FTC, California Act Prohibits Ygrene Energy Fund from Deceiving Consumers Regarding PACE Financing, Placing Liens on Homes Without Consumers’ Consent | So Good News


The Federal Trade Commission and the State of California are taking action against domestic financial services provider Ygrene Energy Fund Inc. by misleading consumers about the potential financial impact, and by falsely posting links to consumers’ homes without their consent. The FTC and California allege that Ygrene and its contractors falsely told buyers that the funds would not affect the sale or repossession of their homes, often relying on cheap sales tactics or fraud to get buyers to sign up.

“Ygrene and his marketing team deceived buyers about home improvement fees and then stuck buyers with liens that made it difficult to sell their homes,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The order we proposed requires Ygrene to clean up its business practices, monitor its sales practices, and help fraudulent buyers cancel their licenses.”

“Ygrene Energy Fund took advantage of California’s working families, putting their precious assets at risk,” said California Attorney General Rob Bonta. “Today’s settlement holds Ygrene accountable for their wrongdoing and puts measures in place to protect homeowners from future fraud. PACE assistance was designed to help families make home repairs, but the dishonesty of companies like Ygrene has left some homeowners at risk of losing their homes. Before I signed the PACE agreement , I encourage all Californians to become familiar with the program and take the time to understand what it is and, more importantly, what it is not.”

The proposed court order it would require Ygrene to stop his deception and take better care of the contracts he has been selling. As part of the settlement, Ygrene will be required to provide $3 million to provide relief to some consumers whose homes are owed by the company.

California-based Ygrene has funded PACE, a home equity financing program, to develop clean energy homes in California, Missouri, and Florida. Since 2015, Ygrene has trained home improvement contractors to sell the company’s PACE financing to homeowners as a way to pay for energy upgrades (eg, solar panels or modified insulation) in consumer homes. These sales are often done door-to-door, where contractors approach consumers in their homes, selling both the energy upgrades and financial benefits of Ygrene’s PACE.

PACE financing is a new form of financing that relies on property taxes to collect money from buyers. When a buyer uses PACE financing to pay for a clean energy project, an initial lien is placed against the buyer’s home, and payments on the financing are collected through the homeowner’s tax bill. Failure to pay may result in the buyer having the goods confiscated.

The FTC and California allege that Ygrene recruited and approved home improvement contractors, whom Ygrene did not adequately train or supervise, to sell its products, resulting in many buyers being misled during the sales process and unfairly placed in their homes without them. explain, informed consent. Specifically, according to the FTC and California, Ygrene and its contractors harmed consumers by:

  • Misleading consumers about PACE’s impact on real estate transactions: The complaint alleges that Ygrene or his contractors provided false or misleading information that the lien was placed on their home because the PACE funds could only be transferred to the property when it was sold. In fact, most lenders will not offer a mortgage unless the PACE interest is paid in full.
  • Misleading consumers about PACE’s impact on repayments: In many cases, the complaint alleges, Ygrene or its contractors told consumers that the PACE agreement would not interfere with their ability to renovate their homes. As with real estate transactions, most lenders will not approve new financing until the PACE agreement is canceled.
  • Ensnaring consumers with PACE liens without prior written consent: In general, Ygrene relies on electronic signature systems for its financial contracts with customers. In some cases, the complaint says, Ygrene’s sales practices prevented consumers from properly reviewing or agreeing to material disclosures related to PACE contracts. Contracts have driven consumers through electronic signatures on financial contracts, which are minimally visible and often presented to consumers on a mobile phone or tablet – often with the contract – with a small screen that increases the difficulty of navigating and understanding agreement. In some cases, the contractor has forged the buyer’s signature by signing the contract without the buyer’s consent. The complaint alleges that even when Ygrene received an electronic signature and called the customer to explain the agreement, the company failed to ensure that it was speaking to the customer or that the customer had given express consent.

Forced Labor

Ygrene has agreed to a court settlement with the FTC and California that would require it to stop violating the FTC Act and the California Unfair Competition and False Advertising Laws. A court order would require Ygrene to:

  • Stop misleading consumers: The law would require Ygrene to stop misleading consumers about the transfer of PACE financing to a new owner if they sell, the impact of PACE financing on the sale or repossession of the home, or if the home will be used as collateral in PACE financing.
  • Manage contracts: Ygrene may need to develop a program to monitor the performance of its investment contractors, to ensure that they do not deceive consumers and that they do not forge the signature of consumers on financial contracts. The law would also require Ygrene to investigate and act on consumer complaints about its contracts.
  • Make sure it has received the proper consumer consent: The Act would require Ygrene to obtain the consumer’s prior, informed consent before using the consumer’s property as collateral to secure PACE financing.
  • Process a lien release or consumer refund: The law would require Ygrene to send an audit to buyers who have liens on the loan to determine whether the buyer signed the financing documents himself or had them signed by someone else. Ygrene’s survey responses and documentation may be reviewed by an administrator. The law calls for Ygrene to establish a $3 million fund that can be used to release liens placed on consumers’ homes without their consent. If the cost of releasing the liens is less than $3 million, the law would require Ygrene to pay the remaining amount to the FTC to be used to rehabilitate consumers who have been harmed by the practices being complained about.

The committee voted to allow the workers to file the complaint and said the final order was 4-0. The FTC filed the complaint and final order/judgment in the US Supreme Court for the Central District of California.

NOTE: The agency files a complaint if it has “reasons to believe” that the defendants are violating or intending to violate the law and it appears to the agency that the case is in the public interest. The final said sentences become legally binding when approved and signed by a District Court judge.


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