States take action against high-interest pet loans

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High-interest pet loans overview: 

• Who: A number of states have taken action against online and retail pet stores that offer high-interest loans and expensive leasing arrangements to their customers. 
• Why: The states argue that the retail pet stores target individuals with no or poor credit with high-interest loans that can double or triple the price of a pet. 
• Where: Twelve states have taken steps to curb the practice of offering high-interest loans by online and brick-and-mortar pet stores. 
  

A number of states have taken action against high-interest loans and expensive leasing arrangements levied by online and brick-and-mortar pet stores on their customers. 

A high-interest loan or leasing arrangement for a consumer who purchases a pet from an online or brick-and-mortar pet store can end up costing two to three times the original cost of the animal, The Washington Post reports. 

Illinois and California are two states that recently took steps to counter the practice, with the former banning high-interest loans earlier this year. 

California Gov. Gavin Newsom, meanwhile, signed a bill earlier this week that largely prohibits online pet stores from making a finance agreement when selling cats, dogs or rabbits, The Washington Post reports. 

Ten other states reportedly already ban leasing plans levied by retail pet stores that call for the animal to be taken back in the event they aren’t paid. 

Offering pet loans to consumers is not a new practice; however, the extension of high-interest loans to individuals who have no or poor credit is a newer development, The Washington  Post reports. 

Five states ban the sale of dogs from retail pet stores

Five states have gone so far as to ban the sale of dogs, as well as cats and rabbits, in some cases, from retail pet stores entirely, arguing customers frequently end up buying a pet with costly health problems. 

Complaints about expensive loan and lease options have also increased, meanwhile, in the last several years, according to the Animal Legal Defense Funds, National Consumer Law Center and Humane Society, The Washington Post reports. 

Congress reportedly made moves last year aimed at ending the practice of offering high-interest pet loans, while congressional bills introduced in 2019 and 2021 — that are currently stalled — have asked for a 36% interest rate cap for all lenders. 

In related pet news, popular pet product and food companies have announced recalls or faced class action lawsuits this year, including Aldi, Blue Buffalo and Bayer, among others. 

Have you purchased a pet with a high-interest loan or expensive lease arrangement? Let us know in the comments! 

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