Chargebacks, ACH Disputes, and Dealing with Dealer-Arranged Financing — What Works and When

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Payment disputes are governed by card network rules, Regulation E, the Electronic Fund Transfer Act, state contract law, and the FTC Holder Rule. Deadlines are strict. Consult an attorney before initiating a dispute that may affect your credit or contractual obligations.

Overview

You paid a solar company for a system that was never completed. Or you made a deposit and then discovered the company is now out of business. Or the installation was botched and the company refuses to fix it. You want your money back — but the company is stonewalling, unresponsive, or insolvent.

If you paid by credit card or ACH debit, you have dispute rights that exist independently of your solar contract. And if the financing was arranged by the dealer — as most solar loans are — the FTC Holder Rule may allow you to assert claims and defenses against the lender itself, not just the installer.

This guide walks through when chargebacks work, when ACH disputes work, and how to leverage the Holder Rule against third-party financing companies.

Chargebacks: Credit Card Disputes

If you paid any portion of the solar transaction by credit card — a deposit, a progress payment, or the full amount — you have dispute rights under the Fair Credit Billing Act and the card network's chargeback rules.

When a Chargeback Applies

You can dispute a credit card charge when:

Services were not rendered. The installer took your payment and never completed the work — or never started it.
The work was defective. The system was installed but does not function, causes damage, or was not built to the contract specifications.
The company went out of business. If the installer disappeared within 60 to 120 days of your payment, a chargeback may still be available.
The amount charged exceeds what was authorized. The company charged more than the agreed-upon amount.
The company misrepresented what you were buying. The product delivered does not match what was promised.

The Chargeback Process

Step 1: Document everything. Gather your contract, payment receipts, communications with the installer, photographs of any defective work, and a timeline of what happened.

Step 2: Attempt to resolve with the merchant first. Most card issuers require you to have attempted resolution directly before filing a dispute. Send a written demand to the installer by email or certified mail. Document the attempt.

Step 3: File the dispute with your card issuer. Call the number on the back of your card or file through your online banking portal. You typically have 60 to 120 days from the statement date showing the charge to initiate a dispute — but deadlines vary by issuer and card network.

Step 4: Provide supporting documentation. Your issuer will ask for evidence. Submit everything — contract, payment records, communications, photographs, timeline. The more organized the submission, the stronger the dispute.

Step 5: Follow up. Chargeback investigations can take 30 to 90 days. Monitor the status and respond promptly to issuer requests.

Limitations of Chargebacks

Time limits are strict. If the charge is older than the issuer's deadline, the dispute will be denied.
The issuer may side with the merchant. If the merchant provides documentation showing the charge was authorized, the dispute may fail.
A successful chargeback does not release you from the contract. The solar company may still pursue you for payment through other means — including collections or a lawsuit.
Chargebacks do not apply to loan payments. If you financed the system through a third-party lender and are making monthly loan payments, a chargeback against the lender is generally not available — the Holder Rule may apply instead.

ACH Disputes: Bank Account Debits

If you paid by ACH debit (electronic withdrawal from your checking account), your dispute rights are governed by Regulation E and the Electronic Fund Transfer Act.

When an ACH Dispute Applies

The debit was unauthorized. You never authorized the company to withdraw funds — or the amount withdrawn exceeds what you authorized.
The debit was for services not rendered. Same standard as credit card chargebacks — the company took your money and did not perform.
The debit occurred after you revoked authorization. If you instructed the company (in writing) to stop debiting your account and it continued, the subsequent debits are unauthorized.

The ACH Dispute Process

Step 1: Contact your bank immediately. Regulation E requires banks to investigate unauthorized or erroneous ACH debits. You typically have 60 days from the statement date to report the issue.

Step 2: Submit a written dispute. Your bank will require a signed Written Statement of Unauthorized Debit (WSUD). Describe the specific debit(s), why they are unauthorized or erroneous, and attach supporting documentation.

Step 3: The bank investigates. The bank has 10 business days to investigate (longer in some circumstances). If the debit was unauthorized, the bank must credit your account within that period.

Key Distinction: Revoking Authorization vs. Disputing

If you authorized recurring ACH payments but now wish to stop them, you must revoke authorization in writing to the merchant — and keep a copy. If the merchant continues to debit after revocation, those subsequent debits are unauthorized ACH transactions.

However, revoking authorization does not cancel the underlying contract. The solar company or lender may still claim you owe the money and may pursue you through collections or legal action.

The FTC Holder Rule: When the Lender Is on the Hook

The FTC Holder Rule (16 CFR Part 433) is one of the most powerful — and underutilized — consumer protection tools in solar financing disputes. It provides that when a seller arranges financing for a consumer — as solar installers routinely do — the lender or financing company takes the contract subject to all claims and defenses the consumer could assert against the seller.

In plain English: if the solar installer lied to you, did shoddy work, or breached the contract — and the financing was arranged by that installer — you may be able to assert those same claims against the lender.

How the Holder Rule Works in Solar Financing

The typical solar transaction follows this pattern:

The installer sells you a system and simultaneously "arranges" financing through GoodLeap, Mosaic, Sunlight Financial, or a similar lender.
The lender pays the installer directly — often the full loan amount — shortly after installation.
You make monthly payments to the lender.
When the system is defective or incomplete, the installer is gone or unresponsive — but the lender still demands payment.

Under the Holder Rule, the lender cannot claim to be a "holder in due course" immune from your defenses. The lender stands in the shoes of the installer for purposes of your claims. If you could sue the installer for fraud or breach of contract, you can assert those claims against the lender — including as a defense to payment or as a basis for affirmative recovery.

The Notice Requirement

For the Holder Rule to apply, your contract must include the following notice (in at least 10-point bold type):

NOTICE: ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER OF GOODS OR SERVICES OBTAINED PURSUANT HERETO OR WITH THE PROCEEDS HEREOF. RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER.

If this notice does not appear in your contract, the lender's holder-in-due-course status may be preserved — and the Holder Rule may not apply. This is one reason to have your solar contract reviewed by an attorney early in the dispute process.

Practical Application

If your system is defective or incomplete and the installer is out of business:

Send a letter to the lender (certified mail) asserting your claims and defenses under the Holder Rule.
State specifically what the installer did wrong (fraudulent inducement, breach of contract, failure to complete installation).
Demand that the lender cease collection, correct credit reporting, or — if payments have been made — provide restitution up to the amount paid.
If the lender refuses, file complaints with the CFPB, the FTC, and the state AG. The Holder Rule provides a legal basis for a lawsuit against the lender — but this is complex litigation that requires an attorney.

Enforcement Context

The Minnesota Attorney General's investigation of four large solar-lending companies — GoodLeap, Sunlight Financial, Solar Mosaic, and Dividend Solar Finance — uncovered that the lenders all follow the same profit model: entering contractual relationships with solar installers that direct the installers to push costly loans on unsuspecting consumers. The suit seeks accurate representation and disclosures, civil penalties, and remediation to harmed purchasers.

This enforcement action illustrates that lenders are not insulated from liability for the misconduct of the installers they partner with — particularly when the financing is dealer-arranged.

When the Installer Disappears: Which Path to Take

If the installer has disappeared (out of business, unresponsive, no contact):

Credit card deposit: File a chargeback immediately — do not wait. The window is short (60 to 120 days).
ACH debit: Dispute with your bank under Regulation E. Report within 60 days.
Third-party lender payments: Assert the Holder Rule against the lender. Send a formal letter. If the Holder Rule notice is present in your contract, you have leverage. If not, consult an attorney.
Cash or check payment with no recourse: File complaints with the state AG, the FTC, the CFPB, and the state contractor licensing board. If the contractor carried a bond, file a claim against it.

FAQ

How long do I have to file a credit card chargeback for a solar deposit?

Typically 60 to 120 days from the statement date showing the charge. Deadlines vary by issuer and card network. Do not delay.

Can I stop making payments to my solar lender if the system is defective?

Unilaterally stopping payments is risky — it can result in delinquency, collection, and credit damage. Instead, assert your rights under the Holder Rule in writing before ceasing payment, and consult an attorney.

Does the Holder Rule apply to PACE financing?

The CFPB's 2024 final rule applied TILA requirements more broadly to PACE transactions — but PACE assessments are generally treated as tax obligations rather than consumer credit for Holder Rule purposes. Consult an attorney for PACE-specific analysis.

What if I paid by debit card rather than credit card?

Debit card transactions may be disputed under the card network's rules and Regulation E if the transaction was unauthorized. However, debit card chargeback protections are typically weaker than credit card protections. Act quickly.

Got blindsided by a solar deal that did not deliver?

You may have a claim — and the law may make the company that defrauded you pay your legal fees. Our 2-minute eligibility check screens for the consumer-protection statutes that apply to your situation (TILA § 130, the FTC Holder Rule, your state UDAP) and connects you with a consumer-protection attorney in our network if you qualify. Free review, no upfront cost, no obligation.

Start your free 2-minute review →