relationships with him under the Credit Agreements and related Purchase Agreements that were unfair to him 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 him.” The Lender responded to the PD and accepted it. The PR also responded – they did not accept the PD and provided some further comments and evidence they wish to be considered.

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Having received the relevant responses from both parties, I’m now finalising my decision. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Following the responses from both parties, I’ve considered the case afresh and having done so, I’ve reached the same decision as that which I outlined in my provisional findings, for broadly the same reasons. 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 relationships between Mr W and the Lender were unfair. In particular, the PR has provided further comments in relation to whether the memberships were sold to Mr W as investments at the Times of Sale. It also provided some further comments about the pressurised sales environments. As outlined in my PD, the PR also originally raised various other points of complaint, all of which I addressed at that time. But they didn’t make any further comments in relation to those in their response to my PD. Indeed, they haven’t said they disagree with any of my provisional conclusions in relation to those other points. And since I haven’t been provided with anything more in relation to those other points by either party, I see no reason to change my conclusions in relation to them as set out in my PD. So, I’ll focus here on the PR’s points raised in response. Section 140A of the CCA: did the Lender participate in an unfair credit relationships? The Supplier’s alleged breaches of Regulation 14(3) of the Timeshare Regulations As I explained in my PD, although I found there was a possibility that the Supplier breached Regulation 14(3) at the Times of Sale, I didn’t think that Mr W’s testimony suggested that the hope or expectation of the purchase being a profitable investment was material to his purchasing decisions. So, I wasn’t persuaded that the evidence suggested that Mr W purchased Fractional Club memberships in whole or in part down to any breaches of Regulation 14(3). In response to my PD, the PR says that I had treated the 2017 and 2019 in isolation and the failure to take into account Mr W’s experiences across his relationship with the Supplier undermines the conclusions I’ve reached. Within my PD, I set out what Mr W said about his entire relationship with the Supplier. I would like to reassure the PR that I’ve considered what Mr W has said in full when reaching my conclusions on this case. When Mr W purchased his first fractional membership, insofar as is relevant to the matter I’m considering here, Mr W says: “We were told that the Fractional scheme could be passed onto our children, or we could wait until 2030 we would sell the property and we could receive a return from our shares.”

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In respect of the sale in 2019, Mr W says: “We were told that we should make an additional purchase, to improve the financial return on our investment and bring us to 2 free holidays and more free upgrades. We were also told that this would bring us to the top of the membership ladder. This was a very persuasive sales pitch so we thought that we might as well agree.” Although Mr W mentioned the word ‘return’ and that by upgrading it would improve the financial return of his investment, his statement overall simply lacks colour and context needed to convince me that breaches of Regulation 14(3) were material to his purchasing decisions. Other that what Mr W said, no further detail has been given about what the Supplier specifically said about the investment element of his memberships nor does his statement provide me with any insight as to what motivated him to purchase them. So I accept there is a possibility that the Supplier breached Regulation 14(3) at the Times of Sale but I need to be persuaded, by what Mr W says, that he was materially motivated by the prospect of a financial gain to be able to uphold this complaint. Nothing in what he’s said gives me a clear indication of the reasons why he bought Fractional Club memberships. So given the circumstances of this complaint, I am not persuaded by Mr W’s and the PR’s submissions that he was induced into purchasing Fractional Club memberships by any statements made to him by the Supplier about the prospect of a financial gain or profit from them. The PR says that the Ombudsman has accepted less detailed and more general accounts of investment based selling as sufficient so they are concerned that a higher and inconsistent evidential threshold has been applied in this case. But my decision is based on consideration of Mr W’s specific circumstances. Each complaint turns on its own facts; my decision on how one timeshare sale occurred doesn’t determine a decision about the facts of other sales at different times. So, ultimately, for the above reasons, along with those I already explained in my PD, I remain unpersuaded that any breaches of Regulation 14(3) were material to Mr W’s purchasing decisions. So, as I said before, even if the Supplier had marketed or sold the memberships as investments in breach of Regulation 14(3) (which I still make no finding on here), I’m not persuaded Mr W’s decisions to make the purchases were motivated by the prospect of a financial gain. So, I still don’t think the credit relationships between Mr W and the Lender were unfair to him for this reason. Pressure In response to my PD, the PR says my decision does not engage with: • The impact of time-limited pricing; • The structure and duration of the sales process; or • The inherent pressure created by such an environment. When considering if the credit relationships between Mr W and the Lender were likely to have been rendered unfair, I considered the Supplier’s sales and marketing practices at the Times of Sale within my PD. Although the PR continues to argue that Mr W was pressured by the Supplier into purchasing Fractional Club memberships at the Times of Sale, neither the PR or Mr W have provided any new evidence to support this. As I said in my PD, Mr W says little about what was said and/or done by the Supplier that made him feel as though he

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had no choice to go ahead with his purchases. So, I’m simply not persuaded that his choice was taken away from him as a result of the Supplier’s actions. I accept the PR’s comment that a 14-day cooling off period does not negate the pressure alleged by the Supplier at the Times of Sale. But there’s still no explanation as to why Mr W didn’t cancel his membership during the cooling off periods if he felt compelled to purchase on both occasions due to the pressure imposed by the Supplier. So, as I said in my PD, there is insufficient evidence to demonstrate that Mr W made the decision to purchase Fractional Club memberships as his choice was significantly impaired by pressure from the Supplier. 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 Mr W’s Section 75 claims, and I am not persuaded that the Lender was party to credit relationships with him under the Credit Agreement that were unfair to him 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 him. My final decision For the reasons set out above, I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr W to accept or reject my decision before 25 May 2026. Sameena Ali Ombudsman

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