The Los Angeles city attorney alleged an unlicensed contractor used a government-established loan program to defraud low-income consumers by misleading them into taking unaffordable financing and by abandoning incomplete jobs, the Los Angeles Times reports. City attorney Mike Feuer alleged Eco Solar Home Improvements and affiliated companies defrauded homeowners out of at least $1.4 million by incorrectly using the Property Assessed Clean Energy (PACE) Program. PACE is typically reserved for environmentally friendly projects or safety improvements, according to the Los Angeles Times.
PACE loan programs are funded through private lenders but must be set up by local authorities, because payments are made through property taxes. Local governments establish the unique financing mechanism to reduce greenhouse gases, though authorities and their private lender partners have drawn sharp criticism in recent years because lenders rely on home improvement contractors to sign up consumers.
Consumer advocates allege those contractors often misled homeowners over how the loans work. According to Feuer’s lawsuit, Eco Solar targeted Spanish speakers through advertisements that promised to “convert their garage into the best home to rent.”
Unlicensed salespeople then used “high-pressure in-home sales tactics, misrepresentations and false promises” to sign consumers up for PACE, the lawsuit says. At times Eco Solar falsely said a government program would cover all costs or that rental income would help cover loan payments, even though it had “no intention to fully perform” work it promised, the lawsuit alleged.
Some jobs were never started, while others were abandoned midway, the lawsuit alleged, leaving homeowners stuck with open trenches and “nothing but tarps left to protect large portions of their homes.”
The case involves 35 alleged victims across the state of California, according to Feuer's lawsuit.
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