Back in June 2018, at the Royal Courts Of Justice in London, a case was brought against the Financial Conduct Authority (FCA), regarding a validation order they issued to Barclays Partner Finance to legalise loan agreements made by Azure Services Ltd. These loans were brokered between 1 April 2014 and 24 April 2016 and involve around 1,444 clients, introduced by Azure sales staff for loan agreements to pay for the sale of Azure timeshare in Malta. At the time Azure Services were not authorised to broker the loans. The case was brought against the FCA as they validated these agreements which are detrimental to the clients.
An appeal was made by the clients and their representatives to the Upper Tribunal Tax and Chancery Division of the Royal Courts of Justice for a hearing on the legal implications and guidance to overturn the validation order.
The case was heard by Judge Timothy Herrington, he eventually made his ruling in August 2018.
He ruled that the FCA did not take into account “Client Detriment” when they issued the validation order, his ruling was that the FCA re-evaluate that decision and take into account the client detriment.
He stated that the client detriment revolves around the following:
- Clients were not given sufficient information as to the terms and conditions of the loan agreement required by law;
- There were no major credit checks made as to the affordability of the repayments such as income versus outgoings reports;
- The length of the loan agreements were not explained, with the client under the impression that they were for two years;
- Clients were pressured into signing these agreements;
- False representations were made to clients relating to the financial impact of regulated agreements;
- Clients were subject to long high-pressure sales tactics to purchase the timeshares;
- Clients were sold timeshares which were not appropriate for them;
- Vulnerable consumers were treated inappropriately;
- Concerns about commission arrangements and disclosure thereof.
The FCA had then to re-examine the original validation order and take into account the client detriment statements of the borrowers.
Inside Timeshare has now learned that the FCA has finally made their decision and it is not what we were expecting, going by Judge Timothy Herrington’s ruling, it was expected that the FCA would overturn their validation order which would have made these loans unenforceable in the event of any default in payments.
The FCA it appears have sided with Barclay Partner Finance and validated these loan agreements which means they are now enforceable in law for any default. This is a decision which will surely have all 1,444 clients involved feeling very annoyed and totally let down by the FCA.
Inside Timeshare is at a complete loss as to why these loan agreements have been validated, it does make us wonder if these authorities such as the FCA are actually there to protect consumers or just playing lip services to them while actually being on the side of the financial institutions!
As more information becomes available Inside Timeshare will keep you informed. Please see the links below for the original stories.