Tesla Inc (NASDAQ:TSLA) has been sued by a customer over allegations it misreported a Power Purchase Agreement (PPA) as a loan the latter had undertaken, Bloomberg reported Thursday.
What Happened: Olivier Chaine, in 2017, had Tesla subsidiary SolarCity install rooftop solar panels at his home in Palm Desert, California, with a PPA that allowed him to pay for the energy the solar system produced at a pre-fixed rate, according to Bloomberg.
The Elon Musk-led company reportedly began to list the PPA on Chaine’s Equifax credit report as a 20-year loan for $74,226.
The customer alleges in his lawsuit — filed in Los Angeles federal court — that he never signed on for a loan and that the report to the credit bureau made it hard for him to refinance his mortgage and other investment properties as a credit card company lowered his debt limit, Bloomberg noted.
Chaine’s attorney Bob Brennan accused Tesla of “bait-and-switch” financing and claimed that the automaker and the clean energy firm should have been aware of the implications of “false credit reporting.”
There is no clarity on how many customers find themselves in a similar predicament.
Why It Matters: Chaine is also suing Equifax Inc (NYSE:EFX), in addition to the Palo Alto-based automaker, seeking unspecified monetary damages, as per Bloomberg. He claims that both companies violated the Fair Credit Reporting Act.
Tesla acquired SolarCity in 2016 in an all-stock transaction with an equity value of $2.6 billion at the time.
This month, a Model 3 sedan owner complained that Tesla won't refund him $4,280 for a software upgrade he accidentally subscribed to due to pocket dialing.
Price Action: Tesla shares closed almost 2.7% lower at $448.88 on Thursday and fell 0.47% in the after-hours session.