At one pet store, a new friend will cost you - up to 128% interest

PUYALLUP, Wash. — What customers at Puppyland see are cute dogs with price tags up to $5,000. And if you finance that pet at the store, the interest can run as high as 128 percent.

Last Summer, Millie and Howard Hill bought a Chihuahua from Puppyland in Puyallup.

“What do I think of Puppyland? They’re the worst of the worst,” Millie says.

It was $4600 for the dog. Add-ons and tax took the price tag to $5500. So the couple financed the purchase.

One loan was for $2,800 dollars at 128 percent interest, the other for $2,500 at 71%.

Add in $200 cash, and that brings the total cost for the dog with interest to $14,185.18.

Millie says she paid less for her car.

“I’ve been in this industry for about 10 years now. And I just love animals.”

Kayla Kerr owns Puppyland, which has locations in four states. She says she started her business three years ago in Puyallup based on her love of animals.

I asked her about their in-house financing.

“So Puppyland is not the one financing these for customers. These are all third parties. We have no determination or say in what their interest rate is. This is all determined by the financing company,” says Kerr.

But it’s her business. Customers who sign up for financing walk out, and are hit with interest that could buy them two dogs.

“Correct. Yeah. so, I’m not in the position to make a financial decision for them. I don’t know what their financials look like when they get home,” says Kerr.

So we dug deeper into the paperwork, and we saw this: a fee for a “Pet Industry Defense Fund” ranging from $10 to $15 going back as far as 2018.

What is it? And why should customers pay it?

“It’s just that. So this is a fee that goes back into protecting the industry and advocating for our industry,” says Kerr.

Kerr confirms the fee goes to their lobbyist, and other organizations. She says it’s optional.

But I asked Millie if she was ever told about the fee, or given the option to not pay it.

“No. I never even heard of it,” says Millie.

And on the day of our interview, Kerr decided to make a change with the fee.

“Now that we know that it’s a concern that people are not wanting to see it, we’ve already taken it off our pricing sheet completely,” says Kerr.

As for Howard and Millie Hill, Howard was later diagnosed with vascular dementia.

Aimee Budrow is the couples’ daughter.

“Very soon after my dad got critically ill. And I took over as power of attorney and looked at their finances and discovered exactly what took place,” says Aimee. “I offered to return the puppy. I offered to try to settle. They were not willing to speak with me.”

Three loans, three different rates

“And it breaks my heart to hear about their situation. You know I’m so sorry about the dad having dementia and, you know, that she wasn’t helped the way that she should have been helped when she did contact our store,” says Kerr.

In the end, Millie got a third loan - outside of Puppyland - in an attempt to pay off the other two. Her interest rate for that final loan was 22 percent.

Four months after the puppy purchase, Millie’s husband Howard died. She gave the dog away to family.

Now everything is gone. Except the payments.

“The worst experience of my life. As bad as losing my husband. It’s terrible what they do to people,” says Millie.

Puppyland owner Kayla Kerr says the business has lenders offering much lower interest rates than Millie’s. And she defends her puppy pricing because she says the dogs come with health guarantees.

Are these 71 percent and 128 percent interest rates legal? Yes. Although Washington state has laws governing interest rates, loans made according to the Retail Installment Act do not have to comply with those caps.