Mitsubishi HC Capital UK Plc · DRN-5804255

The complaint Mr W’s complaint is, in essence, that Mitsubishi HC Capital UK Plc (the ‘Lender’) 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 claims under Section 75 of the CCA. Background to the complaint Mr W was a member of a timeshare provider (the ‘Supplier’) – having purchased a Trial Membership from it on 23 February 2011. 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 27 October 2011 (the ‘Time of Sale’). Alongside his wife Mrs W, he entered into an agreement with the Supplier to buy 747 fractional points at a cost of £9,090 (the ‘Purchase Agreement’). Fractional Club membership was asset backed – which meant it gave Mr and Mrs W more than just holiday rights. It also included a share in the net sale proceeds of a property named on the Purchase Agreement (the ‘Allocated Property’) after their membership term ends. Mr and Mrs W paid for their Fractional Club membership by taking finance of £11,254 from the Lender (the ‘Credit Agreement’) in Mr W’s name only, which also consolidated lending they had taken out to finance their Trial Membership purchase from the Supplier. As the only borrower named on the Credit Agreement, this complaint has been brought in Mr W’s name only. Mr W – using a professional representative (the ‘PR’) – wrote to the Lender on 12 June 2017 (the ‘Letter of Complaint’) to raise a number of different concerns. As those concerns have not changed since they were first raised, and as both sides are familiar with them, it’s not necessary to repeat them in detail here beyond the summary above. The Lender dealt with Mr W’s concerns as a complaint and issued its final response letter on 26 June 2017, rejecting it on every ground. The complaint was then referred to the Financial Ombudsman Service. It was assessed by an Investigator who, having considered the information on file, rejected the complaint on its merits. Mr W disagreed with the Investigator’s assessment and asked for an Ombudsman’s decision. So, the complaint was passed to me to decide. I considered the matter and issued a provisional decision (the ‘PD’) dated 21 August 2025. In that decision I explained my provisional findings (which form part of this final decision) were as follows:

-- 1 of 17 --

“Mr W’s Trial Membership purchase The complaint referred to this Service mentions Mr W’s purchase of a Trial Membership from the Supplier prior to his purchase of Fractional Club membership. It isn’t made clear in the PR’s submissions on Mr W’s behalf if the claims under the CCA and the complaint points raised relate to his Trial Membership purchase and the Credit Agreement he entered into to finance it. On my reading of the complaint, it appears the complaint only relates to Mr W’s purchase of Fractional Club membership, and in any event, I don’t think a complaint about his Trial Membership would succeed because: • Regarding Mr W’s claims under Section 140A of the CCA, Trial Membership did not include an interest in the sale proceeds of a property, and Mr W’s own testimony makes out none of the concerns raised in the complaint about the Lender’s decision to lend to him and pressure from the Supplier during the sale. • Mr W first notified the Lender of his Section 75 claim more than six years after the sale of the Trial Membership, so the Limitation Act 1980 would provide the Lender with a defence to the claim in Court. It wouldn’t therefore be unfair or unreasonable for the Lender to reject the claim. Therefore I do not propose to deal with the Trial Membership further, and the rest of this decision will only concern Mr W’s Fractional Club Membership purchase. Section 75 of the CCA: the Supplier’s misrepresentations at the Time of Sale The CCA introduced a regime of connected lender liability under Section 75 that affords consumers (“debtors”) a right of recourse against lenders that provide the finance for the acquisition of goods or services from third-party merchants (“suppliers”), in the event that there is an actionable misrepresentation and/or breach of contract by the supplier. Certain conditions must be met if the protection afforded to consumers is engaged, including, for instance, the cash price of the purchase and the nature of the arrangements between the parties involved in the transaction. The Lender doesn’t dispute that the relevant conditions are met. But for reasons I’ll come on to below, it isn’t necessary to make any formal findings on them here. It was said in the Letter of Complaint that Fractional Club membership had been misrepresented by the Supplier at the Time of Sale because Mr W was told or led to believe by the Supplier that Fractional Club membership: 1. Had a guaranteed end date when that was not true. 2. Was the only way of releasing himself from his existing membership when that was not true. As I understand it, the sale of the Allocated Property could be postponed in certain circumstances according to the Fractional Club Rules. But Mr W says little to nothing 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 isn’t enough evidence on file to support the PR’s allegation that Fractional Club membership had been misrepresented for the reason relating to point 2, I’m not persuaded that there were representations by the Supplier on the issues in question that constituted false statements of existing fact.

-- 2 of 17 --

So, while I recognise that Mr W 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 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 The PR says on Mr W’s behalf that the Supplier breached the Purchase Agreement because there is no guarantee that he will receive his share of the net sale proceeds of the Allocated Property. I understand they are saying that Mr W fears that, when the time comes for the Allocated Property to be sold, he will not receive his share of the sales proceeds. However, it would seem that any breach of contract (if that occurs) lies in the future and is currently uncertain. 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 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. The PR says, for instance, that: 1. The right checks weren’t carried out before the Lender lent to Mr W; 2. Mr W was pressured by the Supplier into purchasing Fractional Club membership at the Time of Sale; 3. Some of the terms of the Purchase Agreement were unfair contract terms; and 4. Fractional Club membership was marketed and sold as an investment in breach of a prohibition on doing so. However, having considered the entirety of the credit relationship between Mr W 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 of 17 --

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 W and the Lender. The Supplier’s sales & marketing practices at the Time of Sale 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 the PR says that the right affordability checks weren’t carried out at the Time of Sale, 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 W was actually unaffordable before also concluding that he lost out as a result, and then consider whether the credit relationship with the Lender was unfair to him for this reason. But from the information provided, I am not satisfied that the lending was unaffordable for Mr W. The PR also says that, because some of the terms of the Purchase Agreement weren’t individually negotiated, they were unfair contract terms as were the terms governing the ongoing costs of membership and consequences of non-payment. But I can’t see that any such terms were operated unfairly against Mr W in practice, nor that any such terms led him to behave in a certain way to his detriment. And with that being the case, I’m not persuaded that any of the terms governing Fractional Club membership are likely to have led to an unfairness that warrants a remedy even if they could be said to be unfair contract terms, which I make no formal finding on. I acknowledge that Mr W 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 their 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. In fact Mr W has said in a witness statement provided to us by the PR that he had previously declined an offer made to him by the Supplier to purchase Fractional Club membership, because he thought the cost was too high and it was not right for him. So he would have been aware at the Time of Sale that he could decline to make the purchase if he didn’t want to go ahead with it. Mr W was also given a 14-day cooling off period and he has not provided a credible explanation for why he did not cancel his membership 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 membership because his ability to exercise that choice was significantly impaired by pressure from the Supplier.

-- 4 of 17 --

Overall, therefore, I don’t think that Mr W’s credit relationship with the Lender 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 the Lender 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 the prohibition against selling timeshares in that way. The Supplier’s alleged breach of Regulation 14(3) of the Timeshare Regulations The Lender does not dispute, and I am satisfied, that Mr W’s Fractional Club membership met the definition of a “timeshare contract” and was a “regulated contract” for the purposes of the Timeshare Regulations. Regulation 14(3) of the Timeshare Regulations prohibited the Supplier from marketing or selling Fractional Club membership as an investment. This is what the provision said at the Time of Sale: “A trader must not market or sell a proposed timeshare contract or long-term holiday product contract as an investment if the proposed contract would be a regulated contract.” But the PR says that the Supplier did exactly that at the Time of Sale. The term “investment” is not defined in the Timeshare Regulations. But for the purposes of this provisional decision, and by reference to the decided authorities, an investment is a transaction in which money or other property is laid out in the expectation or hope of financial gain or profit. A share in the Allocated Property clearly constituted an investment as it offered Mr W the prospect of a financial return – whether or not, like all investments, that turned out to be 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 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 W 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. 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 W, 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.

-- 5 of 17 --

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 also possible that Fractional Club membership was marketed and sold to Mr W as an investment in breach of Regulation 14(3). However, whether or not there was a breach of the relevant prohibition by the Supplier is not ultimately determinative of the outcome in this complaint for reasons I will come on to shortly. And with that being the case, it’s not necessary to make a formal finding on that particular issue for the purposes of this decision. Was the credit relationship between the Lender and Mr W rendered unfair? Having found that it was possible that the Supplier breached Regulation 14(3) of the Timeshare Regulations at the Time of Sale, I now need to consider what impact that breach had on the fairness of the credit relationship between Mr W and the Lender under the Credit Agreement and related Purchase Agreement, as the case law on Section 140A makes it clear that regulatory breaches do not automatically create unfairness for the purposes of that provision. Such breaches and their consequences (if there are any) must be considered in the round, rather than in a narrow or technical way. Indeed, it seems to me that, if I am to conclude that a breach of Regulation 14(3) led to a credit relationship between Mr W and the Lender 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 W decided to go ahead with his purchase. The PR has said it’s clear from Mr W’s witness statement that Fractional Club membership was represented to him as an investment and that this was fundamental to the purchase. Mr W said in his witness statement that: “The sales technique clearly inferred that as well as using the resort for your designated timeslot(s) each year for a holiday, you would be able to sell your fractional ownership at the end of the period for financial gain, therefore implying it was also some form of investment opportunity.” (my emphasis added) Mr W then went on to say that he decided not to proceed with the Supplier’s offer, and that it was only after a further meeting with the Supplier’s sales representatives a few days later that he agreed to purchase Fractional Club membership. Of that meeting Mr W said: “[Sales representative] then offered us a different fractional deal – less points but for less money. We agreed to go back to the main sales area and did eventually sign up (after several hours and late into the evening) to become full members of [the Supplier] on a ‘fractional’ points basis (747 points per year) for 17 years. To entice us further we were given 1000 bonus points for the next year presented as a [Supplier] Vacation Certificate.”

-- 6 of 17 --

The allegation that the Supplier marketed and/or sold Fractional Club membership to Mr W as an investment in breach of Regulation 14(3) of the Timeshare Regulations was only raised by the PR on Mr W’s behalf after the judgment in Shawbrook & BPF v FOS1 and our Investigator’s assessment of the complaint. Mr W’s witness statement was also only provided to us at that time, and while it was enclosed with documents that were submitted to us when the complaint was referred to this Service, the statement itself is not dated or signed by Mr W. As such, there is clearly a possibility that the PR and Mr W’s submissions in relation to this point have been influenced by the judgment in Shawbrook & BPF v FOS, and our Investigator’s assessment of the complaint. Consequently, I cannot reasonably place any significant weight on the contents of these submissions. In any event, Mr W’s witness statement includes no details of what the Supplier told him that implied the sale of the Allocated Property would lead to a financial gain. Where he provided his recollections of the meetings with the Supplier leading up to and at the time he proceeded to purchase Fractional Club membership, he said little to nothing about the investment element of membership and/or its importance to him in his decision to make the purchase. Therefore, I am not persuaded by Mr W’s and the PR’s submissions that he was induced into purchasing Fractional Club membership by any statements made to him by the Supplier about the prospect of a financial gain or profit from it. 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 W himself doesn’t persuade me 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. On balance, therefore, even if the Supplier had marketed or sold the Fractional Club membership as an investment in breach of Regulation 14(3) of the Timeshare Regulations, I am not persuaded that Mr W’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 W and the Lender was unfair to him even if the Supplier had breached Regulation 14(3). I also indicated that I would provide my findings on the issue of commission once I knew more about that given the circumstances of Mr W’s complaint. I did that by email on 6 January 2026, saying: “The PR 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: Hopcraft, Johnson and Wrench. 1 R (on the application of Shawbrook Bank Ltd) v Financial Ombudsman Service Ltd and R (on the application of Clydesdale Financial Services Ltd (t/a Barclays Partner Finance)) v Financial Ombudsman Service [2023] EWHC 1069 (Admin) (‘Shawbrook & BPF v FOS’).

-- 7 of 17 --

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; 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 W in arguing that his credit relationship with the Lender 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 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 the commission arrangement between them gave the Supplier a choice over the interest rate that led Mr W into a credit agreement that cost disproportionately more than it otherwise could have.

-- 8 of 17 --

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 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 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 currently think any such failure is itself a reason to find the credit relationship in question was unfair to Mr W. In stark contrast to the facts of Mr Johnson’s case, the amount of commission paid by the Lender to the Supplier for arranging the Credit Agreement that Mr W entered into wasn’t high. At £1,153.54, it was only 10.25% of the amount borrowed and even less than that (5.61%) 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 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 at the Time of Sale 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 Agreement. And as it wasn’t acting as an agent of Mr W 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 the Lender were likely to have led to a sufficiently extreme inequality of knowledge that rendered the credit relationship 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 relationship between Mr W and the Lender 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.

-- 9 of 17 --

Commission: The alternative grounds of complaint While I’ve found that Mr W’s credit relationship with the Lender 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 W’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 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 without telling Mr W (i.e. secretly). And the second relates to the Lender’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 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 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. That’s 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.” So, in summary, I was not persuaded by any of the arguments put forward for why the credit relationship between Mr W and the Lender was unfair to him under Section 140A of the CCA. And I couldn’t see any other reason why it would be fair or reasonable to direct the Lender to compensate Mr W – all of which led me to provisionally conclude that there was no basis on which to uphold the complaint. The Lender didn’t respond to my provisional decision. The PR disagreed with my overall conclusion. When doing that, it provided significant submissions at first but it went on to withdraw them and replace them with more concise submissions – which, while primarily concerned with the suggestion that Mr W’s Fractional Club membership had been marketed and sold as an investment in contravention of a prohibition on selling timeshares in that way, included allegations of misrepresentation on the basis that he was told by the Supplier at the Time of Sale that: 1. He was buying part ownership of a physical property; 2. Fractional Club membership was an investment; 3. The Allocated Property would be sold; and 4. He would receive a share of the net sales proceeds of sale when the Allocated Property is sold that would amount to more than what he paid for membership. The PR also repeated its concerns about the pressure Mr W was put under by the Supplier at the Time of Sale, some of the terms of the Purchase Agreement being unfair, and payment of commission to the Supplier by the Lender – albeit with a focus on the Supreme Court’s judgment in Hopcraft, Johnson and Wrench. As a result, the complaint was passed back to me for further consideration and my Final Decision.

-- 10 of 17 --

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 that afresh, I’m not persuaded to depart from my PD for reasons I’ll now explain. Before I do, I want to make it clear that I recognise that this complaint, when originally made, was wide ranging and made on a number of different grounds - including: (1) Misrepresentations by the Supplier at the Time of Sale giving Mr W a claim against the Lender under Section 75 of the CCA, which the Lender failed to accept and pay. (2) A breach of contract by the Supplier giving Mr W a claim against the Lender under Section 75 of the CCA, which the Lender failed to accept and pay. (3) The Lender being party to an unfair credit relationship under the Credit Agreement and related Purchase Agreement for the purposes of Section 140A of the CCA. However, as the PR’s more concise response to my PD relates, in the main, to (3), as I haven’t been provided with new arguments and/or evidence to consider in relation to (1) and (2), I see no reason to change or add to my conclusions in relation to them as set out above. Similarly as the PR’s response raises no concerns about Mr W’s Trial Membership purchase which I commented on in my PD, I see no reason to change or add to my conclusions about that purchase as set out above. Indeed, as I said in my PD, my role as an Ombudsman is to decide what’s fair and reasonable in the circumstances of this complaint – rather than address every single point that’s been made. And with that being the case, while I have read all of the PR’s submissions in full, if I have not commented on, or referred to, something that either party has said, that does not mean I have not considered it. What’s more, it‘s important to make the point that, in contrast to what might happen in court, neither side to this complaint has a burden of proof that it must discharge. After all, the jurisdiction under which I’m deciding this complaint is inquisitorial rather than adversarial – which means that my findings are made, on the balance of probabilities, in light of the evidence and/or arguments from both sides. So, while the PR argues in response to my PD that, under Section 140B(9) of the CCA, it’s for the Lender to prove that its credit relationship with Mr W wasn’t unfair simply because he alleges that it was, that fails to understand that the Financial Ombudsman Service deals with complaints rather than causes of action. And, in any event, to suggest that unsubstantiated allegations of fact must be disproved by the Lender if the credit relationship is not to be deemed unfair also oversimplifies if not misunderstands the legal position. As HHJ David Cooke said in paragraph 26 of his judgment on Promontoria (Henrico) Ltd v. Gurcharn Samra [2019] EWHC 2327 (Ch):

-- 11 of 17 --

“…the onus is on [the creditor] to show, to the normal civil standard, that the relationship is not unfair because of any of the reasons set out in s 140A(1)(a)-(c). Whether it is so unfair is a matter for the court's overall judgment having regard to all the relevant circumstances and matters, including matters relating (i.e. personal) to the creditor and debtor. This onus on the claimant does not however mean, in my judgement…that where [the borrower alleging an unfair credit relationship] makes allegations of fact on which he relies he does not have the burden of proving them to the normal civil standard. The onus placed on the creditor is as to the relationship between it and the debtor, and does not have the effect that factual allegations made by Mr Samra must be accepted unless they can be positively disproved by contrary evidence.”2 The legal and regulatory context The legal and regulatory context that I think is relevant to this complaint has been shared in several hundred published decisions on very similar complaints, as well as in previous correspondence with the parties. So, there’s no need for me to set this out again in detail here. I simply remind the parties that our rules3 say that in considering what’s fair and reasonable in all the circumstances of the complaint, I will take into account: relevant (i) law and regulations; (ii) regulators’ rules, guidance and standards; and (iii) codes of practice; and (when appropriate), what I consider to have been good industry practice at the relevant time. Section 75 of the CCA: the Supplier’s misrepresentations at the Time of Sale It was argued by the PR, when this complaint was first made, that the Supplier misrepresented Fractional Club membership at the Time of the Sale. The reasons for this aspect of this complaint at that time were addressed in my PD decision, and I see no reason to change or add to them. But in response to my PD, the PR argues that the absence of standard conveyancing documents, and the impossibility of Fractional Club membership holding a sufficiently high value, meant the following representations were misrepresentations: 1. Mr W was buying part ownership of a physical property; 2. Fractional Club membership was an investment; 3. The Allocated Property would be sold; and 4. He would receive a share of the net sales proceeds of sale when the Allocated Property is sold that would amount to more than what he paid for membership. The PR takes that view because it says the evidence suggests that (1) any rights in the Allocated Property are personal rights rather than rights of ownership, (2) the Lender has not provided any evidence that the Allocated Property exists or that it will be sold in the future (making it unlikely that Mr W will receive anything from his share in it) and, (3) by the PR’s own calculations, given the initial and ongoing costs of Fractional Club membership, it was never possible to make a profit from the sale of the Allocated Property. 2 As approved by the Supreme Court in Smith v. The Royal Bank of Scotland plc [2023] UKSC 34 – see paragraph 40. 3 Specifically Rule 3.6.4 in the Dispute Resolution Rules found in the Financial Conduct Authority’s Handbook for Rules and Guidance.

-- 12 of 17 --

The law relating to misrepresentation is a combination of the common law, equity and statute – though, as I understand it, the Misrepresentation Act 1967 didn’t alter the rules as to what constitutes an effective misrepresentation. Summarising the relevant pages in Chitty on Contracts, a material and actionable misrepresentation is an untrue statement of existing fact or law made by one party (or his agent for the purposes of passing on the representation, acting within the scope of his authority) to another party that induced that party to enter into a contract. However, a mere statement of opinion, rather than fact or law, which proves to be unfounded, is not a misrepresentation unless the opinion amounts to a statement of fact and it can be proved that the person who gave it did not hold it or could not reasonably have held it. It also needs to be shown that the other party understood and relied on the implied factual misrepresentation. Telling prospective members that they were investing their money because they were buying a fraction or share of one of the Supplier’s properties was not untrue – nor was it untrue to tell prospective members that they would receive some money when the allocated property is sold. After all, Mr W’s share in the Allocated Property clearly constituted an investment as it offered him the prospect of a financial return – whether or not, like all investments, that turned out to be more than what he first put into it. But as the PR knows, while the term “investment” is not defined in the Timeshare Regulations, it was agreed by the parties in Shawbrook & BPF v FOS that, by reference to the decided authorities, “an investment is a transaction in which money or other property is laid out in the expectation or hope of financial gain or profit” (see paragraph 56). Yet, contrary to what the PR says, none of the contractual paperwork made any promises that a profit might be made. The PR argues that Mr W’s Fractional Rights Certificate, for instance, made a clear and unambiguous “investment promise” because it indicated that, upon the sale of the Allocated Property, he would receive a 1/52nd share of the net sales proceeds. However, nowhere did the Certificate imply let alone suggest that share would be worth more in real terms in the future than at the Time of Sale. As I said in my PD, the Supplier’s training material left open the possibility that the sales representative(s) may have positioned Fractional Club membership as an investment. So, I accept it’s possible that Fractional Club membership was marketed and sold to Mr W as an investment orally. Mr W says little about what was said, by whom and in what circumstances for the purposes of determining whether representations by the Supplier amounted to false statements of existing fact rather than expressions of honestly held opinions about the likely value of the Allocated Property in the future. And while the PR’s own calculations might cast some doubt over the likelihood of the Allocated Property being sold at a profit given the initial and ongoing costs of it to Mr W, there is not enough evidence to persuade me the relevant sales representative(s) would have carried out that sort of calculation at the Time of Sale, or would otherwise have had information that would indicate they knew or ought reasonably to have known at the time that any such representations weren’t true. And while the PR might question the exact legal mechanism used to give prospective members an interest in allocated properties, that does not change the fact that the shares of members (like Mr W) were clearly the purchase of a share of the net sale proceeds of a specific property in a specific resort.

-- 13 of 17 --

Therefore I’m not persuaded by the allegations of misrepresentation from the PR. And with that being the case, they too aren’t reasons to uphold this complaint and direct the Lender to compensate Mr W. Section 140A of the CCA: did the Lender participate in an unfair credit relationship? I’ve already explained why, in light of the PR’s latest allegations of misrepresentation, I’m not persuaded Fractional Club membership was actionably misrepresented by the Supplier at the Time of Sale. And it’s for those reasons that I don’t think the credit relationship between Mr W and the Lender was rendered unfair to him on the basis that membership had been misrepresented. However, there are, of course, other reasons for why the PR argues the credit relationship in question was unfair. But having reconsidered the entirety of that relationship along with everything that has now been said and/or provided by both sides, I still don’t think the credit relationship between Mr W and the Lender was likely to have been rendered unfair to him for the purposes of Section 140A. When coming to that conclusion, I have looked again 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 also reconsidered any commercial (including commission) arrangements between the Lender and the Supplier at the Time of Sale and the disclosure of those arrangements. The PR continues to argue that some of the terms of the Purchase Agreement were unfair to Mr W, and that he was pressured by the Supplier into purchasing Fractional Club membership at the Time of Sale. However, as neither the PR nor Mr W have submitted any new evidence to further either of these arguments, it’s for the same reasons I gave in my PD that I don’t think either of them render his credit relationship with the Lender unfair to him for the purposes of Section 140A. But I’ll turn now to what continues to be the main reason for the PR’s assertion that the credit relationship in question was unfair. The Supplier’s alleged breach of Regulation 14(3) of the Timeshare Regulations As I said in my PD, there is competing evidence in this complaint as to whether the 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. I acknowledged it was possible that Fractional Club membership was marketed and sold to Mr W as an investment in breach of Regulation 14(3). A view I still hold.

-- 14 of 17 --

But I also thought and still think that it’s not necessary to make a formal finding on that particular issue for the purposes of my determination on this complaint, because a breach of Regulation 14(3) by the Supplier is not itself determinative of the outcome in this complaint unless the impact of such a breach suggested otherwise. The PR disagrees with that and cites the judgment of Mrs Justice Collins Rice in Shawbrook & BPF v FOS in support – saying that she found that the selling of a timeshare as an investment (i.e. in a breach of Regulation 14(3) of the Timeshare Regulations) was, itself, sufficient to create an unfair credit relationship. However, on my reading of Shawbrook & BPF v FOS, Mrs Justice Collins Rice didn’t find that a breach of Regulation 14(3) of the Timeshare Regulations was "causative of the legal relations entered into". She recognised that such a breach was "conduct that knocks away the central consumer protection safeguard", but she went on to say that it was the ombudsmen behind the two reviewed decisions who found that such a breach was, given the facts and circumstances of the relevant complaints, causative of the consumers in question purchasing their timeshares and taking out loans to do so. What’s more, the Supreme Court’s judgment in Plevin makes it clear that regulatory breaches do not automatically create unfairness for the purposes of Section 140A. Such breaches and their consequences (if there are any) must be considered in the round, rather than in a narrow or technical way. I’m also mindful of what HHJ Waksman QC (as he then was) and HHJ Worster had to say in Carney v NM Rothschild & Sons Ltd [2018] EWHC 958 (‘Carney’) and Kerrigan v Elevate Credit International Ltd [2020] EWHC 2169 (Comm) (‘Kerrigan’) (respectively) on causation. In Carney, HHJ Waksman QC said the following in paragraph 51: “[…] In cases of wrong advice and misrepresentation, it would be odd if any relief could be considered if they did not have at least some material impact on the debtor when deciding whether or not to enter the agreement. […] in a case like the one before me, if in fact the debtors would have entered into the agreement in any event, this must surely count against a finding of unfair relationship under s140A. […]” And in Kerrigan, HHJ Worster said this in paragraphs 213 and 214: “[…] The terms of section 140A(1) CCA do not impose a requirement of “causation” in the sense that the debtor must show that a breach caused a loss for an award of substantial damages to be made. The focus is on the unfairness of the relationship, and the court's approach to the granting of relief is informed by that, rather than by a demonstration that a particular act caused a particular loss. Section 140A(1) provides only that the court may make an order if it determines that the relationship is unfair to the debtor. […] […] There is a link between (i) the failings of the creditor which lead to the unfairness in the relationship, (ii) the unfairness itself, and (iii) the relief. It is not to be analysed in the sort of linear terms which arise when considering causation proper. The court is to have regard to all the relevant circumstances when determining whether the relationship is unfair, and the same sort of approach applies when considering what relief is required to remedy that unfairness. […]”

-- 15 of 17 --

So, it still seems to me that, if I’m to conclude that a breach of Regulation 14(3) led to a credit relationship between Mr W and the Lender 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. Indeed, doing that accords with common sense, for if events would have unfolded in the same way whether or not such a pre-contractual breach had occurred, it would be difficult to attribute any particular importance to the breach when deciding whether an unfair debtor- creditor relationship ensued, or whether a remedy is appropriate. If there had been a breach of Regulation 14(3), would it have rendered the credit relationship between Mr W and the Lender unfair to him? Having found it was possible that the Supplier breached Regulation 14(3) of the Timeshare Regulations at the Time of Sale, I have considered (as I did in my PD) what impact that breach (if there was one) had on the fairness of the credit relationship between Mr W and the Lender under the Credit Agreement and related Purchase Agreement. The PR’s response to my PD did not challenge the reasons I set out in that decision (and set out above) for why I was not persuaded Mr W’s purchase was motivated by his share in the Allocated Property and the possibility of a profit, which meant I didn’t think a breach of Regulation 14(3) by the Supplier was likely to have been material to the decision he ultimately made. With that in mind, and having reconsidered the evidence before me, I see no reason to add to my conclusions in relation to them. So for those reasons, on balance, I still don’t think the credit relationship between Mr W and the Lender 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 As I’ve already said, I set out my thoughts in relation to the implications of the Supreme Court’s judgment in Hopcraft, Johnson and Wrench for this complaint on 6 January 2026. I remain satisfied that the Lender has provided me with sufficient information to reach a conclusion about its commercial (including commission) arrangements with the Supplier. I’ve seen nothing in this case that leads me to think that the information in question is inaccurate. I recognise that the PR might disagree with the thoughts I shared on 6 January 2026. In particular, its point of view appears to be based on its belief that the commission paid to the Supplier by the Lender was funded out of the credit advanced to Mr W, rather than from the total cost (i.e. interest and fees) of the credit, the upshot of which was that Mr W also had to pay compound interest on the commission. But the PR has not offered any evidence to substantiate its belief the commission payment was funded in that way in this case, and it does not appear that it was possible the commission payment was funded in that way given everything I have seen about the relevant arrangements. The PR has also not offered any evidence and/or arguments that lead me to think that (1) the factors referenced by the Supreme Court have a bearing on the outcome of this complaint given its circumstances or (2) there are any other reasons why the commercial (including commission) arrangements between the Supplier and the Lender rendered the credit relationship between the latter and Mr W under the Credit Agreement and related Purchase Agreement unfair for the purposes of Section 140A.

-- 16 of 17 --

Conclusion Having adopted my provisional findings, and reconsidered the facts and circumstances of this complaint, I still I don’t think the Lender acted unfairly or unreasonably when it dealt with Mr W’s Section 75 claims. I’m still not persuaded that the Lender was party to a credit relationship with Mr W that was 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 for me to direct the Lender to compensate Mr W. 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 W to accept or reject my decision before 24 April 2026. Asa Burnett Ombudsman

-- 17 of 17 --