How is a solar-panel installation mis-sold?
There are more and more cases of companies being penalised for the unfair way the sell or deliver a service. The addition of the mis-selling of solar panels to this tally means that many of those who bought into the idea of making a saving on their household utilities while protecting natural resources and aiding the environment, did so under false pretences, and are now entitled to make a claim against the company selling the panels, or alternatively, the finance company providing the policy to pay for it.
A self-funding solar panel opportunity
The typical tale goes like this: the wily salesperson approaches the owners of an appropriately sized house, explains to them all the benefits of solar energy, how much they are going to save, and how much more money on top of that they will earn by selling surplus energy back into the power grid. When the costs are discussed, if the homeowner doesn’t have the capital to pay for the installation, it is suggested that they should take out a simple loan to cover installation costs, but not to worry, as the savings and the repayments from the Government will not only cover the monthly loan amounts but add extra income to their finances.
It sounds like a great investment, who could possibly resist?
Reeled in by false claims of solar panel profits
In truth, the returns were much less than suggested, leaving many of the investors out of pocket, reportedly by typical amounts of as much as £500 a year. On top of that, the interest rates on the loans, over terms of 10 and 20 years, and what would happen in a shortfall situation, weren’t often explained clearly enough, which is a violation of consumer credit laws.
Could you be entitled to compensation?
So far, around 2,000 people have made complaints about solar companies to the Financial Ombudsman, and further estimates push the figures to a possible 20,000 who may have been affected by the scandal.
The Financial Ombudsman has reported evidence of pressure sales techniques and misleading sales literature or representation by the salesperson.
There are also areas to claim compensation against the loan providers under section 75 of the Consumer Credit Act 1974. Consumer credit law dictates that lenders must take responsibility for mis-selling when something goes wrong. So, even if the company selling the solar panels is no longer trading, you could still be in a position to make your claim against the finance company.
How do I know if I should make a claim?
The following are the key points where solar panels have been mis-sold through unfair means:
- If the solar panels were bought, or partially paid for, including paying the deposit, using a finance agreement or credit card.
- If the solar panels were bought within the last 6 years.
- That the performance of the solar panels was not as outlined in the sales literature or sales discussions, and failed to produce an income required to create the suggested financial benefits.
- That there was significant deficit each month between the financial benefits of solar panels, i.e., the Feed-in-Tariff and reduction in energy bills, and the finance repayments, which wasn’t explained adequately at the time of sale.
Claiming for rescission
In most instances your claim will be for a rescission – this means that the contract will be terminated and you will be paid back all of the money you’ve paid to the seller so far.
Claiming for damages
Claiming for damages from the mis-selling of solar panels can be a complex process. Because the projection of the profits from solar panels is dependent on unpredictable conditions, i.e., the weather and how much sunshine is available throughout each year, hard and fast facts and figures aren’t easily obtainable to use in your defence, and in the calculation of exact financial losses can only ever be estimated.
How to make your claim
If you think you’ve been mis-sold solar panels where the salesperson has used misleading information or unlikely projections, then you are entitled to make a claim on the grounds of misrepresentation.
You should begin your claim as soon as possible as the process can take a prolonged period of time to reach completion.
Gather all the financial arrangement information, documentation and policies. If possible, you should provide copies of all payment details and amounts into the loan facility and also payments made to you from your Feed-in-Tariff.
Complain to the energy company who sold you the solar panels
Write to your supplier making it clear what you expect from them in order to put the matter right. This should include the termination of the contract and the refund of all monies paid. Outline the false expectations you were led to believe from their salesperson, team or literature, and their failure to explain the possible shortfalls in earning potential and how that could affect the loan repayment process.
Alternative methods of resolution
An Alternative Dispute Resolution service is offered by either the Renewable Energy Consumer Code or the Home Insulation & Energy Systems Contractors Scheme.
They will provide mediation to find an amicable outcome and independent arbitration. A cost of £100 plus VAT applies to the RECC’s arbitration scheme. This fee is refundable if you win, or if the arbitrator considers it appropriate to refund you.
Complain to the Financial Ombudsman Service
If you decide to complain to the Financial Ombudsman Service your complaint can only be made against the financial provider of the loan you were advised to take out in order to complete the purchase, and not the energy provider selling the solar panels.
Section 75 of the Consumer Credit Act protects any consumer who has purchased items costing over £100 using a finance agreement or a credit card.
You can claim under section 75 of the Consumer Credit Act 1974, if:
- A credit card was used to pay for some or all of the installation. The contract price must not exceed £30,000, and you do not have to have paid the full amount on the credit card.
- The solar/energy company arranged the finance for you; to pay some or all of the installation costs. Again, the contract price of the installation must not exceed £30,000.