Monthly Payments for a Puppy You Don’t Own
Recently I learned that two western Washington pet stores offer customers the opportunity to lease/rent puppies instead of buying them.
Neither store tries to conceal their puppy leasing programs. They use them as a marketing tools to convince people who may not have enough available cash that they can still afford a puppy.
But you won’t see the words renting or leasing on their websites.
Instead, Farmland’s site says “We Now Finance Puppies!” The Puppyland site says you can make “Puppy Payments.”
In a post its Facebook page, Puppyland said, “Puppy payments are around $100 per month and you can take your puppy home today!”
These phrases are simply marketing ploys to disguise that you’re making monthly payments to lease a puppy you don’t own.
The Literal Definitions of Leasing and Renting
Despite the effort to brand leasing/renting puppies as financing, the definitions of these words clearly show what these “financing programs” really are:
Financing is “the act of obtaining or furnishing money or capital for a purchase or enterprise.”
Even when you finance a purchase, you’re still the legal owner.
Renting is taking and holding (property, machinery, etc.) “in return for the payment of rent to the landlord or owner.”
Leasing is “granting the temporary possession or use of (lands, tenements, etc.) to another, usually for compensation at a fixed rate;
Even the Federal Trade Commission classifies financing puppies as same as leasing. Its site defines financing as “A lease of personal property to an individual for more than four months for personal, family or household use where the total contractual obligation is not more than $55,800.”
The stores can call their programs financing or “puppy payments,” but they are the literal definition of leasing or renting.
Rent-a-Center for Puppies
Financing a puppy with Farmland Pets or Puppyland means the financing company owns it and you make payments for the privilege of keeping the dog at your home.
If you can’t make the payments, the finance company takes it back. It’s like leasing a TV from Rent-a-Center; if you stop making the monthly payments, Rent-a-Center will repossess it.
I can’t say conclusively why Puppyland and Farmland Pets don’t mention leasing or renting puppies.
My opinion is most people would find those terms offensive when applied to a cute little fur ball that they want to make part of their family.
Saying renting/leasing also makes it clear to potential customers that they don’t actually own their new puppy.
Puppy Leasers Pay More
These renting/leasing schemes also sneakily raise the cost of puppies astronomically.
For example, a couple recently bought a husky puppy from Puppyland and financed the purchase.
They originally paid $3048.33 for the puppy; However, if they made all the payments, they would end up paying more than $7000 for it!
Even after making all the payments, they wouldn’t own the dog until they paid another $487.50 to the financing company!
Community Finance is one company that finances puppy purchases for Farmland Pets’ customers. It has a chart showing payments the customer must make and how long she will have to make the payments.
However, the payment chart is misleading because it shows semi-monthly payments even though people usually pay off loans in monthly installments.
For example, a $2000 loan requires semi-monthly payments of $59 for 34 months. After making all the payments, the total the buyer pays for the puppy would be $4012!
But since the total of the payments isn’t listed on the form, buyers won’t know how much they will end up paying for the puppy without multiplying the $59 semi-monthly payment x 34 months and then remembering to multiply that number by 2 to convert the semi-monthly payments to monthly ones.
When trying to determine the total price for that puppy, I forgot to multiply the semi-monthly payments by 2 a few times before I realized my mistake.
I imagine some potential lessees don’t realize to convert the semi-monthly payments to monthly payments. This would lead them to believe the puppy would cost about half of the actual total if they made all the monthly payments.
In either case, the buyers would end up paying approximately 130% more than the retail price for the puppy.
If someone doesn’t have enough money to buy one of these puppies, how can they afford to pay more than twice as much for it? Even spread out over two years, the payments can be up to $100 or more per month.
And if someone gets behind on their payments? The finance company takes back the puppy and the lessee loses whatever payments she made.
Here’s the experience a San Diego women who didn’t realize she leased her dog as told to Bloomberg News in 2017:
“I asked them: ‘How in the heck can I owe $5,800 when I bought the dog for $2,400?’ They told me, ‘You’re not financing the dog, you’re leasing.’ ‘You mean to tell me I’m renting a dog?’ And they were like, ‘Yeah.’ ”
“Without quite realizing it, the Sabins had agreed to make 34 monthly lease payments of $165.06, after which they had the right to buy the dog for about two months’ rent. Miss a payment, and the lender could take back the dog. If Tucker ran away or chased the proverbial fire truck all the way to doggy heaven, the Sabins would be on the hook for an early repayment charge. If they saw the lease through to the end, they would have paid the equivalent of more than 70 percent in annualized interest—nearly twice what most credit card lenders charge.”
Why I Don’t Like Puppy Leasing/Renting Programs
You’ve probably figured out by now I don’t like the puppy leasing/renting business model.
1. Stores will encourage virtually anyone who qualifies for “financing” to buy puppy without knowing if the customer has the experience, environment, and/or space to handle it.
2. It’s unclear what happens to a puppy when the financing company confiscates it because an
owner lessee can no longer afford the payments.
Puppyland/Farmland sells the puppy to a financing company when someone finances it, so that company owns the puppy.
Does the financing company have the time and experience to find it an appropriate home Or will it dump the dog at a shelter?
3. Renting/leasing puppies allows companies to avoid Washington’s usury law which limits the amount of interest the financing companies can charge. (more on this later)
4. It obligates someone who can’t afford to pay for a puppy at the store to pay twice as much or more for it through financing schemes.
5. This business model is based on deception as does not make it clear to potential lessees that they will not own the dog until they make all the payments as well as another balloon payment at the end of the lease.
I think the New York Assemblyman who sponsored the bill banning pet leasing in that state summed the pet leasing industry well when he said, “Pet leasing is a predatory practice that preys on people who cannot always afford a companion animal.”
Puppyland May Have Violated FTC Advertising Requirements
As I noted above, the Federal Trade Commission classifies the financing schemes puppy sellers use as leasing.
Consequently, the agency requires sellers to disclose specific items when advertising their puppy financing programs. Here’s how it is supposed to work:
“If your ad includes any of these triggering terms:
- A statement of any capitalized cost reduction or other payment required before or at lease consummation, or by delivery if delivery takes place after con- summation, or that no payment is required, or
- The amount of any payment.
It must include these disclosures clearly and conspicuously:
- That the transaction advertised is a lease,
- The total amount due before or at consummation, or by delivery if delivery takes place after consummation,
- The number, amounts and due dates or periods of scheduled payments under the lease,
- Whether or not a security deposit is required, and
- In leases where the consumer’s liability is based on the difference between the property’s residual value and its realized value at the end of the lease term, that an extra charge may be imposed at the end of the lease term.”
While I’m not an expert on FTC advertising regulations, it appears this ad from Puppyland’s Facebook page would trigger the agency’s disclosure requirements since it advertises a payment amount, but none are listed.
I found 2 other similar posts on Puppyland’s Facebook page.
Usury is the action of lending money at unreasonably high rates of interest.
Washington has a usury law (RCW 19.52) that limits the amount of interest a lender may charge a borrower.
Currently, lenders in Washington may not charge more than 12% interest on a loan.
However, people that finance puppy purchases for Farmland Pets and Puppyland end up paying a much higher interest rate.
For example, based on the numbers in Community Finance’s Pricing Guide a person who leases a dog for $2000 will pay $59 twice a month for 34 months.
That’s an interest rate of almost 36% per year.
How can Community Finance legally charge what calculates to 3 times more than Washington’s interest rate limit?
In this interview, a Long Island women explains how the finance company duped her into leasing a new puppy when she couldn’t afford to pay the full price.
Bill Will Ban Puppy Leasing in Washington
I think it’s perfectly fine to lease inanimate objects like cars or appliances. But leasing puppies, in my opinion, is fraught with moral and financial issues.
“These predatory financing schemes only benefit the lending company and the pet store, while severely exploiting both the animals and their potential owners,” Jaime Olin, ASPCA legal advocacy counsel, said in a statement to USA Today. “Few consumers seem to be aware of how these financing arrangements are set up, and oftentimes the word ‘lease’ is never mentioned during the process.”
And the desire for getting a cute puppy can cloud the judgement of a potential lessee.
The founder of a company that finances puppy purchases said, “We like niches where we’re dealing with emotional borrowers.”
Even the American Kennel Club, the leading proponent for breeders, opposes pet leasing. Its Canine Legislation Position Statement says: “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.”
As complaints about pet leasing schemes have increased, some legislators support banning the practice. So far, California, New York, and Nevada have banned pet leasing.
Here in Washington, Representatives Appleton, Stanford, and Fitzgibbon have introduced HB 1476, which would ban pet leasing.
Please call your legislators at 800-562-6000 and ask him/her to support HB 1476.
Washington pet stores must stop preying on someone’s desire to own a puppy by encouraging them to finance a puppy they won’t own and can’t afford with companies that charge outrageous interest rates.
I emailed Puppyland and Farmland pets some questions about their leasing programs but never heard back from either store.