Consumer and animal welfare advocates are decrying high-cost loans they say are being offered at pet stores across the United States to help people buy puppies.
Transportation Alliance Bank, or TAB Bank, based in Ogden, Utah, is helping a lending company called EasyPay Finance bypass state interest rate caps and provide pet loans with fees annual interest rates of between 130% and nearly 189%, the National Consumer Law Center said in a report. These rates are illegal in most states for non-bank lenders.
But EasyPay issues its loans through TAB, allowing the money to be classified as bank loans exempt from state laws, according to the advocacy group. This practice is known as “rent a bank.”
The NCLC is one of those petition the Federal Deposit Insurance Corporation – the agency that oversees banks, including the TAB – to ban bank lease loan programs.
A separate coalition of consumer and civil rights groups earlier this month called the FDIC to stop four Utah banks, including TAB, from being a “front for predatory lenders circumventing state interest rate limits.” These lenders include Carlsbad, Calif.-based EasyPay, which has worked with TAB to provide loans of up to 188.99% APR through businesses selling auto repairs, furniture, appliances, tires and pets, among other products, the group said.
“TAB Bank is abusing its banking charter by promoting predatory lending that bleeds consumers dry,” Nadine Chabrier, policy and litigation adviser at the Center for Responsible Lending, said in a statement on Tuesday. “Responsible merchants should stop peddling predatory EasyPay loans, and the FDIC should end TAB Bank’s involvement in this scheme.”
The FDIC declined to comment. EasyPay and TAB Bank did not respond to requests for comment.
“I can not”
Hundreds of consumers have complained on regulators’ and consumers’ websites about loans from EasyPay, also known as Duvera Billing Services, which describes itself as a consumer lending service that caters to retail stores. auto repair and retail.
According to a complaint housed with the Consumer Financial Protection Bureau in October 2020, a Florida couple buying a puppy for $3,000 accepted the pet store’s suggestion to apply for financing, which covered $2,200, leaving them to pay an additional $800 in cash .
Assured the pup had all his shots and was in excellent health, they took him home that day. But the pup soon developed serious health issues that resulted in thousands of dollars in vet bills and her death a year later. Duvera Billing Services “shows that I owe $5,500 on my credit report due to interest,” even after a year of payments, the complaint states.
The case was marked closed, with Duvera explaining that she “believes she acted appropriately as authorized by contract or law,” according to the CFPB site.
One October 2021 complaint at the Better Business Bureau involved buying a puppy with no interest for 90 days, which then jumped to 79%. The dog’s owner described being stuck paying semi-monthly payments of $179, only $34 of which was in principal.
“I’m lost,” said the person, who noted that he will have paid $6,400 for his pet when the contract ends.
Besides hurting consumers, predatory puppy loans help fund what animal rights groups call puppy mills – high-volume dog breeding facilities that produce puppies for high profits. An estimated 10,000 of these facilities supply the majority of puppies sold in pet stores and online, according to for the Humane Society of the United States.
“Pushing funded purchases is just another way for puppy mills and their pet stores to sell puppies for thousands of dollars to unsuspecting consumers, many of whom end up with extremely high interest rates and hidden costs that they often cannot afford,” John Goodwin, senior director of the Stop Puppy Mills campaign’s animal welfare group, said in a press release. “Some pet stores have reported that 80% of the puppies they sell are financed, indicating that these predatory loans are a key part of the pipeline from puppy mill to pet store.”
HSUS advise those looking for a dog to find a responsible breeder, but only after checking animal shelters and rescue groups first.