Hundreds of timeshare owners contact us that have taken out loans with Barclays Partner Finance, Shawbrook Bank, Hitachi Personal Finance, Honeycomb Finance and First Holiday Finance. These linked finance loans were provided for the sole purpose of funding the purchase of timeshare products by resorts such as; Silverpoint, Azure Resorts; Anfi, Club La Costa; Diamond Resorts; and MGM. In 2007 the Consumer Credit Act introduced the "unfair relationship" concept in respect of credit agreements. This replaced the former "extortionate credit bargain regime".
Previously, the court had the power to reopen the credit agreement if it found a "credit bargain" was such that it required the debtor to make payments which were "grossly exorbitant" or otherwise "grossly contravene ordinary principles of fair dealing".
In practice, the courts were generally slow to intervene, and these provisions were therefore rarely invoked and, even more seldom, produced a successful outcome for the debtor.
In 2003 the department for trade and industry published a white paper highlighting that it should be easier for consumers to challenge unfair credit agreements. And that the definition of "extortionate" should be widened to cover unfair practices, both at the point of sale and subsequent events that may have led to unfairness. These proposals formed the basis of the unfair relationship provisions in the Consumer Credit Act test.
The unfair relationship test is set out in section 140A of the Consumer Credit Act.
It permits the court to make an order under section 140B if it determines that the relationship between a creditor and debtor arising out of the agreement (or related agreement) is unfair to the debtor based on one or more of the following:
- Any of the terms of the agreement or any related agreement
- How the creditor has exercised or enforced any of his rights under the agreement or any related agreement;
- Any other thing done (or not done) by, or on behalf of, the creditor (before or after making the agreement or any related agreement).
Contrary to the normal position that 'he who asserts must prove, where the debtor alleges that the relationship is unfair, it is for the creditor to prove that it is not.
The provisions apply to regulated and unregulated credit agreements, and section 140A gives the court a broad discretion to "have regard to all matters it thinks relevant". The discretion applied by the court has proved the unfair relationship regime to have a wide-reaching effect.
Most of our timeshare finance claims are submitted under Section 140A, and we have had great success. Over the last ten years, we have had a continuous battle with the Finance companies and the timeshare industry to get justice for our clients—much the same as when the propaganda machines were rolled out for the PPI scandal.
The sheer weight of proof presented by companies like ours has led to groundbreaking results for our clients. Get in touch if you want to make a No Upfront Fee claim.
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