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RECC provides guidance for consumers who take out loans to buy solar PV systems

Posted: 10 May, 2018. Written by Virginia

RECC is aware that around 2,000 people complained to the Financial Ombudsman Service (FOS) about mis-selling of solar photovoltaic (PV) panels in 2017 alone; and the total number of people affected could be as high as 20,000.

Many of these people are looking to reduce their bills, and are often retired or approaching retirement. Typically, they are cold-called, and agree to a visit from a salesman. During the visit they agree to have the panels installed and to take out a loan to pay for them. Typically they are told that the panels will ‘pay for themselves’, and even make some money, because they will save on their energy bills and receive a Feed-In Tariff payment from their energy supplier for the electricity the system generates.

Unfortunately, for many of these people, when their loan repayments are taken into account, the solar PV panels are actually costing them money. In some cases, people are being left in financial difficulty, some more than £1,000 worse off, because the solar PV panels end up costing them more money than they save in energy bills and receive through the Feed-In Tariff. Often the company who sold them the panels has ceased to trade.

The good news for these consumers is that the providers of these loans are responsible for any mis-selling or misrepresentation on the part of the installers. So, even if a consumer’s original installer is no longer trading, consumers can ask the credit provider to refund the cost of the solar panels and cancel the loan under Section 75 of the Consumer Credit Act. If they are not happy with the answer they get, they can ask the FOS to look into their complaint.

The FOS has reported that three-quarters of the complaints they received in 2017 were about loans with three lenders: Barclays Partner Finance (part of Barclays Bank), Shawbrook Bank and Creation Consumer Finance (part of BNP Paribas). The FOS reported that they found evidence of high pressure sales techniques, and misleading claims made by the salesman. In many cases, the FOS decided that consumers would not have agreed to have solar PV panels installed if they had received accurate and honest information about the costs and benefits.

RECC is well aware of the sorts of high pressure sales techniques the FOS reports finding in the sector. These practices run counter to the Code which requires members, where they are arranging finance, to ensure that any estimate of savings, periods of recovery ('payback') or other measures of financial effectiveness take account of monthly repayments as well as of the full amount payable, including interest. Members are required to provide consumers with clear and accurate information about the terms of finance including the total amount of any loan, the amount payable each month and the amount of interest payable on the loan. Further, The Code specifically prohibits members from misleading consumers in such a way as to persuade them to enter into a finance agreement which they would not have otherwise have done.

RECC worked with the main lenders in the sector over the past four years to help them spot high pressure selling techniques, misleading advertising and claims and exaggerated performance estimates. RECC carried out due diligence on the installers that a number of these lenders were partnering with, and advised these lenders how to recognise good practice in the sector. Unfortunately, in many cases, these lenders did not take RECC’s advice and continued to partner with installers who were not RECC members and who were blatantly flouting the Code and the consumer protection legislation which underpins it.

In 2017 RECC received some 500 complaints from consumers about their solar PV systems. The majority of these involved mis-selling and misrepresentation by salesmen using high pressure techniques. 35 of these complaints involved finance in 2017, down from 87 in 2016, 159 in 2015 and 109 in 2014. This reduction reflects the fact that some of the major lenders withdrew from the sector when they understood the scale of the problem they were facing.

RECC always advises consumers to contact their lender where they have purchased solar PV systems on finance and have concerns.

The RECC website also contains:

• guidance and advice for those who may have been mis-sold finance here:

• guidance for consumers on how to make a claim from a fiinance company here:

• information on RECC’s dispute resolution process here: