New Jersey Division of Consumer Affairs Reaches $160,000 Settlement with Georgia Financing Company to Resolve Probe of Home Improvement Loans Arranged by the Company
NEWARK - Attorney General Christopher S. Porrino and the Division of Consumer Affairs today announced that a Georgia financing company will change its business practices, make a $100,000 payment, and provide an additional $60,000 to consumers, to settle the Division's investigation into point-of-sale home improvement loans the company arranged for New Jersey consumers.
GreenSky Servicing LLC ("GreenSky"), which arranges on-the-spot financing for home improvements through its participating contractors, agreed to the settlement terms in an Assurance of Voluntary Compliance ("AVC") that resolves the investigation into whether the company's lending program violated New Jersey's consumer protection laws.
The investigation stemmed from complaints from consumers who alleged they were unaware that home improvement loans had been taken out in their names; were not given the opportunity to read or sign loan documents before becoming obligated on the loans; and/or were not provided with the loan documents after agreeing to the loan. Consumers also complained that GreenSky held them liable for loans where no home improvement work had been performed.
"This settlement provides a meaningful benefit to New Jersey consumers who finance the purchase of home improvements through contractors participating in the GreenSky program," said Attorney General Porrino. "Consumers will be provided with important disclosures at the earliest possible time, and contractors will be held to stiffer standards through GreenSky's monitoring, as required by the settlement."
"Home improvement projects are expensive. Consumers must have full disclosure when selecting funding sources," said Steve Lee, Director of the Division of Consumer Affairs. "This settlement demonstrates our commitment to ensuring that New Jersey consumers are provided all the information entitled to them under the law to help them make important decisions as to financing."
Under the terms of the AVC, GreenSky will resolve outstanding consumer complaints by issuing refunds ranging from $3,383 to $15,812 to five consumers; forgive a $3,622 loan to another consumer; and issue credit report corrections on behalf of four other consumers.
GreenSky also agreed to makes changes in its business practices, including:
- Exercising due diligence of prospective contractors to verify they have active licenses or registrations in the state, and to ascertain if they have consumer complaints, judgments, or liens against them or have filed for bankruptcy.
- Terminating from the GreenSky program any contractor that a court or administrative body has found in violation of the New Jersey Consumer Fraud Act (CFA), the Contractors Registration Act, the Contractor Registration Regulations, or the Home Improvement Regulations.
- Ensuring that all materials used in the GreenSky Program clearly and conspicuously convey to consumers that it is a loan program.
- Ensuring that no borrower can be charged by a contractor for a transaction until GreenSky has confirmed electronically, via telephone, or in writing, that the borrower has received the loan agreement.
- Requiring contractors to obtain a borrower's written or electronic authorization to process a transaction on the borrower's account.
- Suspending a borrower's obligation to pay for transactions in dispute pending the outcome of a comprehensive investigation by GreenSky.
- Securing a refund from the contractor, filing a credit card chargeback through the appropriate payment card network on behalf of the borrower, or directly providing a refund to the borrower if an objection to a transaction is deemed to be justified.
- Designating a GreenSky employee as a Compliance Coordinator for a two year period who will monitor the company's compliance with the AVC and the CFA, and will facilitate the resolution of any additional consumer complaints.
Investigator Loretta Creggett of the Division of Consumer Affairs' Office of Consumer Protection conducted this investigation.
Deputy Attorney General Jeffrey Koziar, from the Consumer Fraud Prosecution Section within the Division of Law, represented the Division in this matter.
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file an online with the State Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504- 6200.