Buy a puppy? Financial firm illegally overcharging up to 189% interest, consumer groups claim.

If ever you are offered a loan to buy a puppy, beware.

A coalition of consumer advocacy groups says a finance company, working through pet sellers and other retailers, is offering ‘predatory loans’ that violate New Jersey law and laws from 31 other states.

“It is illegal in New Jersey for businesses that are not banks to make loans with interest greater than 30%,” said Lauren Saunders, associate director of the National Consumer Law Center.

A report from the group says the loans are facilitated by EasyPay Finance, which is not a bank but instead uses Utah’s Transportation Alliance Bank (TAB Bank) to provide the financing, according to the groups. EasyPay also offers similar products to mechanics, furniture stores and other retailers, the consumer groups said.

“If a court were to find that EasyPay Finance is the true lender, and not TAB Bank, then EasyPay would be breaking the law by charging (annual percentage rates, or APR, of) 130% to 189%,” Saunders said.

EasyPay and its parent company Duvera Billing Services did not respond to requests for comment by phone, email and social media.

A TAB Bank spokesperson referred the questions to a page on its website that did not specifically address the allegations.

He said TAB Bank has partnered with companies that use the bank’s “financial strength” to offer unsecured loans and credit cards to consumers with little or no credit,” saying the products are better for consumers than so-called payday loans.

“TAB Bank provides the funding and our program managers oversee the operations and servicing of the loans on behalf of the bank,” he said. “Most of these program managers fund unforeseen or costly necessary purchases, such as auto repairs or home furnishings.”

The New Jersey Consumer Affairs Division said it filed one lawsuit against TAB Bank and seven against EasyPay. He did not comment further on the allegations.

Consumer groups say EasyPay uses TAB Bank to “disguise loans as bank loans exempt from state rate caps.”

They said that in states that allow these high rates, EasyPay extends funding directly.

Consumers have filed hundreds of complaints about EasyPay with the Consumer Financial Protection Bureau (CFPB) and the Better Business Bureau, alleging illegal interest rates, deceptive interest-free promotions, and abuse of money collection. receivables and credit reports.

Funded puppies have been sold for up to $5,000, consumer groups said.

In a complaint to the CFPB, a New Jersey consumer said he went to a pet store to buy a cocker spaniel. The Salem County resident was offered and accepted financing through EasyPay.

“I have discovered that I am charged 151.97%, which is five times the legal limit of 30% that may be charged in New Jersey,” the complaint states.

Another Salem County resident told the CFPB in a complaint that he felt “ripped off” with 129.97% interest on a loan to purchase a dog.

A Cranford customer said he took out an $1,800 loan that was supposed to be interest-free and penalty-free for 90 days.

“I tried to repay the loan and they said I missed 2 payments so the loan was in default and I owed almost double the original loan amount in fees and interest! Now they have another entity trying to collect the debt and in less than 14 months the debt was reported to 2 of the credit reporting agencies in excess of {$5,000.00},” the complaint states.

Consumer groups say they want the Federal Deposit Insurance Corporation (FDIC) to stop TAB from working with EasyPay on its high interest rate products.

The FDIC said it had no comment on the report.

“TAB Bank is abusing its banking charter by putting on a facade of predatory lending that bleeds consumers dry,” said Nadine Chabrier, policy and litigation adviser for the Center for Responsible Lending. “Responsible merchants should stop peddling predatory EasyPay loans and the FDIC should end TAB Bank’s involvement in this scheme.”

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Karin Price Mueller can be reached at [email protected]. Follow her on Twitter at @KPMueller.

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