Like most people, Quentella Livers, a 75-year-old widow from New Orleans, sometimes receives scam solicitations in the mail. So, when in May 2023 she received a statement from a financial technology company called Dividend Finance, informing her that a lien had been taken on property she owned, she threw the document away, thinking that it was rubbish.

But the notifications kept coming. The Livers continued to discard them, until he received a letter from a man named Jason, another New Orleans homeowner. Jason had received similar correspondence and checked property records to find that another finance company called GoodLeap had taken a lien on his house, as well as one on Livers’. It wasn’t just them. Someone from a contractor called Deep South Renovations allegedly took hundreds of thousands of dollars in loans from Dividend and GoodLeap on at least eight homes in the New Orleans area by impersonating the homeowners and using their property as collateral, according to Jason, who is in contact with homeowners.

This person, listed on two contracts as Samantha McGee, had taken advantage of the fact that GoodLeap and Dividend pay loans directly to contractors performing home improvement projects rather than to homeowners. McGee had used real people and home addresses but fake Social Security numbers and email addresses to secure the loans, Livers and Jason say. The perpetrator appears to have relied on GoodLeap and Dividend not performing a search of the homes to ensure that the Social Security numbers and identities on the loan application matched those on file, Jason says. Livers called both companies to try to get the bond released, a process she said proved difficult. “When I talked to them, I said, ‘I don’t understand your company,’” Livers says. “Do you give loans to people without contacting them?”

Livers and Jason were contacted by the FBI regarding the case. (Jason is a pseudonym; he didn’t want his full name used in this article to protect against identity fraud, but he shared documentation he received from GoodLeap with TIME.) The FBI declined to comment on the matter, but several homeowners who were the victims told TIME they were contacted by the FBI. Deep South Renovations could not be reached for comment.

Dividend says it investigated Livers’ concerns and took immediate action to terminate the loan and release the lien. “Unfortunately, fraud is a pervasive problem across all financial services categories in today’s digital age,” a company spokesperson said in a statement to TIME. GoodLeap says the case was a “complex fraud scheme by sophisticated criminals” and that he reported the fraud to the FBI and cooperated with the bureau in the investigation. “GoodLeap has seen less than 0.05% fraudulent transactions on our platform,” says Jesse Comart, a company spokesperson. “Protecting consumers from bad actors is our top priority.”

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GoodLeap and Dividend are two of the few financial technology (or fintech) companies making it easier for consumers to borrow money for home improvement projects, including installing solar panels. These companies, which include Solar Mosaic and Sunlight Financial (which filed for Chapter 11 bankruptcy in October 2023), make it relatively easy to get a loan, often using iPhones and tablets to facilitate same-day sales.

But some consumer advocates say there’s a downside to this quick lending process: The check skips important steps. “You have to make sure the person is who they say they are,” says Carla Sanchez-Adams, a senior attorney at the National Consumer Law Center who studies banking and payment systems. “A lot of fintechs are not good at this.”

It appears that Livers and Jason were victims of what is called synthetic identity fraud. Many companies would have detected the scheme with a simple credit check, says Frank McKenna, co-founder and chief anti-fraud strategist at Point Predictive, an anti-fraud AI company. According to McKenna, a credit report should find that the Social Security number listed on the application does not match the person’s actual Social Security number. “There should have been a big red flag,” he says.

Dividend states that in-person and multi-factor authorization is required to make loans. The company also says that an inaccurately matched Social Security number to a name would raise a red flag and add a full stop that must be cleared before the loan is underwritten. This appears not to have happened in Livers’ case. GoodLeap says it has “several layers of fraud protection” and has added new ones to “keep pace with evolving criminal activity.” He says he reported the fraud to the FBI’s Financial Crimes Division.

Jason filed a complaint with the Consumer Financial Protection Bureau and then received a letter from GoodLeap thanking him for bringing the situation to the company’s attention. He was not responsible for any debt, the letter said.

Jason also emailed other property owners in New Orleans who had a lien on their home from Goodleap but who did not have permission for solar panels. For some of them, including the Livers, the letter was how they discovered that someone had withdrawn money in their name. David Bryan was another of the homeowners who had been given a lien on his property by Goodleap, who sent him a letter saying he owed $45,000. He is still baffled that GoodLeap granted the loan. “Every loan I ever got, I went to the bank to have to sign for,” Bryan says.

Traditionally, banks have provided the majority of consumer loans. But after the Great Recession, banks tightened lending standards and new companies emerged to fill the gap. By 2023, 14% of personal loans will be issued by fintechs Federal Reserve Bank of New York.

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While banks are subject to extensive monitoring by federal agencies, fintech companies are not subject to much federal oversight or regulation. All they have to do is apply for and maintain a license to lend in a particular state, says Chris Odinet, a law professor at the University of Iowa. There aren’t many criteria to get a lending license, Odinet says. “There are so many non-bank and fintech companies of various sizes that it is difficult to have an inventory of companies so you can monitor them to see if they are involved in illegal practices,” says Odinet. “They don’t get caught until they’ve done a lot of damage.”

Legal experts and consumer advocates say a wide variety of fintech companies are skipping some important steps in the evaluation process. The whistleblowers told federal financial regulators that Cash App, a mobile payment platform, does not have “an effective process for establishing the identity of its customers.” according to NBC News.

Solar lenders have come under particular scrutiny for the way they approve applications. In March, Minnesota Attorney General Keith Ellison filed a complaint against Goodleap, Sunlight Financial, Solar Mosaic and Dividend Solar Finance, alleging that the companies engaged in deceptive lending practices. The lawsuit focuses on companies that “specialize in consumer credit through a software application on a smartphone or tablet” and argue that they win customers by promising quick, easy approval and requiring minimal documentation. The complaint alleges that sellers promise low interest rates and monthly payments while hiding a large upfront fee that is “secretly added” to the price of a system.

Neither Solar Mosaic nor Sunlight Financial responded to requests for comment on the Minnesota lawsuit, which is proceeding in court. In a statement provided to TIME, Fifth Third, Dividend’s owner, said it believes the lawsuit’s allegations are “wrong” and that the company intends to “vigorously defend itself.” GoodLeap says its disclosures follow all federal and state laws, including the Truth in Lending Act.

Some consumers who knowingly took out loans from these companies say they were charged unexpected fees or faced undisclosed terms in which their loans ballooned. Others claim that the solar panels they received did not produce the promised amount of electricity. Still other consumers complain that solar lenders lent them money for panels that never worked.

One solar company, Pink Energy, signed up thousands of customers in 15 states, then filed for bankruptcy in late 2022. Seventeen attorneys general are investigating Pink Energy and the lenders it partnered with, including Dividend, according to the annual report of the Fifth Third, the bank that owns Dividend. The bank “is currently cooperating with investigations related to several civil investigative requests by a number of state attorneys general regarding the residential solar installation industry and the lending practices of credit providers to this market, which includes Dividend Solar Finance, LLC,” according to the annual report.

GoodLeap, Solar Mosaic, and Sunlight Financial are all private companies, so it’s difficult to know how many loans they’re making or the total value of those loans. But Fifth Third made $3.8 billion worth of loans for solar energy installations in the first three months of 2024, a 75% increase from a year earlier, according to its earnings reports.

The Consumer Financial Protection Bureau declined to comment for this story, but referred TIME to the report consumer complaints database. Of more than 5 million complaints, 162 named GoodLeap, 185 named Solar Mosaic, 74 named Sunlight Financial, and 3,717 named Fifth Third, the parent company of Dividend Solar Finance.

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