Shawbrook Bank Limited · DRN-5167058

The complaint Mr W’s complaint is, in essence, that Shawbrook Bank Limited (the ‘Lender’) acted unfairly and unreasonably by (1) being party to unfair credit relationships with him under Section 140A of the Consumer Credit Act 1974 (as amended) (the ‘CCA’) and (2) deciding against paying claims under Section 75 of the CCA. What happened Introductory issues The CCA introduced a regime of connected lender liability under Section 75. This afforded consumers (“debtors”) a right of recourse against lenders which provided 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. There are also other aspects of a sales process that I can explore with Section 140A in mind. Broadly speaking these Section 140A provisions relate to alleged unfair credit relationships. Mr W has used a professional representative (PR) to bring a complaint about a number of timeshare memberships he bought. However, this has been a somewhat difficult complaint to follow, and I first need to explain what I am actually addressing in this decision. Firstly, we know that Mr W (and indeed his wife, Mrs W) owned a number of timeshare products from 2015 onwards. Mr W’s PR appears to have written three formal Letters of Complaint. No complaint was ever raised about a 2015 ‘trial’ membership product, but complaints were raised about three Fractional timeshare memberships bought in January 2016, October 2016, and October 2017. Fractional memberships typically brought holidaying availability to the member(s) over a lengthy period based on the number of holiday points they purchased. The greater the number of points purchased, the greater the holidaying rights. However, Fractional membership had another feature; it also included a share in the net sale proceeds of a property named on the Purchase Agreement (the ‘Allocated Property’) after the membership term ended. Purchases made during the above periods typically had membership end dates in the 2030s, meaning that at around that time, the original purchaser would be entitled to a small percentage of the Allocated Property sale when it was disposed of. As I will explain more about later, there were rules about how these products were sold to consumers. Given the ‘trial’ isn’t the subject of a specific complaint, I won’t be addressing that purchase directly in this decision. Nor will I be addressing the third Fractional membership purchase (October 2017). This is because it was Mr W only who appears to have taken out loans with Shawbrook Bank Limited, the Lender, for the first and second Fractional membership purchases (January and October 2016) as the sole applicant – these are therefore connected loans and if there was any unfair credit relationship found, then that could span both loan periods until the whole relationship ended. However, for the third Fractional membership, it appears that both Mr and Mrs W were named on the agreement i.e. this was a completely different agreement and not one I’ll be addressing.

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For all these reasons—and to be clear—my decision here only covers Fractional memberships 1 and 2 (January and October 2016). Mr W is the sole complainant. The complaints, in summary, are that Mr W was: 1. Told that he and Mrs W had purchased an investment that would appreciate in value when that was not true. 2. Told that they would own a share in a property that would increase in value during the membership term when that was not true. 3. Told they could sell the timeshare back to the resort or easily sell it at a profit when that wasn’t true. 4. Made to believe that they would have access to a specific apartment all around the year. Mr W’s PR wrote to the Lender to raise these complaints, but it rejected the claims on every ground. Dissatisfied, the PR referred the complaint to the Financial Ombudsman Service. One of our investigators looked into the complaint and said we could only look into certain parts of it. But they recommended that nothing should be upheld in Mr W’s favour. The PR then asked for an ombudsman’s decision – which is why it was passed to me. I issued a provisional decision (PD) about this case on 18 March 2026 in which I comprehensively set out my reasons for not intending to uphold the complaint. The PD should be read in conjunction with this final decision. However, the PD invited the parties to respond with any further information or evidence they wanted to submit. I’ve now had a response from Mr W’s PR which basically disagrees with my PD. I have read everything said on his behalf with great care. However, 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. 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, in many ways, no different to that shared in several hundred published ombudsman decisions on very similar complaints – which can be found on the Financial Ombudsman Service’s website. And with that being the case, it is not necessary to set out that context in detail here. But I would add that the following regulatory rules/guidance are also relevant: The Consumer Credit Sourcebook (‘CONC’) – Found in the Financial Conduct Authority’s (the ‘FCA’) Handbook of Rules and Guidance Below are the most relevant provisions and/or guidance as they were at the relevant time: • CONC 3.7.3 [R]; CONC 4.5.3 [R]; CONC 4.5.2 [G] The FCA’s Principles The rules on consumer credit sit alongside the wider obligations of firms, such as the Principles for Businesses (‘PRIN’). Set out below are those that are most relevant to this complaint:

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• 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. Having done this, I am upholding this complaint. This is a final decision. Section 75 of the CCA: the Supplier’s misrepresentations at the Times of Sale. I’m going to start by explaining that I think the complaint about these two Fractional memberships was made too late for the purposes of alleged misrpresentations. Added to this—and Mr W’s PR should know this—is that becuase the respective loans exceeded £30,000 they are above the threshold about which a mispresentation complaint can be brought. But there are essentially two reasons why a misrpresentation complaint would fail. Under the CCA, certain conditions must be met if the protection afforded to consumers is engaged, including the condition that the cash price of the purchase must exceed £100 but not exceed £30,000. So, if the purchase price of the product is in excess of £30,000, irrespective of the value of any trade-in, a claim under Section 75 cannot succeed. As I’ve seen from all the various purchasing documents in this case which we’ve been sent, Mr W’s membership in January 2016 caused him to borrow £33,930. And his October 2016 purchased caused him to borrow £35,444. This means both are greater than the upper limit covered by Section 75, as I’ve described above. Our investigator pointed out these matters to the PR which didn’t address them. I’ve also had no response about this issue in the PD. I have also taken into consideration that when a complaint is referred to the Financial Ombudsman Service on the back of an unsuccessful attempt to advance a Section 75 claim, the act or omission that engages the Service’s jurisdiction is different to the considerations under Section 140A. It is the time of the creditor’s refusal to accept and pay the debtor’s claim which is relevant, rather than anything that occurs before the claim was put to the creditor. However, the Lender has a defence to the claim under the Limitation Act 1980 (the LA). The Act essentially sets out that the complainants had six years from which the cause of action accrued, to make the claim. As a general rule, creditors can reasonably reject Section 75 claims that they are first informed about after the claim has become time-barred under the LA as it wouldn’t be fair to expect creditors to look into such claims so long after the liability arose and after a limitation defence would be available in court. So, it is relevant to consider whether Mr W’s Section 75 claim for misrepresentation was also time-barred under the LA before he put it to the Lender. The dates on which the cause of actions accrued in this case were 12 January 2016 and 13 October 2016 when Mr W entered into the purchase(s) and the time(s) of the alleged misrepresentations of the Supplier – which he says were relied upon. As the two connected loans from the Lender were used to help finance these two purchases, these two dates were when he entered into the Credit Agreement that he suffered an alleged loss(es). Mr W first notified the Lender of the Section 75 claim(s) on 9 February 2023. As more than six years had passed between the time of the sales and when the claim(s) was / were first

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put to the Lender, I don’t think it was unfair or unreasonable of the Lender to reject them given what I’ve explained above. Both complaints were effectively made too late. In this case, I haven’t seen any arguments from Mr W to persuade me otherwise. His points of complaint contained within the PR’s letter(s) set out alleged serious issues early on in the contract(s) and would have clearly included being unhappy with the Supplier from the outset on a number of fronts. Having looked very carefully at what he has to say about misrepresentation generally, I think the circumstances as alleged would have caused discovery of these matters within a very short time of the membership(s) being taken out. I’m afraid his complaint is therefore neither in scope of the legislation due to the £30,000 limit, and in any event, the Lender would have a defence under the LA. 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 Times of Sale. But there are other aspects of the sales’ process that, being the subject of dissatisfaction, I can explore with Section 140A in mind if I’m to consider this complaint in full – which is what I’ve done next. Having considered the entirety of the credit relationships between Mr W and the Lender along with all of the circumstances of the complaint, I don’t think any 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, any existing unfairness from a related credit agreement. 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 Times of Sale As a general point, I have noted here that the PR’s specific points of complaint about an unfair relationship are also ones I’ve now seen a great many times. The allegations are set out in other complaints I have seen; all unconnected timeshare complaints. Typically, the same issues are replicated exactly in each case. I also think many of the points raised by the PR don’t actually apply to Mr W’s experiences. As a reminder, I am only addressing the January and October 2016 sales. The PR says that the right checks weren’t carried out before the Lender lent to Mr W. But I haven’t seen anything meaningful to persuade me this was the case. I’ve noted, for example, that although Mr W apparently made a ‘client witness statement’1, there’s no mention of unaffordability in it. 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 1 Undated, unsigned.

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a result and then consider whether the credit relationship with the Lender was unfair for this reason. However, from the very limited information provided in this respect, I am not satisfied that the lending was unaffordable for Mr W on either occasion. Connected to this is the suggestion by the PR that the Credit Agreement was arranged by an unauthorised credit broker, the upshot of which is to suggest that the Lender wasn’t permitted to enforce the Credit Agreement. However, it looks to me like Mr W knew, amongst other things, how much he was borrowing on both occasions and repaying each month. He knew who he was borrowing from and that he was borrowing money to pay for Fractional Club membership; Mr W fully explains this in his own client personal statement. As the lending doesn’t look like it was unaffordable for him, even if the Credit Agreement was arranged by a broker that didn’t have the necessary permission to do so, I can’t see why that led to him suffering a financial loss – such that I can say that the credit relationship in question was unfair as a result. Mr W also alleges that he and Mrs W were subjected to repeated and oppressive pressure at the point-of-sale meetings. I won’t repeat all Mr W’s comments, but I do understand the points and allegations he makes which relate to long meetings and an alleged ‘hard sell environment’ on each occasion. However, I think it’s first relevant to look at all the circumstances in which they came to these respective sales events. We know, for example, that they had first attended a type of sales seminar in the UK in 2015 where they bought into a type of ‘trial’ membership. Mr W describes this as being an oppressive sales environment and he then repeats largely similar allegations as regards the next two resort-based sales, which were in Spain in January 2016 and October 2016. The point I’m therefore making here is that I think it’s relevant that Mr and Mrs W attended the two sales events they are complaining about—in January and October 2016—against this backdrop. As such, I do think it’s fair and reasonable to have expected them to have attended the events armed with the information and knowledge of what it was about and what to expect. That’s because Mr W says their experience of the trial membership purchase was unpleasant. But Mr W says the January 2016 Fractional membership purchase was effectively carried out under the same circumstances which involved considerable pressure. Next, I think their attendance at the October 2016 event would also tend, by definition, to mean they must have been armed with even more awareness of what to expect, having by then attended what they describe as two deeply unpleasant sales events by the same Supplier. I’ve carefully considered the likelihood of this as what Mr W is effectively describing is that they returned to make a purchase on each occasion, despite having been pressured into buying a timeshare they didn’t want, the time before. He is categorically saying that the ‘trial’ membership and the first and the second Fractional sales were all pressured and deeply unpleasant. And even though I’m not making a decision here about the third (October 2017) Fractional purchase, Mr W once again says pressure was a prominent feature during this sale too. I’m sorry to disappoint Mr W, but from a starting position, I think these allegations of pressure are unpersuasive. It seems highly unlikely to me that they would continue purchasing from the same Supplier in these circumstances and over so many occasions if undue pressure was repeatedly and unsatisfactorily applied to them, in their view. Nevertheless, I do still acknowledge what Mr W has to say about these sales events in his own client personal statement. I acknowledge also, that it’s possible he and Mrs W may have felt weary after a sales process which they imply may have gone on for a long time, for

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example. But whilst I do understand what he describes, he says little about what was actually said or done by the Supplier during the sales presentation which made them apparently feel as if they had no choice but to purchase these memberships, when they simply didn’t want to. I think it’s also highly relevant to say that they were given a 14-day cooling off period on each occasion and they have not provided any credible explanations for why they did not cancel their membership during those times. The evidence is strong that they were given a “Right to Withdraw in 14 days” option and form in all cases, which they both duly signed. So, with all of that being the case, I think there is insufficient evidence to demonstrate that they made the decision to purchase these memberships because their ability to exercise that choice was significantly and seriously impaired by pressure from the Supplier. I don’t think all the above facts support this. It was also said in the PR’s Letter of Complaint that Mr and Mrs W were made “to believe that they would have access to the holiday’s [sic] apartment at all times around the year”. But I’ve noted that Mr W makes only very limited comments about this subject area in his own statement. So, it’s not clear to me where this allegation comes from. It’s also not entirely clear whether the PR is saying they thought they would be able to stay at the Allocated Property whenever they wanted, or they thought the availability of general accommodation using their holiday points more broadly, was guaranteed. However, I think it’s reasonable for me to say that Fractional membership 1 was only active for less than 9 months in total, so I can’t see the short time it was held for would have even enabled any such problems to arise – no evidence to the contrary was provided. It’s also reasonable to point out that like any holiday accommodation, availability was not unlimited given the higher demand at peak times, like school holidays, for instance. Some of the sales paperwork Mr and Mrs W were given stated that the availability of holidays was subject to demand. I also find it unlikely that the Supplier would have made promises of the type suggested in the Letter of Complaint, and whilst I accept it’s obviously possible that Mr and Mrs W may not have been able to take certain holidays at certain times, I have not seen enough to persuade me that this rendered the overall credit relationship with the Lender unfair. I therefore don’t think that Mr W’s credit relationship(s) with the Lender were rendered unfair to him under Section 140A for any of the reasons above. But there is another reason, perhaps the main reason, why the PR says the credit relationship with the Lender was unfair to them. And that’s the suggestion that Mr and Mrs W’s membership(s) was / were marketed and sold as an ‘investment’ in breach of prohibition against selling timeshares in that way. This is what I considered next. 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 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 Times 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.”

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But the PR says that the Supplier did exactly that at the Times of Sale – saying, in summary, that Mr and Mrs W were told by the Supplier that Fractional Club membership was the type of investment that would only increase in value. Allegations of this nature are contained within the PR’s Letter of Complaint. The term “investment” is not defined in the Timeshare Regulations. But for the purposes of this 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 was more than what they 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 either 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 as an investment, i.e. told him or led him to believe that the 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 either Fractional Club 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. I am familiar with the sales process and documentation likely used by the Supplier at the time of both sales. On the one hand, it is clear that the Supplier made efforts to avoid specifically describing membership of the Fractional Club as ‘investments’ or quantifying to prospective purchasers, such as Mr W, the financial value of the share(s) in the net sales proceeds of the Allocated Property 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 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 the Consumer rendered unfair?

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Having said 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 that breach could have had on the fairness of the credit relationship(s) between Mr W and the Lender under the relevant 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 a credit relationship between Mr W and the Lender that was unfair and warranted relief as a result, then whether the Supplier’s breach of Regulation 14(3) led them to enter into the relevant Purchase Agreement and the Credit Agreement is an important consideration. To help me decide this point, I’ve considered the allegations as put forward by the PR. I have also reverted back to Mr W’s client personal statement and thought carefully about what he himself has to say. It’s also fair and reasonable that I consider all the wider circumstances in which this sale took place. In so far as any evidence of their being investment related marketing carried out by the Supplier during the sale is concerned, the PR says, “my client was told that they had purchased an investment and that his timeshare would considerably appreciate in value”. The PR also says Mr W was told, he would get a “considerable return on [the] investment”. However, I return to the circumstances that brought them to attending the January and October sales events. These show they were first existing trial members upgrading to Fractional Club membership - then Fractional members purchasing more holiday rights each time. To me, the length and indeed the coveted holidaying rights purchased by Mr W on each of these occasions, speaks clearly to his and Mrs W’s desire for holiday enjoyment above all else. Mr and Mrs W ultimately undertook a reasonably long relationship with the Supplier which lasted several years. Their booking data also shows they booked many and diverse holidays, and they attended several sales events at which they both committed and refused to buy further holiday products. But each time in this case, Mr W purchased more holiday points and overall, I think there was a complexity to his entitlements which included holidaying in the sought after ‘high season’ periods. In my view, these things demonstrate the importance Mr and Mrs W attached to their holidaying experiences. I have of course noted the mention Mr W evidently makes in his client witness statement as to each purchase being an ‘investment’. Despite these allegations being brought on his behalf by a PR, his statement is neither dated nor signed. Given this, and all the information and evidence that I’ve seen in this complaint, I think it’s likely Mr and Mrs W were influenced much more by the promised holidaying experiences on offer from these products, rather than any investment related matters. I find the series of purchases they made show strong circumstantial evidence of this. Each ‘step- up’ in the process represented an incremental and increasing level of holiday product. There is also persuasive evidence showing the sales were incentivised for Mr W to make ‘on the day’ purchases, a sales technique the circumstances strongly show he would have been familiar with. Weighing all this up, and in the specific circumstances of this particular case, I do not think the prospect of a financial gain from either the January 2016 or October 2016 memberships were important and motivating factors when Mr W decided to go ahead with the purchases. Overall, I think there’s much more persuasive evidence that the purchasing rationale lay

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elsewhere, supported as this is by their progression through the suite of timeshare products between 2015 and beyond. Of course, this doesn’t mean they weren’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 I’m afraid Mr W doesn’t persuade me that these purchases were motivated by the share in the Allocated Properties and the possibility of a profit. So, I don’t think a breach of Regulation 14(3) by the Supplier, even if there was one, was likely to have been material to the decision he ultimately made. As I said earlier, whether or not there was a breach of the relevant prohibition by the Supplier is not ultimately determinative of the outcome in this complaint. That’s because everything I’ve comprehensively explained above leads me to think the evidence shows it’s much more likely that Mr W would have still gone ahead and taken out the loans, whether or not the sales had been presented to him as an investment opportunity in breach of Regulation 14(3) of the Timeshare Regulations. On this basis, I therefore don’t think the credit relationships between Mr W and Shawbrook Bank Limited were unfair. The provision of information by the Supplier at the Times of Sale Mr W says he was not given sufficient information at the Times of Sale by the Supplier about some of the ongoing costs of either membership. The PR also says that the contractual terms governing the ongoing costs of membership and the consequences of not meeting those costs were unfair contract terms. As I’ve already indicated, the case law on Section 140A makes it clear that it does not automatically follow that regulatory breaches create unfairness for the purposes of the unfair relationship provisions. The extent to which such mistakes render a credit relationship unfair must also be determined according to their impact on the complainant. I acknowledge that, generally, it is also possible that the Supplier did not give Mr W sufficient information, in good time, on the various charges he and Mrs W could have been subject to as a Fractional Club member in order to satisfy the requirements of Regulation 12 of the Timeshare Regulations (which was concerned with the provision of ‘key information’). But even if that was the case, I cannot see that the ongoing costs of membership were applied unfairly in practice. As for the PR’s argument that there were one or more unfair contract terms in the Purchase Agreement, I can’t see that any such terms were operated unfairly in practice, nor that any such terms led him to behave in a certain way to their detriment. And with that being the case, I’m not persuaded that any of the terms governing these memberships are likely to have led to an unfairness that warrants a remedy. Responses to my PD The PR only addressed certain limited sections of the above rationale. It has highlighted under Section 140B (9) of the CCA, that the burden of proof falls on the Lender to disprove the allegation that its relationship with Mr W was unfair. I agree that this is correct, placing a burden on lenders during the process of litigation. That does not mean, though, that the Lender – or I – should take a claim at face value. There remains an onus on Mr W to provide some evidence for the claim, despite the overall burden of proof resting with the Lender, as was set out in the judgment in Smith and another v Royal Bank of Scotland plc [2023] UKSC

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34 at paragraph 40. I also remind both parties that it is my role to make findings on what I consider to be fair and reasonable in all the circumstances of any given complaint. I’m also satisfied that, where appropriate, I have applied the law and the various rules correctly. I previously told both parties in my PD about the overall legal and regulatory context that I think is relevant to this complaint. The PR now objects to the approach I’ve taken, believing that I have detracted from the judgment in Shawbrook & BPF v FOS2 and the case law that contributed to it, by requiring Mr W to have been primarily or mainly motivated by the investment element in order to uphold the complaint. But I did not make such a finding. I basically said that, in my view, Mr and Mrs W were motivated by the holiday options offered by the Supplier – and this was a factor in my overall conclusion. In light of all the available evidence I said that they would, on balance, have pressed ahead with the purchase of the membership even if there had been a breach of Regulation 14(3). Commission As both sides already know, the Supreme Court handed down an important judgment on 1 August 2025 in a series of cases concerned with the issue of commission: Johnson v FirstRand Bank Ltd, Wrench v FirstRand Bank Ltd and Hopcraft v Close Brothers Ltd [2025] UKSC 33 (‘Hopcraft, Johnson and Wrench’). The Supreme Court ruled that, in each of the three cases, the commission payments made to car dealers by lenders were legal, as claims for the tort of bribery, or the dishonest assistance of a breach of fiduciary duty, had to be predicated on the car dealer owing a fiduciary duty to the consumer, which the car dealers did not owe. A “disinterested duty”, as described in Wood v Commercial First Business Ltd & ors and Business Mortgage Finance 4 plc v Pengelly [2021] EWCA Civ 471, is not enough. However, the Supreme Court held that the credit relationship between the Lender and Mr Johnson was unfair under Section 140A of the CCA because of the commission paid by the Lender to the car dealer. The main reasons for coming to that conclusion included, amongst other things, the following factors: 1. The size of the commission (as a percentage of the total charge for credit). In Mr Johnson’s case it was 55%. This was “so high” and “a powerful indication that the relationship…was unfair” (see paragraph 327); 2. The failure to disclose the commission; and 3. The concealment of the commercial tie between the car dealer and the Lender. The Supreme Court also confirmed that the following factors, in what was a non-exhaustive list, will normally be relevant when assessing whether a credit relationship was/is unfair under Section 140A of the CCA: 1. The size of the commission as a proportion of the charge for credit; 2. The way in which commission is calculated (a discretionary commission 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 2 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’).

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as a broker); and 5. Compliance with the regulatory rules. From my reading of the Supreme Court’s judgment in Hopcraft, Johnson and Wrench, it sets out principles which apply to credit brokers other than car dealer–credit brokers. So, when considering allegations of undisclosed payments of commission like the one in this complaint, Hopcraft, Johnson and Wrench is relevant law that I’m required to consider under Rule 3.6.4 of the Financial Conduct Authority’s Dispute Resolution Rules (‘DISP’). But I don’t think Hopcraft, Johnson and Wrench assists Mr W in arguing that the credit relationship with the Lender was unfair for reasons relating to commission given the facts and circumstances of this timeshare 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 that the commission arrangement gave the Supplier a choice over the interest rate that led him into a credit agreement that cost disproportionately more than it otherwise could have. I acknowledge that it’s possible that the Lender and the Supplier failed to follow the regulatory guidance in place at the Time of Sale insofar as it was relevant to disclosing the commission arrangements between them. But as I’ve said before, case law makes it clear that regulatory breaches do not automatically create unfairness for the purposes of that provision. What’s more, in stark contrast to the facts of Mr Johnson’s case, as I understand it, the Lender didn’t pay the Supplier any commission at the time of any of these sales (including the third Fractional membership). And with that being the case, even if there were information failings at that time and regulatory failings as a result (which I make no formal finding on), I’m not 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. Overall, therefore, I’m not persuaded that any 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 in this case. Conclusion As I indicated at the start of this decision, I have fully considered both these loans, the fact the first credit agreement was consolidated by the second, and whether this led to any ongoing unfairness to Mr W. I do not think that the Lender acted unfairly or unreasonably when it dealt with Mr W’s Section 75 claim(s), and I am not persuaded that the Lender was party to credit relationship(s) with him under the Credit Agreement(s) that was unfair to him for the purposes of Section 140A of the CCA. 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 I do not uphold Mr W’s complaint.

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I do not require Shawbrook Bank Limited to do anything more. 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. Michael Campbell Ombudsman

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