Dogs were illegally rented to people by California company, Massachusetts officials say

Editor’s note: This story has been updated to include a response from Monterey Financial Services.

A California-based company accused of illegally leasing dogs in Massachusetts agreed to provide over $930,000 in debt relief and restitution to resolve the allegations, officials said in a news release.

The company, Monterey Financial Services LLC, was accused of violating consumer protection laws by buying and collecting on leases for dogs, according to a news release from Massachusetts Attorney General Maura Healey’s office.

In court documents, the company denied the allegations but agreed to settle. The company was ordered to waive any penalties for terminating leases, transfer ownership of the dogs to the people leasing them and notify those people that they have no further obligations to the company, according to an assurance of discontinuance.

“While we disagree with the state’s findings, we have elected to come to an agreement to move away from this issue to best serve our clients,” the company said in an emailed statement to McClatchy News. “Monterey has and continues to strive to employ business practices in full accordance with all applicable laws and regulations.”

The practice of leasing a dog is much like leasing a car — except that there’s a living, breathing animal involved.

Under a pet leasing arrangement, consumers are ordered to pay a certain amount every month to the company leasing the animal. To own the animals, people have to pay an additional amount to the company at the end of the lease, and failure to make payments on time could result in the dog being repossessed — much like a car would be, the attorney general’s office said.

However, Monterey Financial Services told McClatchy News that the company does not repossess pets.

“To be clear, Monterey has never repossessed nor threatened to repossess a pet,” the company said. “As a matter of policy, Monterey does not repossess anything subject to an agreement owned or serviced by Monterey.”

People often enter dog leasing agreements unknowingly, according to the Animal Rescue League of Boston. Someone might think they’re signing a contract to pay off a hefty adoption fee over time but might not read the fine print closely enough to realize it’s actually a leasing agreement.

According to the organization, leasing agreements can leave pet owners on the hook for payments even if their pet gets sick, runs away or dies. The practice also puts dogs at risk of being suddenly separated from owners and homes they’ve bonded with, the organization said.

“Families in Massachusetts looking to get a dog should not be trapped in leasing agreements that are harmful, expensive, and illegal,” Healey said in the release. “We will take action to stop this exploitive practice of using dogs as emotional leverage, and are pleased to get results for pet owners involved with these finance companies.”

The attorney general’s office learned about Monterey Financial Services’ dog leasing practices while investigating a Nevada-based company, Credova Financial, for the same reason. That company was ordered to waive over $126,000 in payments from people who wished to purchase their dogs, the news release said.

According to court documents, Monterey Financial Services had been facilitating illegal lease agreements between Jan. 26, 2016, and Oct. 29, 2021. The company said it had 211 leases related to dogs it owned, which had a principal balance of $710,335.20, court documents said.

In addition to being ordered to stop collecting payments on those agreements, Monterey Financial was also ordered to distribute $175,000 to people affected by the lease agreements and to pay $50,000 to the state of Massachusetts, court documents said .

In a statement, the company said it disagreed with the state’s findings, The Associated Press reported.

“Monterey has and continues to strive to employ business practices in full accordance with all applicable laws and regulations,” the company said, according to the AP.

People in Massachusetts who have been affected by dog leasing practices are encouraged to reach out to the attorney general’s office.

This story was originally published April 14, 2022 at 4:05 PM with the headline "Dogs were illegally rented to people by California company, Massachusetts officials say."