March 31, 2023


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2 more Tesla Solar customers file lawsuit over unauthorized loans

  • Two additional customers have come forward to say Tesla and Equifax reported loans they never applied for. 
  • Both customers signed “power purchase agreements,” common deals for solar installations.
  • But years later, massive loans appeared on their credit reports, according to the lawsuits, hurting their scores and affecting their ability to refinance their mortgages. 
  • Visit Business Insider’s homepage for more stories.

Two more customers of Tesla’s home solar-energy system have filed a lawsuit claiming the company destroyed their credit by reporting loans they never asked for.

Yi Lee signed a deal with Solar City in 2014 to put solar panels on his Rowland Heights, California home, he said in a lawsuit filed in federal court on Tuesday. He did not purchase the panels outright from Solar City, which was acquired by Tesla in 2016. Instead, he used a common “power purchase agreement,” in which the company maintains ownership of the system and sells the electricity to Lee for a pre-set rate.

“This is not a loan,” he said in the complaint, adding that he “chose this type of arrangement to ensure that the solar system would not reflect on his debt to income ratio, or report on his credit report as he manages these carefully.”

But, much like a previous suit filed in October by another customer, Lee said he unexpectedly discovered a 20-year loan totaling near $80,000 had appeared on his credit report in September. The loan’s appearance damaged Lee’s ability to take advantage of record-low mortgage rates and refinance his home, the complaint says.

Read more: Tesla just settled its yearslong lawsuit with a whistleblower who enraged Elon Musk. But accounting experts say it leaves questions about where hundreds of millions of dollars went.

Another customer, Lito Hugo, is listed on the same complaint for a $17,666 loan he says was never authorized.

Both customers said they tried to work with Tesla and Equifax to resolve the situation, but the credit agency’s dispute letters to Tesla have been ignored. They’re seeking punitive damages, as well as those for their pain and suffering, attorney fees, credit repudiation, and more.

Neither company responded to a request for comment from Business Insider. It’s not clear if the new plaintiffs, who are represented by the same law firm as the first lawsuit, will try to combine the suits into a class-action claim.

“Slapping a large debt on a consumer’s credit report is nothing but a pressure tactic to force consumers to repay debts they do not owe, and defendants have done this deliberately to coerce Plaintiffs, and other consumers, into repaying debts they do not owe,” the complaint says.

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