Fifth Third Bank Unlawfully Adds Hidden Finance Charges to Solar Panel Installation Loans, Class Action Alleges

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A proposed class action lawsuit has been filed by a consumer who claims Fifth Third Bank failed to disclose a $26,000 finance charge when she took out a loan to buy a residential solar power system.

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According to the 11-page lawsuit, Fifth Third Bank’s systematic failure to inform borrowers about a “baked-in” charge on loans used to finance solar panel systems violates the federal Truth in Lending Act (TILA), which requires creditors to disclose any finance charges a consumer would incur for buying on credit instead of paying cash.

As the case tells it, Fifth Third Bank in June 2023 extended the plaintiff a purported $70,661 loan at an annual percentage rate (APR) of 3.99 percent for the purpose of financing her purchase of a solar panel system. In the financing agreement, the bank allegedly represented numerous times that the loan’s full amount, $70,661, would be used to pay the third-party contractor and cover the system’s installation. However, Fifth Third Bank did not disclose that the $70,661 included not just the cost of the system and installation as it had represented but a more than $26,000 hidden finance charge, the filing claims.

The lawsuit contends that the bank inflated the represented loan amount to include the significant hidden fee, which, per the case, the defendant unlawfully failed to disclose as a finance charge.

To make matters worse, Fifth Third Bank did disclose in its financing agreement a separate finance charge of $42,265.42, which was based on the 3.99-percent APR and the allegedly “bloated” principal loan amount, the suit asserts. As the complaint tells it, the structure of the woman’s loan meant that she was essentially paying two finance charges—the stated $42,265.42 fee and the hidden $26,000 charge that Fifth Third bank allegedly kept for itself.

“Because Fifth Third Bank failed to disclose the hidden fee, [the plaintiff] was not apprised of the true cost of her decision to borrow money,” the filing argues.

The lawsuit looks to represent anyone who, in the past year, borrowed money from Fifth Third Bank or its predecessor, Dividend Solar Finance LLC, for the purchase of a solar panel system, where the loan’s stated amount included a fee not paid to the seller/installer and where the amount disbursed to the seller/installer was less than the TILA cap under 15 U.S.C. § 1603(3), as adjusted annually.

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