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LANSING – Michigan Attorney General Dana Nessel has filed a public enforcement lawsuit against Climax Solar (PDF), its owner, Joshua Thompson, and the financial institutions that financed consumers’ purchases of Climax systems. It is alleged that the defendants participated in a deceptive solar-financing scheme that affected approximately 1,700 Michigan consumers and involved an estimated $81 million in financed transactions. The complaint alleges violations of the federal Consumer Financial Protection Act, the Michigan Consumer Protection Act, and the Michigan Home Solicitation Sales Act, along with claims of common-law fraud and unjust enrichment.
Climax, a Michigan limited liability company, sold residential solar systems through in-home sales presentations. The Attorney General contends sales representatives promised homeowners they could replace or greatly reduce their utility bills with affordable solar payments, use federal tax credits to lower the cost, and have a working system installed quickly.
Through a “pitch, sign, fund, fail, and collect” business model, it is alleged that many consumers were rushed through electronic contracts and financing documents during a single in-home visit. Climax then reportedly submitted the transactions through lender-controlled portals, and the financing companies released substantial funds based on paperwork and interim project milestones before the systems were completed, connected to the electrical grid, or approved by the utility company to operate.
Many consumers were allegedly left with systems that were unfinished, underperforming, unsafe, or never turned on. Some also reported property damage, missing permits, failed inspections, unfulfilled rebates, increased monthly payments, and long periods without a response from Climax. Despite these problems, the Attorney General contends consumers remained responsible for both their utility bills and long-term solar loans.
The lawsuit also alleges that Climax and the financing companies included more than $22 million in hidden financing costs in the prices of the solar systems without separately disclosing those costs as finance charges. These dealer fees, platform fees, and similar charges averaged more than 27% of the amount financed. The fees increased consumers’ loan balances, monthly payments, and total repayment costs while making the advertised interest rates appear lower than the true cost of the credit.
“Climax Solar and its financial partners targeted vulnerable homeowners who just wanted to lower their utility bills and left them with broken promises and massive amounts of debt,” said Attorney General Nessel. “My office remains committed to not only fighting to recover money for ripped-off consumers but also protecting the integrity of the hardworking solar companies operating across our state.”
The complaint further alleges that the financing companies continued to service, collect, report, assign, or enforce the loans even after consumers reported disputed signatures, deceptive sales practices, failed inspections, missing permits, unsafe conditions, and systems that did not work. Some consumers allegedly faced negative credit reporting, liens, or other collection activity tied to projects that were incomplete or defective. After Climax filed for bankruptcy and ceased operations in 2024, some financing companies allegedly closed consumer complaints, directed homeowners to continue working with Climax, or continued treating the debts as valid and collectible even though Climax was no longer available to complete installations or provide repairs.
The lawsuit, filed in the U.S. District Court for the Western District of Michigan, seeks to stop the alleged unfair, deceptive, and abusive practices in residential solar sales and seller-arranged financing. The Attorney General also seeks restitution, cancellation or revision of certain loans, refunds or account credits, corrections to credit reporting, release of liens or Uniform Commercial Code filings, civil penalties where authorized, and other relief for affected Michigan consumers.
Michigan residents who entered into solar contracts with Climax and believe they were victims of deceptive practices can contact the Department of Attorney General’s Consumer Protection Team at:
Consumer Protection Team
P.O. Box 30213
Lansing, MI 48909
517-335-7599
Fax: 517-241-3771
Toll-free: 877-765-8388
Online complaint form
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