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Should States Ban Pet Leases?

By Christopher Coble, Esq. | Last updated on

It's only natural to think that, when you want a dog, you go to the pound or the pet store, pick out your pup, and go home to a long and wonderful friendship. But some new pet owners are surprised to learn that they were only renting their new best friends. Or, more accurately, getting "fleased" by long term lease agreements with exorbitant interest rates.

One such woman in New York was paying $180 a month for a Chihuahua puppy she wouldn't be able to own until she shelled out over twice the dog's asking price of $1,900 and kicked in an extra $300 purchasing fee. The New York attorney general has filed a fraud suit against the pet store, and the state has passed legislation banning pet leasing. Wait, how is pet leasing even a thing?

Empire State Scam?

The New York describes the process in which PetZone was engaging to lure new pet owners into costly leases:

In an effort to increase sales, The Pet Zone at times financed puppy sales through two companies known as WAGS Lending and Nextep Funding. Consumers who used these financing companies were given multiple types of documentation showing their ownership or "parentage" of the puppy they purchased. However, The Pet Zone employees allegedly failed to adequately inform consumers that these financing agreements were actually styled as "leases," and therefore the customer would not actually own their family pet until payment of the full contract plus additional undisclosed fees, which usually totaled more than twice the original cash purchase-price of the puppy.

Chelsea Walrath never realized she was leasing her Chihuahua puppy, Remi, until a couple months after the adoption. She chose to end the contract, and still had to pay $1,900 to get out of the lease. The ABA reports that New York passed a pet leasing ban last month, but Governor Andrew Cuomo has yet to sign it.

Texas-Sized Loans

Another investigation into Houston-area pet shops found a similar practice in the Lone Star State. Angela Marcano named her new English bulldog Roy, but Roy wasn't really hers, according to a report from Click 2 Houston:

My Pet Funding wouldn't approve the Marcanos for a lease to cover the full cost of Roy, so Pets R Us signed her up for a traditional loan from Easy Pay Finance to cover the remaining $600. The Easy Pay loan comes with a 130% interest rate.
At the end of two years, she would have paid $1774.08. The total lease payments at the end of two years would be $7425.43. Combined, Roy would cost Marcano $9199.51.

Not only that, but Marcano claims Pets R Us effectively executed the lease on her phone, without revealing any of the terms of the deal. "She was like 'Oh, you know let me see it,'" she said an employee told her. "She'd bring it up and she'd bring it straight to the section for me to sign... and I would sign it. And she'd be like 'Here, let me help you with the next section.' Then she would just scroll down to the next section, bring it up again for me to sign on my phone."

While other states, like California and Nevada have made pet leasing illegal, the Texas Attorney General's Office hadn't even heard of the practice until Click 2's report. Now that you have, be careful when "buying" your next pet.

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