Five states have banned pet leasing schemes

The Barking Boutique located Grandville

advertises pet leasing on their website.

A new deceptive financing scheme is taking place in Michigan in the form pet leases. Many pet stores and online puppy retailers are now offering these arrangements, which appear to be affordable monthly payment plans to help manage the cost of a new puppy, but they are actually leases under which the lending company keeps ownership of the animal for the duration of the lease.

Consumers are misled by the process and often rushed into signing electronic documents, so they can take the animal home that day.

High fees are attached costing almost the original price of the puppy. At the end of the lease term, (approx 2-3 years), the consumer is given the option of purchasing their pet outright, for an additional payment, or they will be required to hand over the pet to the leasing company.

The thought of having a pet repossessed by a leasing company is terrifying to most people.
When you go into a car dealership, you know you have the option to buy or lease a car, but when you’re buying a new pet, the thought of leasing doesn’t even cross your mind.

Some consumers were told they could pay a termination fee to get out of the lease and relinquish their pets to a shelter.  Many have opted to buy out their lease, sometimes tapping into their savings, to ensure they will not have to give up their new family member.

Once the pet store is paid in full by the leasing company, many leasing companies regularly assign leases to Monterey Financial Services—a collection company with over 100 complaints and reviews filed with the BBB. Often consumers provide direct access to their bank accounts using auto withdrawals, if there is an over draft, the collection company can be aggressive.

Problems in Michigan

The Barking Boutique (Grandville) and The Family Puppy (Flint, Troy, Novi) offer pet leasing on their websites, resulting in complaints filed with the BBB. Last year, both stores advertised My Pet Funding.

The ad’s fine print read as follows:

“AFTER MAKING YOUR REGULAR MONTHLY PAYMENTS AND A SEPARATE RESIDUAL PAYMENT AT THE END OF THE LEASE OWNERSHIP WILL TRANSFER TO THE BUYER”.

This year, both stores use Credova which is not a lender, rather a platform to access third-party providers for lease-to-own financing and other lending products based on a consumer’s credit profile.

Consumer Alerts & New Legislation

In 2017, the ASPCA and the Better Business Bureau issued consumer alerts.

Nevada, California, New York, Indiana and Washington have now outlawed pet leasing, and Connecticut, Florida, New Jersey and Rhode Island lawmakers are proposing legislation prohibiting predatory lease contracts.

Predatory pet leasing schemes in Michigan

In 2017, The American Society for the Prevention of Cruelty to Animals (ASPCA) issued consumer alerts through the Better Business Bureau and media outlets warning families about predatory financing practices, including “pet leasing” where the puppies are held as collateral. 

Financing options allow puppy stores to sell puppies to families who otherwise are not able to pay the full price. Depending on your credit history, you might end up "renting" your puppy.

Check the fine print!

When puppy buyers sign a lease agreement, the leasing company buys the puppy from the puppy store and retains ownership of the puppy until the customer makes all the monthly payments.

Puppy buyers can be easily misled by the financing language because the store employees do not understand the loan terms or simply desire to make the sale by glossing over them.  

The Family Puppy (Novi, MI) September 27, 2011
Photo Credit, Puppy Mill Awareness SE Michigan. 

Two Michigan pet stores offer pet leasing: The Barking Boutique (Grandville) and The Family Puppy (Flint, Troy, Novi), resulting in complaints filed with the BBB. 

Both stores advertised “My Pet Funding” last year as a financing option on their websites. 
The ad’s fine print read as follows: 

“AFTER MAKING YOUR REGULAR MONTHLY PAYMENTS AND A SEPARATE RESIDUAL PAYMENT AT THE END OF THE LEASE OWNERSHIP WILL TRANSFER TO THE BUYER”.

Now both The Barking Boutique and The Family Puppy stores advertise "Credova" on their websites. According to Credova's wesite, they are not actual lenders. The bottom of their website states:

"Credova provides a software platform for retailers to access third-party providers for lease-to-own financing and other lending products based on a consumer’s credit profile."

The Barking Boutique and Petland (Novi) puppy stores also offer high interest rate loans through Lending USA. 

According to a recent USA Today article “Pet leasing has been drawing scrutiny from lawmakers and animal welfare groups since media reports highlighted consumer complaints against Reno, Nevada-based Wags Lending, which pioneered the practice. Nevada and California have now outlawed pet leasing, and New York lawmakers are proposing legislation prohibiting lease contracts "where dogs or cats are used as collateral." 

In January, Florida joined the list of states with plans to ban predatory pet lending. The bill would require contracts to be voided if the pet could be used as collateral to ensure payments of the contract.

Even the American Kennel Club, a longtime supporter of the commercial dog breeding industry, opposes pet leasing:

“AKC supports a ban on predatory pet leasing schemes that victimize potential owners, undermine a lifetime commitment to a pet, and do not confer the rights and responsibilities associated with legal ownership of a pet.”

Bloomberg’s March 1, 2017 article “I am renting a dog” includes the most thorough coverage of this new tactic to help peddle puppies.

Related blog: Warning Puppy Loans and "Rental" Agreements