Shawbrook Bank Limited · DRN-6263259

The complaint Mr and Mrs C say Shawbrook Bank Limited (‘Shawbrook’) has unfairly declined their claim under section 75 of the Consumer Credit Act 1974 (‘CCA’). And they say their creditor- debtor relationship with Shawbrook was unfair to them under section 140A of the CCA. What happened On 20 May 2016, Mr and Mrs C purchased a ‘trial membership’ from a timeshare provider (the ‘Supplier’). It included the right to reserve 5 weeks’ accommodation (and a bonus week) to be used within 36 months. It cost £3,995 and Mr and Mrs C borrowed the full amount from Shawbrook to pay for it. On 15 September 2016, Mr and Mrs C purchased a timeshare membership – which I’ll call ‘Fractional Club membership’ – from the Supplier. The membership was assed backed – which means it gave Mr and Mrs C more than just holiday rights. It included a share of the net sale proceeds of a property named on the purchase agreement (the ‘Allocated Property’) after the membership term ended. It cost £17,388. Mr and Mrs C received a ‘trade-in’ value of £3,995 for their trial membership, which left £13,393 to pay. They borrowed the full amount from Shawbrook to pay it. In November 2019, Mr and Mrs C – using a professional representative (‘PR’) – wrote to Shawbrook (the ‘Letter of Claim’) to make a claim under sections 75 and 140A of the CCA. Specifically, the Letter of Claim said: • The way the Supplier sold the Fractional Club membership to Mr and Mrs C was prohibited by the Timeshare, Holiday Products, Resale and Exchange Contracts Regulations 2010 (the ‘Timeshare Regulations’). • The Supplier misrepresented the Fractional Club membership by saying: it is ‘highly marketable and therefore can easily be re-sold’; that Mr and Mrs C are ‘investing in holidays and beating inflation’; ‘the resort was exclusive to timeshare owners’; and, ‘[Mr and Mrs C] would have access to perks, such as the use of airport lounges’. • The sales process was ‘aggressive and impeded [Mr and Mr C’s] freedom of choice’. • Mr and Mrs C weren’t given sufficient time to read the paperwork. • The Supplier didn’t ‘adhere’ to the Resort Development Organisation (‘RDO’) Code of Ethics. • Specific terms are unfair by reference to the Unfair Terms in Consumer Contracts Regulations 1999. The PR also requested details of any commission paid by Shawbrook to the Supplier. Shawbrook dealt with the Letter of Claim as a complaint and issued its final response letter on 6 January 2020. It rejected the complaint on every ground. Mr and Mrs C’s PR then referred the complaint to our service. One of our investigators rejected the complaint on its merits.

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The PR asked that an ombudsman make a final decision. I issued a provisional decision on 16 March 2026, which explained why I didn’t intend to uphold this complaint. It included the following provisional findings: Trial Membership While the PR has complained about the sale of the trial membership, the Letter of Claim is principally focused on the Fractional Club membership. Regarding the trial membership, the PR complains that the Supplier didn’t adequately explain to Mr and Mrs C that they’d been invited to a sales event, it told Mr and Mrs C that it was a ‘one-time’ offer, and it put ‘strong pressure’ on them to buy the trial membership. The Supplier says it made it ‘very clear’ both orally and in writing that Mr and Mrs C ‘would be invited to attend a presentation on the products that [it] had to offer in order to claim their vouchers and holiday’. And the Supplier says it wasn’t offered as a ‘one-time’ offer, that Mr and Mrs C had a statutory 14-day cooling off period in any event, and that contemporaneous notes from the day of purchase say Mr and Mrs C were ‘happy to proceed’ because they were ‘impressed with the standard they had seen’. The PR has provided a questionnaire that it says it completed ‘with’ Mr and/or Mrs C. The answer to the question, ‘What caused you to attend the event?’, is: ‘They were offering £75 worth of Amazon vouchers just to attend the presentation.’ The answer to the question, ‘Did you feel pressured to signing the agreement? If so how?’, is: ‘Yes, they said we need to sign up today otherwise we would miss the opportunity and wouldn’t get the free holiday if you signed up that day, you also had to attend another presentation while on holiday.’ Mr and/or Mrs C’s evidence doesn’t support the PR’s allegation that they didn’t know what sort of event they’d been invited too, and it doesn’t, in my opinion, suggest the Supplier otherwise did something wrong or improper. It follows that I don’t think it was unfair for Shawbrook to rejected Mr and Mrs C’s claim under section 75 or 140A for the trial membership. Fractional Club Membership Section 75 Section 75 of the CCA protects consumers who buy goods and services on credit. It says, if certain conditions are met, that the finance provider is legally answerable for any misrepresentation or breach of contract by the supplier. In the Letter of Claim, the PR says the Supplier misrepresented the Fractional Club membership by saying: it is ‘highly marketable and therefore can easily be re-sold’; that Mr and Mrs C are ‘investing in holidays and beating inflation’; ‘the resort was exclusive to timeshare owners’; and, ‘[Mr and Mrs C] would have access to perks, such as the use of airport lounges’. I’ll address the allegation that the Supplier sold the Fractional Club membership as an

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investment below. I’ll address the others in turn. At no point in the questionnaire provided, do Mr and/or Mrs C say they were told the Fractional Club membership was ‘highly marketable and therefore can easily be re-sold’. As the PR hasn’t provided any other evidence to support this allegation, I don’t accept that the membership was misrepresented in this way. Second, I accept that Mr and/or Mrs C say: ‘The holiday we were to believe was exclusive only to members’. But they don’t say why they believed this – they don’t say what was said or by whom, and they make this comment in relation to the trial membership. They also refer to ‘holiday’ (singular). The Supplier says ‘the [Fractional Club membership] is exclusive however clients are never told the resorts are’. Depending on what’s said, I’m not sure it’s fair to expect consumers to make that distinction. But on the evidence available to me, I’m not persuaded I can safely say the Supplier told Mr and Mrs C that the resorts were exclusive to timeshare members. Finally, the Supplier says Mr and Mrs C had access to airport lounges with a complimentary membership of another holiday scheme. The PR hasn’t provided any evidence to show they didn’t. Based on what I’ve seen so far, I’m not persuaded that there was a misrepresentation or breach of contract by the Supplier for which Shawbrook is legally answerable. It follows that I don’t think it was unfair for Shawbrook to decline the claim under section 75. Section 140A Section 140A says a court may make an order if it thinks the relationship between a creditor and a debtor is unfair to the debtor. It’s deliberately framed in wide terms, and a finding of unfairness can flow from something done on the creditor’s behalf in connection with a ‘related agreement’. Here, the purchase agreement is a ‘related agreement’. And, by virtue of section 56 of the CCA, Shawbrook is legally answerable for the Supplier’s actions. Having considered the entirety of the relationship, I don’t think it was unfair for the purposes of section 140A. In reaching this conclusion, I’ve considered: (1) The standard of the Supplier’s commercial conduct, which includes its sales and marketing practices at the time of sale, and any relevant training material. (2) The information provided by the Supplier at the time of sale, including the contracts and any disclaimers made by the Supplier. (3) The commission arrangements between Shawbrook and the Supplier at the time of sale and the disclosure of those arrangements. (4) All the evidence provided by both parties on what was supposedly said and/or done at the time of sale. (5) The inherent probabilities of what’s likely to have happened given the circumstances of the sale. The Supplier’s sales and marketing practices at the time of sale There are several reasons why Mr and Mrs C say their creditor-debtor relationship with Shawbrook was unfair to them. The PR says the sales process was ‘aggressive and impeded [Mr and Mr C’s] freedom of choice’. In particular, it says the sales process lasted ‘most of the day’, and Mr and Mrs C were tired and their 3-year old son was tired, hungry and ‘distressed’. And it says they weren’t allowed to leave to feed him. That doesn’t quite reflect the answers provided in the

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questionnaire: Mr and/or Mrs C say their child was a ‘constant distraction’ and when they said they wanted to leave to feed him, the Supplier said it would get him a sandwich ‘but [they] had to stay otherwise [they] would miss the opportunity’. Obviously, I don’t know what was said or done, or the context in which it was said or done. I appreciate that Mr and Mrs C may have felt weary after a sales process that went on for a long time, and I can appreciate that it may have been very challenging with a very small child. However, the Supplier says that after Mr and Mrs C attended the presentation on 13 September 2016, when they chose to purchase Fractional Club membership, Mr C spoke to their ‘compliance officer’ on 15 September 2016 to request a larger fraction, and it is this purchase they completed (and which this complaint concerns). What’s more, Mr and Mrs C were given a 14-day cooling off period, which they say they were told about in the questionnaire, and they don’t say why they didn’t cancel the membership during that time. In the circumstances, I’ve seen insufficient evidence to conclude that Mr and Mrs C made the decision to purchase Fractional Club membership because their ability to exercise choice was significantly impaired by pressure from the Supplier. Similarly, even if Mr and Mrs C weren’t given sufficient time to read the paperwork on 13 September 2016, I’m satisfied that they had sufficient time to read it before they chose to amend their purchase on 15 September 2016. The PR also says that there are some unfair contract terms in the purchase agreement. However, it hasn’t provided any evidence to show that a particular term or terms were operated unfairly against them or led them to behave in a way that was to their detriment. I’m therefore not persuaded that any of the terms governing the Fractional Club membership are likely to have led to an unfairness that warrants a remedy. Overall, therefore, I don’t think that Mr and Mrs C’s credit relationship with Shawbrook was rendered unfair to them under section 140A for any of the reasons above. However, the PR also says the membership was sold as an investment, which would be a breach of Regulation 14(3) of the Timeshare Regulations, and may render the relationship unfair under section 140A. The Supplier’s alleged breach of Regulation 14(3) of the Timeshare Regulations I’m satisfied that the Fractional Club membership meets the definition of a ‘timeshare contract’ and is a ‘regulated contract’ for the purposes of the Timeshare Regulations. Regulation 14(3) of the Timeshare Regulations says a supplier must not market or sell a proposed timeshare contract as an investment. The term ‘investment’ isn’t defined in the Timeshare Regulations. But I’ll adopt the same definition that was used in R (on the application of Shawbrook Bank Ltd) v Financial Ombudsman Service Ltd [2023] EWHC 1069 (Admin) (‘Shawbrook v Financial Ombudsman Service’), which says it’s a transaction in which money or other property is laid out in the expectation or hope of financial gain or profit. The Fractional Club membership clearly included an investment component in that Mr and Mrs C’s share of the proceeds of the deferred sale offered the prospect of a financial return – whether or not, like all investments, that return was more, less or the same as the sum invested. But it’s important to note that the fact that the Fractional Club membership included an investment component did not, in itself, transgress the prohibition in Regulation 14(3). Regulation 14(3) prohibits the marketing or selling of a timeshare contract as an investment. It doesn’t prohibit the existence of an investment component in a timeshare contract or the marketing and/or selling of such a contract per se. In other words, the Timeshare

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Regulations didn’t ban products like the Fractional Club – they simply regulated how they were marketed and sold. To conclude, therefore, that the Fractional Club membership was marketed or sold to Mr and Mrs C as an investment in breach of Regulation 14(3), I must be persuaded that it was more likely than not that the Supplier marketed and/or sold membership to them as an investment, i.e. told them or led them to believe that Fractional Club membership offered them the prospect of a financial gain (i.e., a profit) given the facts and circumstances of this complaint. There is competing evidence in this complaint as to whether the Fractional Club membership was marketed and/or sold by the Supplier as an investment in breach of Regulation 14(3). On the one hand, it’s clear that the Supplier made efforts to avoid specifically describing membership of the Fractional Club as an ‘investment’ or quantifying to prospective members, such as Mr and Mrs C, the financial value of their share in the net sales proceeds of the Allocated Property, along with the investment considerations, like the associated risk and reward. 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 and Mrs C as an investment in breach of Regulation 14(3). However, whether there was a breach of the relevant prohibition by the Supplier is not ultimately determinative of the outcome for this complaint for reasons I’ll explain, so it’s not necessary for me to make a formal finding on this particular issue. Would the credit relationship between Shawbrook and Mr and Mrs C have been rendered unfair to them had there been a breach of Regulation 14(3) of the Timeshare Regulations? As I think it’s possible the Supplier breached Regulation 14(3) at the time of sale, I now need to decide what impact it might have had on the fairness of the relationship between Ms U and Shawbrook. I say this because in Plevin v Paragon Personal Finance Ltd [2014] UKSC 61 (‘Plevin’), the Supreme Court said: ‘Section 140A […] does not impose any obligation and is not concerned with the question whether the creditor or anyone else is in breach of a duty. It is concerned with the question whether the creditor’s relationship with the debtor was unfair.’ What this means is that a breach of Regulation 14(3) doesn’t automatically mean the credit relationship is unfair 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. For me to conclude that a breach of Regulation 14(3) led to an unfair relationship, I need to see sufficient evidence to conclude, on the balance of probabilities, that the prospect of a financial gain was an important and motivating factor for Mr and Mrs C when they decided to purchase the membership. Based on what I’ve seen so far, I can’t say it was. I appreciate that Mr and/or Mrs C say they were told ‘get back all the money put into the holidays and maybe more depending on the sales prices then’ and, ‘[the Supplier] said that at the end of the term we could sell it and either get what we put in so effectively getting all our holidays paid back or we could get more, if the property prices have gone up’. But from this, I don’t think the prospect of a financial gain from Fractional Club membership was an important and motivating factor when Mr and Mrs C decided to purchase it. Indeed, the

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thrust of their testimony – which I’ve taken from the questionnaire – is that they purchased the membership for holiday rights and because they felt somewhat overwhelmed. That’s not to say that Mr and Mrs C weren’t interested in their share of the Allocated Property. After all, that would be surprising given the nature of the product at the centre of this complaint. But while they mention the possibility of a profit, what they say doesn’t persuade me that it was an important or motivating factor for them. On balance, therefore, I don’t think the credit relationship between Mr and Mrs C and Shawbrook was unfair to them even if the Supplier breached Regulation 14(3). The information provided by the Supplier at the Time of Sale The PR says Mr and Mrs C weren’t given sufficient information at the time of sale by the Supplier – although it hasn’t particularised in what way they weren’t given sufficient information. I accept it’s possible that the Supplier didn’t give Mr and Mrs C sufficient information, in good time. But Mr and Mrs C haven’t persuaded me that they wouldn’t have purchased Fractional Club membership if they’d been given more information about it, or otherwise persuaded me that the relationship was unfair because of the information the Supplier did or did not disclose. Finally, I note that the PR requested details of any commission paid by Shawbrook to the Supplier. Shawbrook has confirmed that it didn’t pay the Supplier any commission, so there’s no way the credit relationship was rendered unfair for this reason. Section 140A conclusion Given all the factors I’ve looked at in this part of my decision, and having taken them all into account, I’m not persuaded that the credit relationship between Mr and Mrs C and Shawbrook was unfair to them. And as things currently stand, I don’t think it would be fair to uphold this complaint on that basis. Overall conclusion In conclusion, given the facts and circumstances of this complaint, I don’t think Shawbrook acted unfairly when it declined Mr and Mrs C’s section 75 claim. And I’m not persuaded that Shawbrook was party to a credit relationship with them under the credit agreement and related purchase agreement that was unfair to them for the purposes of Section 140A of the CCA. And having taken everything into account, I see no other reason why it would be fair to direct Shawbrook to compensate Mr and Mrs C. Shawbrook has confirmed receipt of my provisional decision and says it has nothing to add. The PR hasn’t responded at all. I’m now finalising my decision. The legal and regulatory context When considering what is, in my opinion, fair and reasonable in all the circumstances of the complaint, I’m required by DISP 3.6.3R of the Financial Conduct Authority (‘FCA’) Handbook to take into account: ‘(1) relevant:

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(a) law and regulations; (b) regulators’ rules, guidance and standards; (c) codes of practice; and (2) ([when] appropriate) what [I consider] to have been good industry practice at the relevant time.’ The legal and regulatory context that’s relevant to this complaint is, in many ways, no different to that shared in several hundred decisions by ombudsmen on very similar complaints – which can be found on our website. I therefore don’t think it’s necessary to set out that context in detail here. But I’d add that the following regulatory rules/guidance are also relevant: • The Consumer Credit Sourcebook (‘CONC’) – also found in the FCA’s Handbook of Rules and Guidance. Below are the most relevant provisions and/or guidance as they were at the relevant time: • CONC 3.7.3R • CONC 4.5.3R • CONC 4.5.2G • The FCA’s Principles The rules on consumer credit sit alongside the wider obligations of firms, such as the Principles for Businesses (‘PRIN’). Set out below are those that are most relevant to this complaint: • Principle 6 • Principle 7 • Principle 8 What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. As neither party has provided any further information or evidence, I confirm my provisional decision. My reasons remain the same. My final decision For the reasons given, I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs C and Mr C to accept or reject my decision before 28 April 2026. Christopher Reeves Ombudsman

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