Attempt to cut down on energy bills turns into financial nightmare for Beaver Falls man
PITTSBURGH (KDKA) — An attempt to cut down on energy bills turned into a financial nightmare for a Beaver Falls man.
The state's Bureau of Consumer Protection received 87 complaints in 2020 about solar companies. This year, it has received 227 complaints. And as the industry grows in our area, consumers need to know the red flags to look out for.
Beware of predatory sales tactics
Solar panels cover Larry Minnitti's Beaver Falls home, but he said he would do anything to give them back.
"I'm left hanging, but I don't want this to happen to somebody else," he said.
He feels victimized by predatory sales tactics and said he signed on the dotted line for something he can't afford.
"It's like they presented everything on a tablet," Minnitti said. "And once you signed it, all they did was flip to the next page. And all you had to do is touch the screen and it put your signature there."
"You never had time to physically read the entire agreement," he added.
He said he thought he agreed to 20 years of affordable payments with Palmetto Solar, but he later learned he agreed to what's called a balloon payment with Palmetto Solar's lender at the time, Sunlight Financial.
"Then they put this clause in the contract about the voluntary payment," Minnitti said. "And if you don't make that voluntary $18,000 payment, my solar panel payment doubles from like $370 to almost $570."
KDKA Investigates contacted Palmetto Solar to question the sales tactics Minnitti claims happened at his front door. Palmetto Solar said the salespeople who dealt with Minnitti worked for a third-party sales partner called Lifestyle Marketing.
"In this case, a deal structure error was made that should never have been presented," Palmetto Solar said.
"We apologize to Mr. Minnitti for what appears to be a subpar experience in this instance," Palmetto Solar added. "As part of our standard operating procedure, we communicated directly with the customer and have now fully resolved this issue."
Diane Thompson with the Consumer Financial Protection Bureau said a rise in solar complaints led the bureau to release a nationwide consumer advisory on predatory solar lending.
The bureau found four areas of risk for consumers: hidden markup fees, misleading claims about what consumers will pay, ballooning monthly payments and exaggerated savings claims
"The first are hidden markup fees," Thompson said. "And so those are the cases where the panel installer is working in cahoots with a lender. So, they agree to give the lender a kickback, often as much as 30 percent."
Thompson said they'll also mislead the customer as to what they'll pay, often promising a federal tax credit that'll cover upfront costs. But Minnitti learned the hard way that not everyone qualifies.
"It's a tax credit, so it's based on your income," Minnitti said. "It would take me five years to come up with the $18,000 through the government, not 18 months."
And when it comes to those ballooning monthly payments.
"Anytime you rely on the person who's selling you a good or service to also arrange your financing, that's a red flag right there," Thompson said. "You will almost always pay more in those circumstances."
Thompson said consumers who find themselves in this type of deal and want to get out of it should act fast before the payment balloons.
"Probably the easiest way is to go to a local financial institution ... and see if they can get a home equity loan or line of credit and refinance the whole thing," Thompson said.
Palmetto Solar said it has since changed its financial lending process, successfully serving more than 30,000 clients over the past 15 years.
So now that we know what not to do, here's what to do:
- Do refuse to sign anything without getting time to compare offerings among different contractors and different lenders.
- Do get your financing separate from the person who is selling the product or service.
- Do get copies of anything you're signing.
