We get a lot of enquires from Timeshare owners that have taken out loans with Barclays Partner Finance and Shawbrook Bank , amongst others. These unsecured loans were provided to the consumer by the Timeshare company to purchase Timeshare or Fractional memberships.

Companies such as Silverpoint , Club La Costa and Azure Resorts have been the main protagonists over the past ten years.

The "unfair relationship" concept in respect of credit agreements was introduced into the Consumer Credit Act of 1974 in 2007.

The unfair relationship provisions 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 rarely produced a successful outcome for the debtor.

The Department for Trade and Industry proposed in its 2003 White Paper that it should be easier for consumers to challenge unfair agreements, and that the definition of 'extortionate' should be widened to cover unfair practices both at the time of entering the credit agreement as well as any 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 of any related agreement

• The way in which 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 (either before or after making of 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 both 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 wide reaching effect.

If you borrowed money to purchase your Timeshare or Fractional membership and feel that you were mis sold then you probably were.

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