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On 1 August 2018, a Judge sitting in the Upper Tribunal (Tax and Chancery Chamber) in Plaxedes Chickombe and others v FCA and others [2018] UKUT 0258 (TCC) made what could be a landmark decision which, depending on how matters furher develop could have wide ranging ramifications for banks who provided consumer credit finance to consumers purchasing timeshares.

 The Judge was asked to consider a number of determinations made by the FCA under section 28A of the Financial Services and Markets Act 2000 (FSMA) on 5 February 2018 (validation order).

FCA validation order

The validation order was made by the FCA following an application by Clydesdale Financial Services Ltd trading as Barclays Partner Finance (BPF)

 The validation order related to some 1,444 loan agreements entered into by BPF with consumers to assist them in purchasing timeshares from a leading timeshare developer, Azure Resorts. According to the Judgment, the validation order related to loans issued by BPF between April 2014 to April 2016. The total loan of the concerned loans amounted to £47 million, and eyewatering £32,500 per transaction!

The loan agreements are regulated consumer-debtor-supplier agreements used to finance the purchase of timeshares from a group of companies known as Azure Resorts.

 According to the Judgment BPF had made disclosure to the FCA that the loan agreements in question had been were brokered Azure Services Ltd, part of the Azure Group. Azure Services Limited was not an FCA authorised broker, and there had therefore been a breach of the general prohibition in section 19 of FSMA.

 Pursuant to section 27(1), (1A) and (2) of FSMA, the fact the regulated credit agreements were made in consequence of something said or done by a third party in breach of the general prohibition rendered them unenforceable against the borrowers and entitled the borrowers to recover money or property transferred to BPF under them.

 In order to rectify the situation BPF made an application to the FCA for a determination under section 28A of FSMA and relief from the consequences of the provisions of section 27. In the absence of such a determination BPF would be unable to enforce the regulated credit agreements and may have been obliged to compensate consumers for their losses.

Having considered the application by BPF, the FCA duly made the validation order. The basis of the validation order was that the FCA considered it just and equitable for the loan agreements to be enforceable as against the consumers because BPF.

  1. Did not intentionally breach FSMA, and the prohibition against dealing only engage with authorised parties when entering into loan agreements with consumers. making the regulated credit agreements. BPF explained to the FCA that the beach had been unintentional as it did not have full knowledge of Azure’s corporate structure or the specific entity that was authorised to provide broking services.
  1. The FCA accepted submissions from BPF that there had been no consumer detriment caused by the fact that Azure Services limited had not been-authorised at the time the loan agreements had been entered into, and that consumers would not have been treated differently had Azure been properly regulated.
  1. Had amended its procedures to ensure that staff were better trained, that brokers were properly identified and regulated. 

References made to tribunal

Following the making of the Validation Order, consumers that had been potentially affected were notified. A number of these consumers exercised their right to make a reference of the validation order to the tribunal pursuant to section 28B(3) of FSMA. These consumers all allege that they had in fact suffered detriment arising from the broker’s conduct in connection with entering into the regulated credit agreements.

The main allegations made by the consumers, to demonstrate detriment, are that:

  1. The terms of the loans were not fully explained to them before they were signed.
  1. Proper credit checks were not carried out.
  1. They were not given adequate time to consider the terms of the proposed loans.
  1. They were subject to high pressure selling.
  1. False representations were made by the broker relating to the financial impact of the regulated credit agreements.
  1. They were not properly informed, or were misled, or both, as to the duration of the regulated credit agreements.
  1. Many were vulnerable consumers who had been treated inappropriately.
  2. They have concerns about undisclosed commission.

FCA’s position

The FCA had not been made aware of the allegations of detriment before making the validation order and had accordingly not had an opportunity to take the same into account before making the validation order.

The FCA asked the tribunal to remit the matter to it (pursuant to section 133(6) of FSMA), so it could reconsider it on the basis that the concerns raised by the references were matters that should be taken into account in deciding whether to grant the validation order.

The FCA contended that, although section 133 of FSMA was silent on the issue, the effect of remission would be that the validation order would cease to have effect from the date of the tribunal’s order.

BPF’s position

BPF initially opposed the matter being remitted.

It submitted that the references should be dismissed on the basis that consumer detriment was not relevant to the exercise of the section 28A FSMA power.

BPF subsequently changed its position because it identified information that could have affected what it knew (or ought to have known) about the broker. It accepted that the matter should be remitted to the FCA for reconsideration, but maintained its position that a validation order should be granted.

It contended that, in deciding whether to grant a validation order, the FCA should only consider whether consumers suffered a detriment as a result of the broker’s unauthorised status, which was the position the FCA took when giving its reasons for making the validation order. BPF considered that no consumer detriment was caused as the way the broker conducted its credit broking activities.

BPF also argued that, the validation order should not be quashed until such times as the FCA had an opportunity to reconsider its decision.

Issues for tribunal to determine

The parties agreed that Herrington J should remit the matter to the FCA and make directions as to the matters the FCA should take into account in reconsidering its decision. The only issues in dispute were:

  1. The extent to which the direction should require consumer detriment to be taken into account, and whether there should be any limitations on what the FCA should be directed to consider in this regard.
  1. Whether the effect of a direction to the FCA to reconsider its decision meant the existing validation order ceased to have effect, with the result that the regulated credit agreements would become unenforceable again.

Tribunal decision

Herrington J determined the references in favour of the borrowers and remitted the matter to the FCA to reconsider its decision to issue the validation order. In doing so he directed that the FCA had to take consumer detriment into account in reconsidering whether or not to make the validation order and significantly, that there should be no limit as to the scope of what it should consider.

Herrington J considered that it was not necessary to direct the FCA to take any particular procedural steps in assessing the weight to be given to consumer detriment when reconsidering its decision. The FCA has a general public law duty to act fairly in this regard. It is expected to put in place a suitable procedure for soliciting and obtaining evidence of consumer detriment from relevant consumers within a given timescale, taking account of the fact that a considerable amount of evidence has already been provided through the references and other communications the FCA has had with consumers. BPF must also be given the opportunity to make representations on that evidence, and the steps it has taken to address any consumer detriment alleged.

BPF agreed not to enforce any of the subject loan agreements until after the FCA had made a decision as to whether or not to make the validation order, taking into account consumer detriment.

What now?

Clearly matters will take some time reach a conclusion. The FCA will have to consider consumer detriment. If following that determination, a validation order is not made, the BPF loans will be unenforceable and consumers will be entitled to compensation.

The case is however of wider application. Thousands of UK consumers have entered into loan agreements brokered by timeshare developers. Athena has identified that a number of these developers (in addition to Azure) have brokered loan agreements without being FSMA regulated.

At Athena Law we get regular enquiries from timeshare owners, many of whom are making similar complaints, namely:

  • Escalating Maintenance Fees.
  • Being trapped in a product they no longer want, in perpetuity.
  • Feeling that the product was mis-sold, and that what they have purchased is worthless.
  • Being left with large loans taken out to purchase “cheap holidays for life”.
  • Essentially, having purchased something they thought was an asset and which in reality has little or no resale value.

The writer has dealt with many hundreds of these cases over the years. In every case the timeshare resorts and the banks deny liability as a matter of course. Given that timeshare salesmen are remunerated heavily on commission, it is frightening that they have been allowed to act as credit brokers for the banks.

How Athena Law differs from Claims Companies

We are aware of a number of timeshare claims companies on the internet. The majority of these companies are not Lawyers. They are claims management companies. Such companies serve a purpose, but the consumer needs to understand that if they employ a claims management company they will inevitable be paying more to bring a claim if they deal direct with the lawyers. This is common sense.

How Athena Law can help

Athena are solicitors, and experts in timeshare law and UK Finance Claims.

We can quickly, and without charge, review your case and determine if you have grounds for terminating your timeshare and if you have a claim for compensation.

If you have grounds to terminate your timeshare and/or to bring a compensation claim we can offer you a fixed fee and/or no win no fee service.


Stephen Boyd is one of the owners and co-founders of Athena Law, a firm of solicitors regulated by the Law Society and the Solicitors Regulatory Authority.

Mr. Boyd has been practising in commercial and consumer litigation for 17 years and has developed a niche practice in dealing with timeshare disputes and indeed was one of the first UK Solicitors to work in this area and has appeared in all forms of media including television, print and radio.

Links to his work can be found below. Alternatively they can be accessed from the Athena Law website,, or its subsidiary site specialising in timeshare issues,    

BBC Scotland Timeshare Timebomb

BBC Radio 5 Live Investigates

Talk Radio – Stephen Boyd discusses Timeshare contracts in perpetuity

The Telegraph – Hope for people locked in costly Timeshare contracts  

Contact Us for a FREE initial consultation

If you need any advice or further information regarding this article please contact us.

We offer a free initial consultation and if clients have a viable claim we offer a variety of retainer options including no win no fee arrangements. Every case or potential case will have to be assessed on its own merits.

If you have found this article interesting and would like to learn more about how Athena Law can help you, please feel free to contact the writer, Stephen Boyd, at, or via the contact page on the Timeshare website.  

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