DRN-6286104

The complaint Mrs N’s complaint is, in essence, that Honeycomb Finance Limited (the ‘Lender’) acted unfairly and unreasonably by (1) being party to an unfair credit relationship with her under Section 140A of the Consumer Credit Act 1974 (as amended) (the ‘CCA’) and (2) deciding against paying her claim under Section 75 of the CCA. What happened Mrs N purchased a membership of a timeshare (the ‘Fractional Club’) from a timeshare provider (the ‘Supplier’) on 28 May 2018 (the ‘Time of Sale’). She entered into an agreement with the Supplier to buy fractional points at a cost of £17,433 (the ‘Purchase Agreement’). Fractional Club membership was asset backed – which meant it gave Mrs N more than just holiday rights. It also included a share in the net sale proceeds of a property named on the Purchase Agreement (the ‘Allocated Property’) after her membership term ends. Mrs N paid for the Fractional Club membership by taking finance of £17,433 from the Lender (the ‘Credit Agreement’). Mrs N – using a professional representative (the ‘PR’) – wrote to the Lender on 07 November 2024 (the ‘Letter of Complaint’) to raise a number of different concerns. As those concerns haven’t changed since they were first raised, and 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 Mrs N’s concerns as a complaint and issued its final response letter on 03 January 2025, rejecting it on every ground. The complaint was then referred to the Financial Ombudsman Service. It was assessed by an Investigator who, having considered the information on file, rejected the complaint on its merits. Mrs N disagreed with the Investigator’s assessment and asked for an Ombudsman’s decision – which is why it was passed to me. I issued my provisional findings to the parties on 17 March 2026. In my provisional decision, I said (in italics and smaller font for clarity): I have considered all the available evidence and arguments to decide what is fair and reasonable in the circumstances of this complaint. And 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 CCA introduced a regime of connected lender liability under section 75 that affords consumers (“debtors”) a right of recourse against lenders that provide the finance for the acquisition of goods or services from third-party merchants (“suppliers”) in the event that there is an actionable misrepresentation and/or breach of contract by the supplier. In short, a claim against The Lender under section 75 essentially mirrors the claim Mrs N could make against the Supplier.

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Within the letter of claim the PR made a claim on Mrs N’s behalf under S75 of the CCA. These include allegations of misrepresentation during the sales process and submissions in support of those allegations. This membership was purchased in May 2018 and the Lender in its final response raised the Limitation Act in its defence. Under section 9 of the Limitation Act 1980, Mrs N had to make any claim within six years of when such misrepresentations are said to have happened or when alleged breaches of contract occurred, because those are the points from when she would have lost out. This particular purchase was made in May 2018 but she didn’t make this S75 claim until November 2024. So it is clear to me that the Lender could rely on the Limitation Act as a complete defence from any such claims for alleged misrepresentations at the point of sale. Accordingly I’m not persuaded Mrs N has lost out due to the Lender not upholding her complaint about misrepresentation because it has a complete defence to such a claim. Mrs N says that they could not holiday where and when they wanted to in the letter of claim (the holiday benefits weren’t ‘secured’). That was framed as part of the complaint about the fairness or otherwise of the credit relationship with the Lender under Section 140A of the CCA. However, on my reading of the complaint, this suggests that the Supplier was not living up to its end of the bargain, potentially breaching the Purchase Agreement. Yet, 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 likely to have been signed by Mrs N states that the availability of holidays was/is subject to demand. I accept that she may not have been able to take certain holidays. But I have not seen enough to persuade me that the Supplier had breached the terms of the Purchase Agreement. So, from the evidence I have seen, I do not think Mrs N have lost out due the Lender not agreeing to her S75 claim for either breach of contract or misrepresentation. Section 140A of the CCA: did the Lender participate in an unfair credit relationship? Aside from what I’ve explained there are other aspects of the sales process that, being the subject of dissatisfaction, I must explore with Section 140A in mind if I’m to consider this complaint in full – which is what I’ve done next. Having considered the entirety of the credit relationship between Mrs N and the Lender along with all of the circumstances of the complaint, I don’t think the credit relationship between them was likely to have been rendered unfair for the purposes of Section 140A. When coming to that conclusion, and in carrying out my analysis, I have looked at: 1. The standard of the Supplier’s commercial conduct – which includes its sales and marketing practices at the Time of Sale along with any relevant training material; 2. The provision of information by the Supplier at the Time of Sale, including the contractual documentation and disclaimers made by the Supplier; 3. The commission arrangements between the Lender 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 Mrs N and the Lender. The Supplier’s sales & marketing practices at the Time of Sale Mrs N’s complaint about the Lender being party to an unfair credit relationship was and is made for several reasons. They include, for various reasons, the allegation that the Supplier misled Mrs N and carried on unfair commercial practices under Regulations 5 and 6 of the CPUT Regulations. However, as Regulations 5 and 6 state, commercial practices only amount to misleading actions or omissions if, in addition to satisfying one or more of the specific matters set out in those provisions, they cause or

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are likely to cause the average consumer to take a transactional decision they would not have taken otherwise. And as I haven’t seen enough evidence to persuade me that, if there were any such actions or omissions at the Time of Sale (which I make no formal finding on), they led Mrs N to make the purchasing decision she did, I’m not persuaded that anything done or nor done by the Supplier amounted to an unfair commercial practice for the purposes of those provisions. The PR also alleges that the Supplier acted unfairly under Regulation 7 Schedule 1 of the CPUT Regulations. But given the limited evidence in this complaint, I am not persuaded that the Supplier did. In addition, the PR also says that: 1. Mrs N was pressured by the Supplier into purchasing Fractional Club membership at the Time of Sale. 2. there were one or more unfair contract terms in the Purchase Agreement. I acknowledge that Mrs N may have felt weary after a sales process that went on for a long time. But she says little about what was said and/or done by the Supplier during the sales presentation that made her feel as if she had no choice but to purchase Fractional Club membership when she simply did not want to. She was also given a 14-day cooling off period and she has not provided a credible explanation for why she did not cancel the membership during that time. Mrs N’s statement falls some way short of being persuasive on this point regarding this sale. And with all of that being the case, there is insufficient evidence to demonstrate that Mrs N made the decision to purchase Fractional Club membership because her ability to exercise that choice was significantly impaired by pressure from the Supplier. 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 against Mrs N in practice, nor that any such terms led her to behave in a certain way to her detriment. And with that being the case, I’m not persuaded that any of the terms governing Fractional Club membership are likely to have led to an unfairness that warrants a remedy. It was said in the Letter of Complaint that Fractional Club membership had been misrepresented by the Supplier at the Time of Sale because it said that Fractional Club membership was an “investment” when that was not true. It was also said that the holiday accommodation had been “secured.” The PR says there are other misrepresentations but doesn’t explain what they are or why they make a difference. However saying to prospective members that they were investing doesn’t strike me as a misrepresentation even if such representations 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 property is 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 Mrs N acquired such an interest. So I’m not persuaded this interest in the allocated property wasn’t secured within the terms of the membership. So, while I recognise that Mrs N - and the PR - have concerns about the way in which Fractional Club membership was sold by the Supplier they fall some distance short of persuading me that there were material misrepresentations here which led to the credit relationship being unfair. Overall, therefore, I don’t think that Mrs N’s credit relationship with the Lender was rendered unfair to her 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 her. And that’s the suggestion that Fractional Club membership was marketed and sold to her 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

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The Lender does not dispute, and I am satisfied, that Mrs N’s Fractional Club membership met the definition of a “timeshare contract” and was a “regulated contract” for the purposes of the Timeshare Regulations. Regulation 14(3) of the Timeshare Regulations prohibited the Supplier from marketing or selling Fractional Club membership as an investment. This is what the provision said at the Time of Sale: “A trader must not market or sell a proposed timeshare contract or long-term holiday product contract as an investment if the proposed contract would be a regulated contract.” But the PR says that the Supplier did exactly that at the Time of Sale – saying, in summary, that she was told by the Supplier that the Fractional Club membership was the type of investment that would only increase in value. The term “investment” is not defined in the Timeshare Regulations. But for the purposes of this provisional decision, and by reference to the decided authorities, an investment is a transaction in which money or other property is laid out in the expectation or hope of financial gain or profit. A share in the Allocated Property clearly constituted an investment as it offered Mrs N 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 Fractional Club membership was marketed or sold to Mrs N 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 her as an investment, i.e. told her or led her to believe that Fractional Club membership offered her the prospect of a financial gain (i.e., a profit) given the facts and circumstances of this complaint. There is competing evidence in this complaint as to whether Fractional Club membership was marketed and/or sold by the Supplier at the Time of Sale as an investment in breach of regulation 14(3) of the Timeshare Regulations. On the one hand, it is clear that the Supplier made efforts to avoid specifically describing membership of the Fractional Club as an ‘investment’ or quantifying to prospective purchasers, such as Mrs N, the financial value of their share in the net sales proceeds of the Allocated Property along with the investment considerations, risks and rewards attached to them. 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 equally possible that Fractional Club membership was marketed and sold to Mrs N 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 found that it was possible that the Supplier breached Regulation 14(3) of the Timeshare Regulations at the Time of Sale, I now need to consider what impact that breach had on the fairness of the credit relationship between Mrs N and the Lender under the Credit Agreement and related Purchase Agreement as the case law on Section 140A makes it clear that regulatory breaches do not automatically create unfairness for the purposes of that provision. Such breaches and their consequences (if there are any) must be considered in the round, rather than in a narrow or technical way. Indeed, it seems to me that, if I am to conclude that a breach of Regulation 14(3) led to a credit relationship between Mrs N and the Lender that was unfair to her and warranted relief as a result, whether the Supplier’s breach of Regulation 14(3) led her to enter into the Purchase Agreement and the Credit Agreement is an important consideration. But on my reading of the evidence before me, the prospect of a financial gain from Fractional Club membership was not an important and motivating factor when Mrs N decided to go ahead with this purchase. I say this because in the letter of claim there’s no persuasive description of how this membership was marketed and sold in Mrs N’s specific purchase, or that the prospect of investment gain was a motivation as a result. I’ve considered the undated, unsigned statement which has been submitted in this case and although this statement alleges the membership was sold as an investment it gives little persuasive detail as to how this happened and what Mrs N’s motivations were at the time. And the overall tenor of this statement bears notable differences in argument compared to the letter of claim. I’ve also considered the sales notes from the Supplier from the time and note that Mrs N had been recommended by an existing member. It is noteworthy that the contemporaneous note of the sale states: “Said they made decision before the presentation and confirm with today’s info they are more confident than ever to get full mmbship.” (shorthand for ‘membership’ to my mind). I also note that the Supplier has pointed to correspondence from Mrs N (whilst complaining to the Supplier about availability) which says that they only bought the membership for holidays during the school holidays. So in summary across the statement and letter of claim and the evidence more broadly I’m not persuaded she’s said enough for me to fairly conclude that the prospect of financial gain was an important or motivating factor here. This doesn’t mean she wasn’t interested in a share in the Allocated Property. After all, that wouldn’t be surprising given the nature of the product at the centre of this complaint. But as Mrs N doesn’t persuade me that her purchase was motivated by the share in the Allocated Property and the possibility of a profit, I don’t think any breach of Regulation 14(3) by the Supplier was likely to have been material to the decision she 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 Mrs N’s decision to purchase Fractional Club membership at the Time of Sale was motivated by the prospect of a financial gain (i.e., a profit). On the contrary, I think the evidence suggests she would have pressed ahead with the purchase whether or not there had been a breach of Regulation 14(3). And for that reason, I do not think the credit relationship between Mrs N and the Lender was unfair to her even if the Supplier had breached Regulation 14(3). The provision of information by the Supplier at the Time of Sale The PR says that Mrs N were not given sufficient information at the Time of Sale by the Supplier about the ongoing costs of Fractional Club 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.

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I acknowledge that it is also possible that the Supplier did not give Mrs N sufficient information, in good time, on the various charges they could have been subject to as Fractional Club members 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. And as neither Mrs N nor the PR have persuaded me that she would not have pressed ahead with the purchase had the finer details of the Fractional Club’s ongoing costs been disclosed by the Supplier in compliance with Regulation 12, I cannot see why any failings in that regard are likely to be material to the outcome of this complaint given its fact and circumstances. The PR also says that a payment of commission from the Lender to the Supplier at the Time of Sale should lead me to uphold this complaint because, simply put, information in relation to that payment went undisclosed at the Time of Sale. As both sides already know, the Supreme Court handed down an important judgment on 1 August 2025 in a series of cases concerned with the issue of commission: 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 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 Mrs N in arguing that her credit relationship with the Lender was unfair to her, for reasons relating to commission given the facts and circumstances of this complaint.

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As the Supreme Court said in paragraph 326 of its judgment in Hopcraft, Johnson and Wrench, it’s not possible to simply apply the reasoning of the Supreme Court in Plevin v Paragon Personal Finance Ltd [2014] UKSC 61 (‘Plevin’) to this complaint (as the PR does) when it’s concerned with a product and marketplace that were very different to those in Plevin. What’s more, Mrs N was provided with information as to the price of Fractional Club membership and the cost of the Credit Agreement (interest rate, fees, APR and monthly repayments). So, she was at least in a position from which she could understand the cost of the Credit Agreement and compare it with other options that might have been available at the Time of Sale. 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 Mrs N, nor have I seen anything that persuades me that the commission arrangement between them gave the Supplier a choice over the interest rate that led Mrs N 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, the case law on Section 140A makes it clear that regulatory breaches do not automatically create unfairness for the purposes of that provision. Such breaches and their consequences (if there are any) must be considered in the round, rather than in a narrow or technical way. And with that being the case, it isn’t necessary to make a formal finding on that because, even if the Lender and the Supplier failed to follow the relevant regulatory guidance at the Time of Sale, it is for the reasons set out below that I don’t currently think any such failure is itself a reason to find the credit relationship in question unfair to Mrs N. In stark contrast to the facts of Mr Johnson’s case, the amount of commission paid by the Lender to the Supplier for arranging the Credit Agreement that Mrs N entered into wasn’t high. At £435.82, it was only 2.5% of the amount borrowed and even less than that (2.3%) as a proportion of the charge for credit - which was the figure the Supreme Court used. So, had she known at the Time of Sale that the Supplier was going to be paid a flat rate of commission at that level, I’m not currently persuaded that she either wouldn’t have understood that or would have otherwise questioned the size of the payment at that time. After all, Mrs N wanted Fractional Club membership and at such a low level, the impact of commission on the cost of the credit she needed for a timeshare she wanted doesn’t strike me as disproportionate. So, I think she would still have taken out the loan to fund this purchase at the Time of Sale had the amount of commission been disclosed bearing in mind the ease and flexibility of this payment method. What’s more, based on what I’ve seen so far, the Supplier’s role as a credit broker wasn’t a separate service and distinct from its role as the seller of timeshares. It was simply a means to an end in the Supplier’s overall pursuit of a successful timeshare sale. I can’t see that the Supplier gave an undertaking – either expressly or impliedly – to put to one side its commercial interests in pursuit of that goal when arranging the Credit Agreement. And as it wasn’t acting as an agent of Mrs N but as the supplier of contractual rights she obtained under the Purchase Agreement, the transaction doesn’t strike me as one with features that suggest the Supplier had an obligation of ‘loyalty’ to her when arranging the Credit Agreement and thus a fiduciary duty. Overall, therefore, I’m not currently persuaded that the commission arrangements between the Supplier and the Lender were likely to have led to a sufficiently extreme inequality of knowledge that rendered the credit relationship unfair to Mrs N. 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 Mrs N and the Lender under the Credit Agreement and related Purchase Agreement was unfair to her. And as things currently stand, I don’t think it would be fair or reasonable that I uphold this complaint on that basis.

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Commission: The Alternative Grounds of Complaint While I’ve found that Mrs N credit relationship with the Lender wasn’t unfair to her for reasons relating to the commission arrangements between it and the Supplier, two of the grounds on which I came to that conclusion also constitute separate and freestanding complaints to Mrs N’s complaint about an unfair credit relationship. So, for completeness, I’ve considered those grounds on that basis here. The first ground relates to whether the Lender is liable for the dishonest assistance of a breach of fiduciary duty by the Supplier because it took a payment of commission from the Lender without telling Mrs N (i.e., secretly). And the second relates to the Lender’s compliance with the regulatory guidance in place at the Time of Sale insofar as it was relevant to disclosing the commission arrangements between them. However, for the reasons I set out above, I’m not persuaded that the Supplier – when acting as credit broker – owed Mrs N a fiduciary duty. So, the remedies that might be available at law in relation to the payment of secret commission aren’t, in my view, available to them. And while it’s possible that the Lender failed to follow the regulatory guidance in place at the Time of Sale insofar as it was relevant to disclosing the commission arrangements between it and the Supplier, I don’t think any such failure on the Lender’s part is itself a reason to uphold this complaint because, for the reasons I also set out above, I think she would still have taken out the loan to fund this purchase at the Time of Sale had there been more adequate disclosure of the commission arrangements that applied at that time. Overall 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 Mrs N’s Section 75 claim. I am not persuaded that the Lender was party to a credit relationship with her under the Credit Agreement and related Purchase Agreement that was unfair to her 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 Mrs N. I didn’t find any of the arguments put forward demonstrated that the credit agreement between Mrs N and the Lender was unfair to her under section 140A of the CCA. Absent any other reason why it would be fair or reasonable to direct the Lender to compensate Mrs N, I said I didn’t propose to uphold the complaint. Responses to my provisional findings The Lender accepted my provisional decision. The PR didn’t accept the proposed outcome. It made further submissions in support of Mrs N’s position. Having received and reviewed these, I’m now proceeding with my final decision. The legal and regulatory context The legal and regulatory context that I think is relevant to this complaint has been shared in several hundred published decisions on very similar complaints, as well as in previous correspondence with the parties. So there’s no need for me to set this out again in detail here. I simply remind the parties that our rules1 say that in considering what is fair and reasonable in all the circumstances of the complaint, I will take into account: relevant (i) law and regulations; (ii) regulators’ rules, guidance and standards; and (iii) codes of practice; and (where appropriate), what I consider to have been good industry practice at the relevant time. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and 1 Financial Conduct Authority (“FCA”) Handbook – DISP 3.6.4R (“R” denotes a rule).

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reasonable in the circumstances of this complaint. After considering the case afresh and having regard for what’s been said in response to my provisional decision, I find it offers no persuasive reason to depart from the conclusions I’ve previously set out. I’ll explain why. The PR originally raised various points of complaint, such as those giving rise to Mrs N’s section 75 claim, which I addressed in my provisional decision. In its response, it hasn’t made any further comments in relation to most of its original points, or said anything that leads me to think it disagrees with my provisional conclusions in relation to those points. So I’ll focus here on the points the PR has made in response. The PR’s response to my provisional decision relates mainly to the issue of whether the credit relationship between Mrs N and the Lender was unfair per section 140A of the CCA. In particular, the PR has provided more comment in relation to whether the membership was sold to Mrs N as an investment at the Time of Sale. It has also made further submissions in support of its position that the payment of a commission by the Lender to the Supplier led to an unfair credit relationship between the Lender and Mrs N. Section 75 The PR says it disagrees with my position regarding the Limitation Act due to deliberate concealment, that is it seeks to rely on s32 of the CCA in this regard. Yet it has not produced any persuasive evidence of this. Accordingly I think the Lender is fair in applying six years from the cause of action accruing. And I see no persuasive reason from the PR’s response to my provisional decision to deviate from my findings therein. Section 140A of the CCA: did the Lender participate in an unfair credit relationship? The Supplier’s alleged breach of Regulation 14(3) of the Timeshare Regulations The PR has questioned whether my provisional conclusions run contrary to precedent decisions issued by my ombudsman colleagues and the judgment handed down in Shawbrook and BPF v FOS. I don’t believe they do. However, for the avoidance of doubt, other decisions issued by other ombudsmen do not have a precedent effect like some court judgments might, and each ombudsman must determine each case on its own specific facts. Further, the judgment referred to did not make a blanket finding that all products of the type Mrs N purchased were mis-sold in the way the PR appears to be suggesting. I remind the PR that in my provisional decision I accepted the possibility that Fractional Club membership was marketed and/or sold to Mrs N as an investment, in breach of Regulation 14(3). I went on to explain that relevant case law2 indicates that in considering the question of relief for any resultant unfairness in the credit relationship, I needed to take into account any material impact of such a breach on Mrs N’s decision whether to enter into the Purchase and Credit Agreements. It doesn’t strike me that doing so flies in the face of either the handed down judgment or previous decisions the PR has mentioned. While the PR has referred me to Mrs N’s recollections and the Supplier’s training materials, I have already considered these and what was said. And I set out in my provisional decision the reasons why I didn’t find that evidence sufficiently persuasive that Mrs N’s purchase decision would have been any different, given the other motivational factors he had described. Having re-examined Mrs N’s statement that remains my view, for the reasons previously given. 2 Carney and Kerrigan

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So as I said before whether or not the Supplier marketed or sold Fractional Club membership as an investment in breach of Regulation 14(3), I’m not persuaded Mrs N’s decision to make the purchase was materially impacted by the prospect of a financial gain. It follows that I find the credit relationship between Mrs N and the Lender was not rendered unfair to her for this reason. The provision of information by the Supplier at the Time of Sale The PR has asked for the documents the lender has provided to us to show the commission arrangements. While I appreciate the PR would like to have full disclosure of all of the documents and information the Lender has provided, our rules do not require me to provide this when dealing with a complaint. As the PR has been informed, under DISP 3.5.9R I may, where I consider it appropriate, accept information in confidence (so that only an edited version, summary or description is disclosed to the other party). That is what I have done in my provisional decision. I'm satisfied that agreements between the Lender and the Supplier are commercially sensitive and that the summary information on commission arrangements we've already shared with the PR is appropriate in this case. I see no reason to find that this prejudices any arguments the PR or Mrs N is able to make in support of Mrs N’s position. The PR has demonstrated its ability to present Mrs N’s case and has had sufficient time to consider and make any further arguments. As I’ve noted, the PR has disagreed with my provisional conclusions on whether the Lender should pay redress because of an unfair credit relationship arising in connection with commission arrangements between the Lender and the Supplier. The PR says, in summary, that when the overall circumstances of those arrangements are considered in the round, the credit relationship was plainly unfair. In support of this position the PR has expressed, among other things, that: • The provisional decision doesn’t properly apply the Supreme Court’s judgment in Hopcraft, Johnson and Wrench, which concluded a range of factors informed whether a credit relationship between a consumer and a lender was unfair • A conflict of interest existed on the part of the Supplier, who provided neither independent nor competent explanation of the credit • Failure to disclose payment of commission – irrespective of the size of any payment - was a regulatory breach that goes to the heart of fairness. I appreciate the time the PR has taken to put together its submissions on behalf of Mrs N. But I don’t find what it has said offers persuasive grounds for me to reach a different conclusion on this issue. I’ve previously set out my thoughts on any impact the Supreme Court’s conclusions in Hopcraft, Johnson and Wrench has on Mrs N’s arguments that her credit relationship with the Lender was unfair to her for reasons relating to commission given the facts and circumstances of this complaint. The PR’s response doesn’t offer anything that leads me to think that, for the most part, any of the factors it has referenced were in fact at play in Mrs N’s case. It hasn’t, for example, provided evidence to show the existence of commercial or contractual ties that were concealed from Mrs N, any persuasive reasons to conclude that the Supplier’s role was that of advisor to Mrs N, or to show that any other conflict of interest arose from the roles the Supplier did perform.

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For such a claim to be successful would require more than the bare assertions that have been made in this case. I’m not persuaded that it is sufficient, as the PR seems to contend, simply to suggest unsubstantiated allegations of fact and require that the Lender disprove them else the credit relationship be deemed unfair. This issue was considered in the judgment in Promontoria (Henrico) Ltd v. Gurcharn Samra [2019] EWHC 2327 (Ch) (“Samra”), where HHJ David Cooke held (at para.26): “…the onus is on [the creditor] to show, to the normal civil standard, that the relationship is not unfair because of any of the reasons set out in s 140A(1)(a)-(c). Whether it is so unfair is a matter for the court's overall judgment having regard to all the relevant circumstances and matters, including matters relating (i.e. personal) to the creditor and debtor. This onus on the claimant does not however mean, in my judgement…that where [the borrower alleging an unfair credit relationship] makes allegations of fact on which he relies he does not have the burden of proving them to the normal civil standard. The onus placed on the creditor is as to the relationship between it and the debtor, and does not have the effect that factual allegations made by Mr Samra must be accepted unless they can be positively disproved by contrary evidence.”3 I’m satisfied the Lender has provided sufficient information in response to my enquiries to enable me to reach a conclusion about its commission arrangements with the Supplier. I’ve seen nothing in this case that leads me to think what the Lender has said about the commission arrangements is inaccurate. So there's no reason for me to reach a different finding over those commission arrangements. In its correspondence the PR has emphasised the regulatory breaches connected with a failure to disclose commission payment. I have already set out why in my view this doesn’t automatically lead to an unfair credit relationship for which the Lender needs to offer redress. While I’ve considered all that the PR has submitted, I remain of that view. 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 remain unpersuaded that the credit relationship between Mrs N and the Lender under the Credit Agreement and related Purchase Agreement was unfair to her such that it warrants the Lender offering any redress. Commission: The Alternative Grounds of Complaint In my previous correspondence I mentioned that some of the grounds for complaint about the fairness or otherwise of the credit relationship could also constitute separate and freestanding complaints. I’ll reiterate my findings here. The first ground relates to whether the Lender is liable for the dishonest assistance of a breach of fiduciary duty by the Supplier because it took a payment of commission from the Lender without telling Mrs N (that is, secretly). The second relates to the Lender’s compliance with the regulatory guidance in place at the Time of Sale insofar as it was relevant to disclosing the commission arrangements between them. 3 I further note that in Wilson v Clydesdale Financial Services Ltd t/a Barclays Partner Finance [2021] (Unreported), the court also took the view that the burden is on the debtor to prove on the balance of probabilities the facts that purportedly create the unfairness. It is then that the lender's burden of proof that requires it to prove the relationship was not unfair kicks in. While I do not suggest this offers legal precedent, the subject matter of that case was a fractional timeshare sale, and given the similarities seems to me an appropriate approach when considering the facts in this case.

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For the reasons I set out previously, I’m not persuaded that the Supplier – when acting as credit broker – owed Mrs N a fiduciary duty. So, the remedies that might be available at law in relation to the payment of secret commission aren’t, in my view, available to her. And while it’s possible that the Lender failed to follow the regulatory guidance in place at the Time of Sale insofar as it was relevant to disclosing the commission arrangements between it and the Supplier, I don’t think any such failure on the Lender’s part is itself a reason to uphold this complaint. For the reasons I have also previously set out, I think he would still have taken out the loan to fund her purchase at the Time of Sale had there been more adequate disclosure of the commission arrangements that applied at that time. Conclusion After careful reconsideration of the facts and circumstances of this complaint, I adopt my provisional conclusions as part of my final decision. For the reasons I’ve given above and in my earlier correspondence I’ve mentioned, I don’t think the Lender acted unfairly or unreasonably when it dealt with Mrs N’s section 75 claim. And I’m not persuaded that the Lender was party to a credit relationship with Mrs N that was unfair to her 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 for me to direct the Lender to compensate Mrs N. My final decision For the reasons set out above, my final decision is that I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs N to accept or reject my decision before 11 May 2026. Rod Glyn-Thomas Ombudsman

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