Shawbrook Bank Limited · DRN-6243337

The Complaint Mr and Mrs G’s complaint is, in essence, that a timeshare they purchased on 3 September 2014 (the ‘Time of Sale’) was mis-sold. And as Shawbrook Bank Limited financed that purchase, Mr and Mrs G say – with reference to and reliance on various provisions in the Consumer Credit Act 1974 (as amended) (the ‘CCA) – that it has acted unfairly and unreasonably in relation to that purchase. Background to the Complaint Mr and Mrs G purchased membership of a timeshare from a timeshare provider (the ‘Supplier’) at the Time of Sale – paying 14,117 Euros for it (the ‘Purchase Agreement’). The membership in question was asset backed – which meant it gave Mr and Mrs G more than just holiday rights. It also included a share in the net sale proceeds of a property named on the Purchase Agreement (which was referred to as apartment 300) (the ‘Allocated Property’) after their membership term was due to end. Mr and Mrs G paid for their membership by taking finance of £12,000 from Shawbrook over 120 months (the ‘Credit Agreement’). The APR was 13%, the total charge for that credit was £8,859.60 and the total amount repayable in the event the finance ran to term was £20,859.60. Mr and Mrs G – using a professional representative (the ‘PR’) – wrote to Shawbrook on 19 May 2020 (the ‘Letter of Complaint’) to make claims under Section 75 of the CCA. The reasons for the claims at that time are likely to be familiar to both sides, so I don’t intend to repeat them here in detail. But, in summary, the PR suggested that the Supplier made the following misrepresentations at the Time of Sale: (1) Mr and Mrs G’s membership offered them a guaranteed return on their initial investment plus a profit in 2030 at the latest when that wasn’t true. (2) Mr and Mrs G could also rent out their holiday rights for at least 1,200 Euros – enabling them to pay the annual management charge and make a profit – when that wasn’t true. (3) The Supplier led Mr and Mrs G to believe that they couldn’t give up their existing timeshare without the Supplier’s help when that wasn’t true. It was for these reasons that the PR said that Mr and Mrs G made their purchase. However, the PR also alleged that Mr and Mrs G were pressured at the Time of Sale before also going on to say that, because certain aspects of the Supplier’s business were now owned by another company, the promises it made to Mr and Mrs G in relation to renting out their holiday rights will not be honoured. On 9 April 2021, Shawbrook wrote to the PR rejecting Mr and Mrs G’s concerns in full (the ‘FRL’). But before that, on 22 September 2020, the PR referred the complaint to the Financial Ombudsman Service. The complaint was looked at by an Investigator who concluded that Shawbrook didn’t need to do anything to compensate Mr and Mrs G.

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The PR disagreed with the Investigator’s assessment and asked for an Ombudsman’s decision – which is why it was passed to me. I issued a provisional decision on 5 March 2026 rejecting the complaint and I gave both sides until 19 March 2026 to submit new evidence and/or arguments. Neither side have done that. So, the complaint was passed back to me to finalise my thoughts. The Legal and Regulatory Context As I said in my PD, in considering what is fair and reasonable in all the circumstances of the complaint, I am required under Rule 3.6.4 of the Dispute Resolution Rules (which can be found in the Financial Conduct Authority’s Handbook of Rules and Guidance) to 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. The legal and regulatory context that I still think is relevant to this complaint is no different to that shared in several hundred ombudsman decisions on very similar complaints. And as both Shawbrook and the PR are likely to be familiar with that context, it isn’t necessary to set it out here. My Findings I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. And having done that, I still don’t think it should be upheld for the same reasons I gave in my PD. However, before I get on to those reasons, I want to repeat the point I made in my PD about my role as an Ombudsman. It isn’t 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 alleged Misrepresentations at the Time of Sale As I said in my PD, certain conditions must be met if the protection afforded to consumers under Section 75 of the CCA is engaged, including, for instance, those in relation to the cash price of the purchase and the nature of the arrangements between the parties involved in the transaction. But as I also said in my PD, it isn’t necessary to make any formal findings on those conditions here as I don’t think there’s any merit to the allegations in question anyway. It was suggested in the Letter of Complaint that Mr and Mrs G’s membership had been misrepresented by the Supplier at the Time of Sale because they were led to believe or told by the Supplier that: (1) Their membership offered them a guaranteed return on their initial investment plus a profit in 2030 at the latest when that wasn’t true. (2) They could also rent out their holiday rights for at least 1,200 Euros – enabling them to pay the annual management charge and make a profit – when that wasn’t true. (3) They couldn’t give up their existing timeshare without the Supplier’s help when that wasn’t true. However, as I also said in my PD, when looking at a claim under Section 75 of the CCA,

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I can only consider whether there was a factual and material misrepresentation by the Supplier. Mr and Mrs G still haven’t set out who said what and in what circumstances to give this aspect of the complaint the colour and context necessary to demonstrate that the Supplier made false statements of existing fact and/or opinion. And as there isn’t any other evidence on file to support the suggestion that the timeshare was misrepresented for the reasons above, I don’t think it was. For that reason, therefore, I still don’t think that Shawbrook acted unreasonably when it dealt with this particular Section 75 claim. Section 75 of the CCA: the Supplier’s alleged Breach of Contract It was suggested by the PR that, because certain aspects of the Supplier’s business had been sold on, the promises it made to Mr and Mrs G in relation to renting out their holiday rights wouldn’t be honoured. However, Mr and Mrs G still haven’t said, suggested or provided evidence to demonstrate that they were and/or are no longer able to use their membership in the way they bargained for. And as I haven’t seen any other evidence to indicate that’s the case, I’m not persuaded that Shawbrook is liable to pay them any compensation for a breach of contract by the Supplier. And with that being the case, I don’t think Shawbrook acted unfairly or unreasonably in relation to this aspect of the complaint either. Section 140A of the CCA: did Shawbrook participate in an unfair credit relationship? I’ve already explained why I’m not persuaded that Mr and Mrs G’s membership was actionably misrepresented by the Supplier at the Time of Sale. But, as I said in my PD, the very aspects of the sales process that fuelled that allegation must also be explored with Section 140A in mind. Having reconsidered the entirety of the credit relationship between Mr and Mrs G and Shawbrook along with all of the circumstances of the complaint, I still don’t think the credit relationship between them was likely to have been rendered unfair to Mr and Mrs G for the purposes of Section 140A. When coming to that conclusion, and in carrying out my analysis, 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; (2) The provision of information by the Supplier at the Time of Sale, including the contractual documentation and disclaimers made by the Supplier; (3) The commission arrangements between Shawbrook and the Supplier at the Time of Sale and the disclosure of those arrangements; (4) Evidence provided by both parties on what was likely to have been said and/or done at the Time of Sale; and (5) The inherent probabilities of the sale given its circumstances. I have then considered the impact of these on the fairness of the credit relationship between Mr and Mrs G and Shawbrook. It was suggested in the Letter of Complaint that Mr and Mrs G were pressured into their purchase at the Time of Sale. But as I said in my PD, that’s difficult to reconcile with the reasons the PR gave (in the same letter) for why Mr and Mrs G made their purchase. Nonetheless, I acknowledge that they may have felt weary after a sales process that went on

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for a long time. But they themselves still say nothing about what was said and/or done by the Supplier during their sales presentation that made them feel as if they had no choice but to purchase membership when they simply did not want to. They were also given a 14-day cooling off period and they have not provided a credible explanation for why they did not cancel their membership during that time. And with all of that being the case, I’m still not persuaded that they made the decision to purchase their membership because their ability to exercise that choice was significantly impaired by pressure from the Supplier. So, I don’t think that Mr and Mrs G’s credit relationship with Shawbrook was rendered unfair to them under Section 140A for that reason. But there is another issue to consider here and that’s the suggestion that Mr and Mrs G’s membership was marketed and sold to them as an investment in breach of a prohibition against selling timeshares in that way. The Supplier’s alleged breach of Regulation 14(3) of the Timeshare, Holiday Products, Resale and Exchange Contracts Regulations 2010 (the ‘Timeshare Regulations’) As I said in my PD, a share in the Allocated Property clearly constituted an investment as it offered Mr and Mrs G the prospect of a financial return – whether or not, like all investments, that was more than what they first put into it. But it is important to repeat the point that the fact that 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 one purchased by Mr and Mrs G. They just regulated how such products were marketed and sold. To conclude, therefore, that Mr and Mrs G’s membership was marketed or sold to them as an investment in breach of Regulation 14(3), I have to be persuaded that it was more likely than not that the Supplier marketed and/or sold membership to them as an investment, i.e. told them or led them to believe that membership offered them the prospect of a financial gain (i.e., a profit) given the facts and circumstances of this complaint. It remains my view that there is very limited evidence in this complaint as to whether Mr and Mrs G’s timeshare 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. But I accept, as I did in my PD, that it’s possible that Mr and Mrs G’s membership was marketed and sold to them in that way. However, as I’ve said before, whether or not there was a breach of the relevant prohibition by the Supplier is not itself 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 the probability of that particular issue for the purposes of this decision. Would the Credit Relationship between Shawbrook and Mr and Mrs G have been rendered unfair by the Supplier’s breach of Regulation 14(3)? Having found that it was possible that the Supplier breached Regulation 14(3) of the Timeshare Regulations at the Time of Sale, I need to consider what impact such a breach (if there was one) had on the fairness of the credit relationship between Mr and Mrs G and Shawbrook 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.

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Indeed, it still seems to me that, if I am to conclude that a breach of Regulation 14(3) led to a credit relationship between Mr and Mrs G and Shawbrook that was unfair to them and warranted relief as a result, whether the Supplier’s breach of Regulation 14(3) led them to enter into the Purchase Agreement and the Credit Agreement is an important consideration. As I’ve already said, there is very limited evidence in this complaint as to whether Mr and Mrs G’s timeshare 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. But it remains the case that there is even less evidence to indicate that such a breach (were there one) would have been material to their purchasing decision. Direct testimony from Mr and Mrs G, in full and in their own words, is important in a case like this. It allows me to assess credibility and consistency, to know precisely what was supposedly said and the context in which it was supposedly said, and, importantly, to hear from them as to what mattered to them. And in the ongoing absence of such testimony, I’ve no way of knowing what was important to them when they decided to make the purchase in question. So, I’m still not persuaded by what I’ve seen that Mr and Mrs G would have made a different purchasing decision to the one they did at the Time of Sale whether or not there had been a breach of Regulation 14(3). And for that reason, I don’t think the credit relationship between them and Shawbrook was unfair to them even if the Supplier had breached Regulation 14(3). 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 and Mrs G and Shawbrook under the Credit Agreement and related Purchase Agreement was unfair to them. And with that being the case, I don’t think it would be fair or reasonable that I uphold this complaint on that basis.

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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 and Mrs G to accept or reject my decision before 21 April 2026. Morgan Rees Ombudsman

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