NEWARK – Attorney General Gurbir S. Grewal and the Division of Consumer Affairs Oct. 24 announced that Vivint Solar Developer, LLC (Vivint) has agreed to pay nearly $122,000 and significantly change its business practices to resolve allegations that it engaged in deceptive sales practices, failed to deliver promised energy savings, and otherwise violated consumer protection laws in its sales of home solar energy panels in the state.
According to a release, the Utah-based Vivint, which has entered into over 16,000 solar contracts with New Jersey consumers since 2011, agreed to uninstall and remove solar panels at no cost from the homes of more than a dozen dissatisfied consumers.
The company also agreed to resolve additional consumer complaints – including those received in the future – through binding arbitration if the consumer chooses that option.
Vivint also agreed to develop and implement policies and employee training programs to ensure that going forward the company complies with laws protecting consumers from unfair or deceptive conduct in the marketplace.
“New Jersey is focused on establishing a path to clean and renewable energy for its residents and securing a sustainable environment for future generations,” stated Grewal. “Actions by the Division of Consumer Affairs, like the one we are announcing today, help advance our clean and renewable energy goal by reassuring consumers that they can go solar with confidence because the Division will crack down on deceptive and fraudulent sales tactics.”
The settlement resolves the division’s allegations that Vivint falsely represented the savings the customers would realize from solar power, lured them in with low price quotes that later proved to be false, obtained credit reports without their knowledge or consent, required them to sign confusing contracts that violated clearly-established legal rights of consumers, provided poor or inadequate service, and/or performed shoddy installation of the solar panels.
The allegations against Vivint stem from an investigation the division opened in response to numerous consumer complaints concerning Vivint’s business and marketing practices.
The investigation sought to determine whether Vivint’s conduct in marketing and selling solar energy services in New Jersey violated the state’s Consumer Fraud Act, Fair Credit Reporting Act, Plain Language Review Act, Truth-in-Consumer Contract, Notice and Warranty Act, and Contractor Registration Act, and related regulations.
“Vivint portrayed itself as an affordable alternative for New Jersey consumers looking to lower their energy bills, but sales reps allegedly misled consumers about solar energy contracts and failed to provide essential information that would have allowed consumers to make informed decisions,” stated Paul R. Rodríguez, acting director of the Division of Consumer Affairs. “This settlement not only holds Vivint accountable for harm suffered by a significant number of New Jersey consumers, it puts measures in place to help ensure that Vivint abides by our consumer protection laws in the future. Just as importantly, it provides an avenue of relief for consumers should the company fall short of these obligations.”
Under the terms of a Consent Order with the division, Vivint agreed to make significant changes to its business practices which include, among other things:
· Revising its Advertising and Solicitations by, among other things: not representing that Vivint customers pay less than their current utility rate unless that is accurate for consumers in New Jersey; including a clear and conspicuous statement on all advertising that a consumer’s overall electricity costs might be higher with a solar energy system depending on specific consumer circumstances, and that it will be necessary for consumers to purchase electricity from their local energy distribution company if their solar energy system does not produce sufficient electricity; prohibiting sales staff from representing that a consumer’s monthly electric bill will be lower after installation of a solar energy system, if that is not the case; prohibiting sales staff from representing to consumers that they are employees of, or working on behalf of, any local distribution company; prohibiting sales reps from unduly pressuring consumers into purchasing and/or leasing a solar energy system from Vivint.
- Revising its General Business Practices to, among others things: comply with laws pertaining to obtaining consumers’ credit reports; exercise reasonable efforts to not cause damage to a consumer’s home while installing the solar energy systems and fix any damage or compensate the consumer for the damage within a reasonable timeframe; and provide timely maintenance and support for the operation of solar energy systems, including addressing any malfunctions causing unreasonable reductions in electricity production.
- Revising Vivint Contracts to, among other things: ensure they are written in a simple, clear, understandable, and easily readable way; clearly and conspicuously disclose any terms associated with costs and fees outside the cost of energy and the lease or sale price of the system; remove from contracts any statement that waives rights consumers have under New Jersey or federal consumer protection laws.
- Revising its Customer Service Practices to: use good faith efforts to respond to and resolve all consumer complaints promptly; and to staff its customer service department at levels sufficient to provide consumers with timely access to a live customer service representative within normal business hours.
- Revising its Employee Training to, among other things: develop and implement revised training materials to ensure that its customer service and sales representatives are familiar with Vivint’s policies; train sales reps in NJ consumer protection laws and in the practices required and prohibited by the Consent Order; and ensure that sales reps understand disciplinary steps that will be taken against those who engage in deceptive or improper conduct or solicitation, including forfeiture of commissions and possible termination.
- Monitoring Sales Practices: Vivint will investigate any consumer complaint received within six months of a new contract and will provide the consumer with an opportunity to have the solar system uninstalled and removed for free if the investigation determines that any deceptive solicitation occurred; if a consumer’s complaint concerning deceptive solicitation is substantiated, Vivint will investigate a random sample of 10% of leases or sales obtained by the same sales representative within the prior six months to determine if those consumers were subjected to any similarly deceptive practices. If Vivint substantiates that any of those additional consumers were subjected to deceptive practices, Vivint will provide those additional consumers with the opportunity to have their solar energy systems uninstalled and removed for free, and will expand the investigation to include all leases or sales contracts obtained by that sales representative.
- Employing a Full-time Compliance Officer for one year whose duties will include: developing and implementing policies to ensure that customer service representatives and sales representatives comply with the Consent Order, as well as all applicable laws and regulations; developing and implementing training materials and training programs; ensuring that all required customer service representatives and sales representatives receive the required training; and overseeing the investigation of all consumer complaints including, but not limited to, deceptive or improper solicitation, and taking appropriate remedial action.
Under the terms of the settlement, Vivint has paid the state $121,952.53, of which $69,300 represents civil penalties (with an additional $20,000 of the penalty suspended on the condition that Vivint abides by all the terms of the Consent Order); $35,168.78 represents reimbursement of the Division’s investigative costs and attorneys’ fees, and $17,483.75 represents restitution to two consumers.
Investigator Brian Penn of the Office of Consumer Protection within the Division of Consumer Affairs conducted this investigation.
Deputy Attorney General Robert N. Holup of the Consumer Fraud Prosecution Section within the Division of Law represented the State in this matter.
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file an online complaint with the State Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200.
