Parisi v. GreenSky
This case involves issues around digital contract formation and electronic signatures, which can be used by companies to bind their customers and employees to terms they might never see or know about. This is especially critical when those terms take away important rights, like the right to go to court.
Susan Parisi, a veteran and cancer survivor, fell victim to a bait-and-switch scheme—documented by federal regulators—that depends on digital contract formation. Fortunately, Ms. Parisi fought back as soon as she found out that two companies—financial technology company GreenSky, LLC and window-replacement company Renewal by Anderson—had taken out an unauthorized loan in her name. When her efforts to work with GreenSky’s customer service failed, she filed a class action lawsuit to vindicate her rights and the rights of other Oklahomans injured by this scam. The district court correctly denied the companies’ efforts to dismiss Ms. Parisi’s suit and compel arbitration. Both companies appealed and Public Justice, along with our co-counsel from Varnell & Warwick and Rawls Law Office PLLC, represents Ms. Parisi on appeal in the U.S. Court of Appeals for the Tenth Circuit.
Ms. Parisi saw an advertisement from Renewal by Anderson of Oklahoma offering financing to upgrade her windows with zero money down and zero payments or interest for two years. A Renewal by Anderson sales rep came to her home, and they discussed the advertised zero-interest loan, which Ms. Parisi said would be necessary, as she was about to undergo chemotherapy. The sales rep assured her that she could replace her windows using the advertised loan and used his iPad to help her submit what she thought was a loan application. She couldn’t see anything on the sales rep’s iPad apart from a signature line or checkboxes to populate her digital signature. A few minutes later, a representative from GreenSky, which partners with merchants like Renewal by Anderson to provide consumer financing at the point-of-sale, called to confirm that Ms. Parisi had been approved for “our two-year loan program.”
It turns out that Ms. Parisi had been approved for a vastly different loan than the one she applied for. Using a bait-and-switch scheme documented by the Consumer Financial Protection Bureau, GreenSky offered Ms. Parisi a high-interest loan with an interest rate of nearly 25%. What’s more, by the time Ms. Parisi found out about that loan, Renewal by Anderson had already “accepted” it on her behalf by using GreenSky’s “Shopping Pass” system, which works like a credit card that both the consumer and the merchant can use. When Ms. Parisi received a notice that funds had been dispersed to Renewal by Anderson from a loan she hadn’t heard about, she immediately contacted GreenSky customer service, emphasizing that she had not authorized any transactions or agreed to a high-interest loan.
Despite her protestations, the high-interest loan wasn’t cancelled until 2022—after Renewal by Anderson had received thousands of dollars and her loan account had been charged late fees for nearly a year. When she filed her lawsuit, Ms. Parisi’s credit report still showed that she owed a balance. Worse still, Renewal by Anderson never even contacted her to replace her windows. Ms. Parisi sued Renewal by Anderson and GreenSky on behalf of herself and other consumers in Oklahoma who have been hit with this bait-and-switch scam. She alleges that the defendants regularly issue consumer loans without disclosing their terms, which is illegal under the Oklahoma Consumer Credit Code.
Instead of answering the merits of Ms. Parisi’s claims, Renewal by Anderson and Greensky asked the district court to dismiss her case and send it to arbitration, citing the arbitration clauses in their fine print terms. The district court denied both companies’ motions to compel arbitration. For GreenSky, the court concluded that Ms. Parisi could not agree to terms she didn’t know about, and that Renewal by Anderson hadn’t been authorized to accept the high-interest loan on her behalf. And for Renewal by Anderson, the court also concluded that it had not formed an agreement with Ms. Parisi to purchase windows—let alone to arbitrate claims related to that purchase—because they had not agreed on an essential term: financing. Ms. Parisi could not agree to terms she had no notice of, and it’s undisputed that she did not see what she was signing on the iPad. She was relying on the sales rep’s representation that her signatures were to be used only to apply for a loan, not to purchase windows or sign away her rights to be in court.
Both defendants have appealed the district court’s orders denying their motions to compel arbitration. Along with Rawls Law Office PLLC and Public Justice member firm Varnell & Warwick, we represent Ms. Parisi on appeal in the Tenth Circuit. Ms. Parisi filed her appellate brief on August 7, 2024. The Tenth Circuit will hear oral arguments on January 21, 2025.
