Minnesota AG Sues Solar Lending Companies Over Hidden Fees

On March 8, 2024, the Minnesota Attorney General announced that it had filed a lawsuit against four solar companies for allegedly violating Minnesota Prevention of the Consumer Fraud Act (“MCFA”), the Uniform Deceptive Trade Practices Act, the False Statement in Advertising Act (“FSAA”), and Chapter 56 of the Minnesota Regulated Loan Act. The attorney general’s office purports that these companies deceived consumers into taking out loans containing disguised hidden fees on more than 5,000 solar-panel purchases in Minnesota.

According to the complaint​ filed in Minnesota state court,​ the hidden fees placed on solar-panel purchases allegedly increased the costs that borrowers incurred by between 15% and 30%, for a total of $35 million since 2017. These practices also allegedly “skewed sales towards the lenders’ financing, prevented comparison shopping, and gave the lenders and partner solar installers an inflated share of the market at the expense of businesses that do not use the hidden-fee model.”

The attorney general’s office further claims the lenders engaged in misrepresentation by making statements that loan repayment obligations are independent of the actions caused by the solar company that partnered with those lenders and sold the system. These misrepresentations were allegedly intended to induce Minnesota consumers to rely on them and believe they had no defense to repayment. Additionally, the complaint alleges that the lenders violated sections 56.12 and 56.14(1) (and alternatively section 47.59) of the Minnesota Regulated Loan Act, by failing to disclose their upfront fees in the initial loan documents.

The attorney general’s office is seeking, among other remedies, civil penalties pursuant to Minn. Stat. § 8.31 for each separate violation of Minnesota law in addition to restitution, disgorgement, injunctive and declaratory relief.