The Sabins had bought their new dog, Tucker, with financing offered at the pet store through a company called Wags Lending, which assigned the contract to an Oceanside, California-based firm that collects on consumer debt. But when Dawn tracked down a customer service rep at that firm, Monterey Financial Services Inc., she learned she didn’t own the dog after all.There's just so much in this story. First, why are middle class people paying $2,400 for purebread pet store puppies? And then there's this business of pet rental, which is purely a dodge because they can extract a lot more from buyers under rent-to-own agreements than they could legally charge in interest on a loan. The owner of Wags Lending is (of course) a fan of Ayn Rand and says (of course) that he is "living in a Postmodern culture while maintaining my old American West roots and Christian values." His business strategy? "We like niches where we’re dealing with emotional borrowers."
“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.
As Matt Levine says, this story should be
engraved on an obelisk so that, thousands of years in the future, when people or aliens find the remains of our civilization, they'll understand what we were all about.