Saturday, October 01, 2022

They got a puppy — and a nearly 200 percent loan. (WaPo)

Truly sick abuses of power by predatory, unethical corporations, empowered by their usual phalanxes of corporate lawyers. These doggone devious dog contracts should be held to be unconscionable.  See, e.g., Williams v. Walker-Thomas Furniture Co,  350 F.2d 345 (D.C. Cir. 1966). 

Are they doing these usurious loans in Florida? 

Is the Florida legislature concerned, or complicit?

From The Washington Post: 

They got a puppy — and a nearly 200 percent loan

States are targeting pet store loans that can balloon by tens of thousands of dollars, sometimes for sick dogs

A puppy is on display at a pet shop in July in New York. (John Smith/Getty Images)

Millie Hill said it was love at first sight as her husband of 50 years held a pint-size Chihuahua puppy at a Puppyland pet store last summer.

Howard Hill, 95 and dealing with vascular dementia, was worried about how quiet their home in Kent, Wash., might become when their aging dog, Mr. B, passed away. So after hurriedly signing papers at the national pet store chain, the Hills walked out with the new $4,595 puppy.

When she sat down to look at the paperwork a few days later, Millie Hill quickly realized her mistake: The bundle of high-interest loans she’d signed would eventually swell to a total cost of more than $19,000.

“I felt betrayed. You don’t expect this from people who sell animals and love animals,” said Millie Hill, 85, whose husband died in November. “This should not be allowed; it should be illegal.”

A growing chorus of state legislatures agree and are taking action to outlaw high-interest loans and leasing arrangements from brick-and-mortar and online pet stores. The deals can leave pet owners on the hook for double or triple the cost of an animal and can cripple the credit of those who can’t pay up.

Illinois banned the high-interest loans this year and California Gov. Gavin Newsom (D) signed a bill on Monday that generally prohibits online pet stores — regardless of location — from being involved in financing the sale of dogs, cats or rabbits

Another 10 states have banned retail pet stores from offering leasing plans that are similar in cost and structure to car leases, meaning a failure to pay could result in a pet being seized.

“They are preying on people who are making an emotional decision,” said California state Rep. Brian Maienschein (D), who sponsored the bill. “These are not reasonable loans, the terms are predatory, in some cases doubling the cost of the pet. That’s absurd.”

The founder of Puppyland, which has six stores in four states, defended the company’s practice of using finance companies that offer the high-interest loans, arguing that it gives pet owners more flexibility.

“These interest rates are not unique to Puppyland and Puppyland has no control over the interest rates our customers receive when working with 3rd parties for financing,” Kayla Kerr said in a statement, adding that the company has no plans to change its loan policies. “If we were to suspend this option, it essentially narrows the choice for the customer and we would not want to do that.”

EasyPay Finance, a company that offers high-interest loans through pet stores across the nation, said they allow customers who might otherwise not qualify for a traditional loan to buy the pet of their choice. The company says its loan rates can be as high as 199 percent.

“Many Americans are left behind by the traditional banking and credit system. EasyPay facilitates financing options to ensure that these consumers have a trusted and secure choice to access otherwise unavailable credit for pressing needs and discretionary purposes,” a statement from the company said, adding that it offers “a range of credit tiers based on a borrower’s credit profile.”

Mike Bober, president of Pet Advocacy Network, a trade group that represents pet stores, declined to comment on the use of high-interest loans, saying, “This issue has been raised to us before, but our position is that it is outside the scope of pet care.”

Some states are going a step further, banning the sale of dogs — and sometimes cats and rabbits — from retail pet stores altogether. Backerssay in addition to costly loans, consumers often end up with pets that have myriad costly and stressful health problems. So far, five states have enacted these pet store bans, and New York may join them if the “Puppy Mill Pipeline Bill” — passed by the legislature in June — is signed by Gov. Kathy Hochul (D).

Bober criticized those measures, arguing they do nothing to improve the quality of pets and hurt small businesses.

“The reality is that the impact that they have doesn’t end up where it’s purported to,” Bober said. “It’s not that these bills are affecting breeding conditions anywhere, especially with the unlicensed illegal breeders. Instead, what it’s doing is creating situations where small, local businesses cannot remain open.”

Pet stores that sell expensive dog breeds have offered traditional financing options to customers for decades. However, loan companies acknowledge that the newer, high-interest loans are aimed at customers with no or poor credit. And customers and animal rights groups say the loans are pitched by sales staff as affordable by focusing on the cost for monthly payments verses the overall price of the dog. These practices have allowed pet stores to sell breeds that cost thousands of dollars — such as French bulldogs — at prices far higher than private breeders charge due, in part, to impulse buys as people browse pets.

The Humane Society, Animal Legal Defense Fund, National Consumer Law Center, and other groups say complaints about triple-digit loans or leasing options have risen over the past several years. In February, thegroups formed a coalition to raise public awareness and to apply pressure on government officials and agencies.

Congress has also taken action to close a loophole that enables the high-interest loans. Last year, President Biden signed a bipartisan resolution to repeal a Trump-era rule that made it easier for finance companies to make loans that exceed state interest rate caps, saying the system was set up to “allow lenders to prey on veterans, seniors, and other unsuspecting borrowers .... trapping them into a cycle of debt.”

A congressional bill was introduced in 2019 and again in 2021 that would provide a permanent, national solution by setting a 36 percent interest rate cap that covers all lenders, including banks. The bill has stalled under intense lobbying by the financial industry.

Millie Hill and her pet Chihuahua, Chloe, who Hill got at a pet shop in Washington state last year. (Millie Hill)

The lending and leasing practices have persisted despite rolling back the Trump-era rule, prompting several state attorneys general to take legal action against some of the pet stores and financing companies.

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