Tandem Bank Limited · DRN-6249162

The complaint Mr B’s complaint is, in essence, that Tandem Bank Limited (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. What happened Mr B was the member of a timeshare provider (the ‘Supplier’) – having purchased a number of products from it over time. But the products at the centre of this complaint is his membership of timeshares that I’ll call the ‘Fractional Club’ and the ‘Signature Collection’ – points in which Mr B purchased on the dates below: • 1,820 fractional points on 15 October 2018 for £21,022 (‘Purchase Agreement 1’) • 1,820 fractional points on 27 August 2019 for £11,516 (‘Purchase Agreement 2’) (which, when appropriate, I’ll simply refer to as the ’Purchase Agreements’) As this complaint is concerned with both purchases, I’ll refer to them as the ‘Times of Sale’ for the purposes of my decision. Fractional Club and Signature Collection membership was asset backed – which meant it gave Mr B more than just holiday rights. It also included a share in the net sale proceeds of a property named on the relevant purchase agreement (which I’ll refer to as the ‘Allocated Property’ or, when appropriate, the ‘Allocated Properties’) after his membership term ends. Mr B paid for his fractional points by taking the following amounts of finance from the Lender: • £21,022 on 15 October 2018 (‘Credit Agreement 1’) • £32,065 on 27 August 2019 (‘Credit Agreement 2’), this included the repayment of Credit Agreement 1. (which, when appropriate, I’ll simply refer to as the ‘’Credit Agreements’) Mr B – using a professional representative (the ‘PR’) – wrote to the Lender on 17 October 2023 (the ‘Letter of Complaint’) to raise a number of different concerns. As 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 B’s concerns as a complaint and issued its final response letter on 28 November 2023, rejecting it on every ground. The complaint was then referred to the Financial Ombudsman Service. I issued a provisional decision on 10 March 2026 setting out why I didn’t plan to uphold Mr B’s complaint. I said: “I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint.

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Having done that, I do not currently think this complaint should be upheld. 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 PR says the Supplier misrepresented the timeshare membership to them at the Times of Sale and that they have claims for misrepresentation against The Lender. Certain conditions must be met for Section 75 to apply including, but not limited to, the nature of the arrangements between the parties involved in the transaction. Because of the way in which Section 75 operates, if the Supplier is liable for having misrepresented something to Mr B at the Time of Sale, or has breached its contract with him, that might give rise to a potential joint and several liability on the part of the creditor. At the Time of Sale1, Mr B took out finance with another lender (‘Lender H’). So, it is Lender H that filled the role as the creditor in the transaction in question. When Lender H assigned the loan to the Lender, it didn’t necessarily follow that all of its duties or other obligations, such as any potential liability for a claim under Section 75, were similarly assigned. Although Section 189(1) of the CCA includes an assignee within the definition of a creditor, Goode2 indicates that this shouldn’t be interpreted as creating a positive liability on the assignee for a monetary claim under Section 75. I’m further conscious of the conclusions reached by the High Court in Jones v Link Financial Ltd [2012] EWHC 2402 (‘Jones’), which drew a distinction between pre-assignment liabilities such as might arise under Section 75, and those statutory duties under the CCA that the assignee was required to perform in order to enforce its assigned rights. With that said, it doesn’t mean that a claim like Mr B’s can’t be made. Rather, both Goode and Jones highlight the inherent difficulty that he faces in succeeding with their claim. And with this in mind, I can’t say that the Lender acted unfairly or unreasonably towards Mr B when it declined to pay him compensation for the claims he said it was liable to pay under Section 75. Section 140A of the CCA: did the Lender participate in unfair credit relationships? The matters Mr B has raised under Section 140A are not subject to the same difficulties as those raised under Section 75. Paragraph 45A.65 of Goode indicates that Section 140B empowers a Court to impose a positive liability on an assignee. So, determining what’s fair and reasonable in the circumstances of this complaint includes considering whether the relationship between Mr B and the Lender was unfair. In this case it looks like Credit Agreement 2 consolidated Credit Agreement 1, so they are related agreements and I can consider things said or done by (or on behalf of) Lender H during the course of Credit Agreement 1 when considering whether the relationship between Mr B and the Lender was unfair. 1 References to Time of Sale under this heading should be read to include the Times of Sal. 2 Goode: Consumer Credit Law and Practice – Division I Commentary – Part IC Consumer Credit Legislation – 45A Assignment – III Assignment and the CCA 1974: the assignee as creditor/lender or owner – 1 The basic rule – Pre-assignment breaches (para 45A.62)

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Having considered the entirety of the credit relationship between Mr B 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 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 5. Any existing unfairness from a related credit agreement. I have then considered the impact of these on the fairness of the relevant credit relationship between Mr B and the Lender. The Supplier’s sales & marketing practices at the Time of Sale Mr B’s complaint about the Lender being party to unfair credit relationships was and is made for several reasons. The PR says, for instance: • The right checks weren’t carried out before the Lender lent to Mr B. • Fractional Club membership had been misrepresented by the Supplier at the Time of Sale because Mr B was: (1) told by the Supplier that Fractional Club membership had a guaranteed end date when that was not true. (2) Told by the Supplier that he owned a ‘fraction’ of the Allocated Property when that was not true as it was owned by a trustee. (3) told by the Supplier that Fractional Club membership was an “investment” when that was not true. I haven’t seen anything to persuade me that the right checks weren’t carried out by the Lender 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 (and I make no such finding), I would have to be satisfied that the money lent to Mr B was actually unaffordable before also concluding that he lost out as a result and then consider whether the credit relationship with the Lender was unfair to him for this reason. But from the information provided, I am not satisfied that the lending was unaffordable for the Mr B. Neither the PR nor Mr B have set out in any detail what words and/or phrases where allegedly used by the Supplier to misrepresent Fractional Club or Signature Collection membership for the reason given in points 1 or 2. However, the PR says that such representations were untrue because the Allocated Properties were legally owned by a trustee and there was no indication of what duty of care it had to actively market and sell the properties. Further, there is no guarantee that any sale will result at all, leaving prospective members to pay their annual management charge for an indefinite and unspecified period.

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However, I cannot see why the phrases in points 1 or 2 above would have been untrue at the Times of Sale even if it was said. It seems to me to reflect the main thrust of the contracts Mr B entered into. And while, under the relevant Fractional Club Rules, the sale of the Allocated Properties could be postponed for up to two years by the ‘Vendor’, longer than that if there were problems selling and the ‘Owners’ agreed, or for an otherwise specified period provided there was unanimous agreement in writing from the Owners, that does not render the representation above untrue. So, I am not persuaded that the representation above constituted a false statement of fact even if it was made. As for point 3, it does not strike me as a misrepresentation even if such a representation had been made by the Supplier (which I make no formal finding on). 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 properties are sold. After all, a share in an allocated property was clearly the purchase of a share of the net sale proceeds of a specific property in a specific resort. And while the PR might question the exact legal mechanism used to give prospective members that interest, it did not change the fact that they acquired such an interest. Overall, therefore, I don’t think that Mr B’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 now says the credit relationship with the Lender was unfair to him. And that’s the suggestion that Fractional Club and Signature Collection membership was marketed and sold to him as an investment in breach of prohibition against selling timeshares in that way. The Supplier’s alleged breach of Regulation 14(3) of the Timeshare Regulations The Lender does not dispute, and I am satisfied, that Mr B’s Fractional Club and Signature Collection memberships 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 or Signature Collection 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 Times 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. Shares in the Allocated Properties clearly constituted investments as they offered Mr B 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 note at this stage that the fact that Fractional Club and Signature Collection 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.

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In other words, the Timeshare Regulations did not ban products such as the Fractional Club or Signature Collection. They just regulated how such products were marketed and sold. To conclude, therefore, that Fractional Club and Signature Collection membership was marketed or sold to Mr B as an investment in breach of Regulation 14(3), I have to be persuaded that it was more likely than not that the Supplier marketed and/or sold membership to him as an investment, i.e. told him or led him to believe that Fractional Club and/or Signature Collection 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 and Signature Collection membership was marketed and/or sold by the Supplier at the Times 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 or Signature Collection as an ‘investment’ or quantifying to prospective purchasers, such as Mr B, the financial value of their share in the net sales proceeds of the Allocated Properties along with the investment considerations, risks and rewards attached to them. 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 and/or Signature Collection membership as an investment. So, I accept that it’s equally possible that either membership was marketed and sold to Mr B as an investment in breach of Regulation 14(3). However, whether or not there was a breach of the relevant prohibition by the Supplier is not ultimately determinative of the outcome in this complaint for reasons I will come on to shortly. And with that being the case, it’s not necessary to make a formal finding on that particular issue for the purposes of this decision. Was the credit relationship between the Lender and Mr B rendered unfair? 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 such breaches had on the fairness of the credit relationship between Mr B 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 B 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 Agreements and the Credit Agreements is an important consideration. But on my reading of the evidence before me, the prospect of a financial gain from Fractional Club and Signature Collection membership was not an important and motivating factor when Mr B decided to go ahead with his purchases.

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I do not recognise an assertion within Mr B’s testimony that he was persuaded to purchase Fractional Club or Signature Collection membership by such a prospect and most of his statement talks about the holidays he was told he could go on and the quality of the accommodation. And the call notes the PR provided from its conversation with him in June 2023 make only a passing reference to fractional ownership without conveying what was said or done by the Supplier to make him think he could profit from his purchases or why this might have been important. Looking also at the notes the Lender provided from the Supplier which it said were recorded at the Time of Sale in 2018, Mr B had used the Supplier’s accommodation on the recommendation of a friend and it looks to me like he had been impressed with it and decided to go ahead with his purchase on the strength of this. Furthermore, when describing the 2019 purchase Mr B’s written statement says he was shown a “fantastic 4 bedroom apartment” which again, without any other reference to the prospect of profit or financial gain makes me think he purchased on the basis of the quality of the new accommodation (Signature Collection membership offered preferential rights to use the Allocated Property that did not come with Fractional Club membership) that would be available to him under Signature Collection membership – even if the points he was purchasing was the same. Also at the end of his written statement Mr B says “Finally we come to our senses that these become a financial burden to our family specially on the present economic situation it is the reason why we decided to take a chance is to make a claim”. It doesn’t appear to me that the investment element of either membership played much of a part in Mr B’s dissatisfaction with those products. That doesn’t mean Mr B wasn’t interested in a share in the Allocated Properties. After all, that wouldn’t be surprising given the nature of the product at the centre of this complaint. But as Mr B doesn’t persuade me that his purchases were motivated by his shares in the Allocated Properties and the possibility of a profit, I don’t think breaches of Regulation 14(3) by the Supplier were likely to have been material to the decisions Mr B 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 B’s decisions to purchase Fractional Club membership 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 a breach of Regulation 14(3). And for that reason, I do not think the credit relationships between Mr B and the Lender were unfair to him even if the Supplier had breached Regulation 14(3). Conclusion In conclusion, I do not think that the Lender acted unfairly or unreasonably when it dealt with the relevant Section 75 claims, and I am not persuaded that the Lender was party to credit relationships with Mr B under the Credit Agreements that were unfair to him for the purposes of Section 140A of the CCA – nor do I see any other reason why it would be fair or reasonable to direct the Lender to compensate him.” The PR did not agree with my provisional decision and provided further comments and evidence for consideration. The Lender said it had nothing further to add. The complaint has therefore been returned to me for a final decision.

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The legal and regulatory context In considering what is fair and reasonable in all the circumstances of the complaint, I am required under DISP 3.6.4R to take into account: relevant (i) law and regulations; (ii) regulators’ rules, guidance and standards; and (iii) codes of practice; and (where appropriate), what I consider to have been good industry practice at the relevant time. The legal and regulatory context that I think is relevant to this complaint is no different to that shared in several hundred ombudsman decisions on very similar complaints. And with that being the case, it is not necessary to set it out here. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. 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 provisional decision in the main relate to the issue of whether the credit relationship between Mr B and the Lender was unfair. In particular, the PR has provided further comments in relation to whether the membership was sold to Mr B as an investment at the Time of Sale. As outlined in my provisional decision, the PR 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 provisional decision. 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 provisional decision. 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 relationship? The PR said: The supplier’s use of a quantified ‘3.87% Unit Share’ in its pricing documentation is inherently indicative of a capital interest and would reasonably be understood as such by a consumer. The subsequent characterisation of the product as a mere ‘holiday entitlement’ is inconsistent with that presentation. This mismatch between form and substance goes to the heart of the transactional fairness and renders the relationship unfair within the meaning of section 140A. The inclusion of a ‘Unit Share’ on the Pricing Sheet for Fractional Club membership was not misleading as it simply stated the proposed share of the proceeds of the sale of the Allocated property when Mr B’s membership term ended. I do not agree it reasonably implied Mr B’s membership of Fractional Club had a resale value on the open market and no

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such assertion has been made by Mr B in any of his testimony. So, I don’t think Mr B’s relationship with the lender was unfair for the reason the PR has stated. The PR has also provided its further thoughts as to Mr B’s likely motivations for purchasing Fractional Club and Signature Collection membership. I recognise it has a different interpretation of Mr B’s testimony to me and thinks it points to him having been motivated by the prospect of a financial gain from Fractional Club membership. In my provisional decision I explained the reasons why I didn’t think Mr B’s purchase was motivated by the prospect of a financial gain (i.e., a profit). And although I have carefully considered the PR’s arguments in response to this, I’m not persuaded the conclusion I reached on this point was unfair or unreasonable. The PR has pointed out references that Mr B made to viewing Fractional Club membership as an investment, including his quote “Explaining everything that it’s a good investment because they covered worldwide resort.”. However, it’s clear from this statement that when Mr B said good investment he viewed this as an investment in holidays as opposed to a financial investment that could return a profit. While the PR’s call notes make a more general reference to being told Fractional Club membership was a good investment, it’s clear from Mr B’s written statement as to what he actually meant by this i.e. an investment in holidays. Nothing he says in any of his other testimony or any of the other evidence persuades me otherwise, including everything the PR has pointed out in response to my provisional decision. So, ultimately, for the above reasons, along with those I already explained in my provisional decision, I remain unpersuaded that any breach of Regulation 14(3) was material to Mr B’s purchasing decision. And for that reason, I do not think the credit relationship between Mr B and the Lender was unfair to him even if the Supplier had breached Regulation 14(3). 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 B’s Section 75 claims, and I am not persuaded that the Lender was party to a credit relationship with him under the Credit Agreement 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 to direct the Lender to compensate him. My final decision For the reasons I have explained, I do not uphold Mr B’s complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr B to accept or reject my decision before 21 April 2026. Michael Ball Ombudsman

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