42 states still allow pet leasing — meaning Fido could get repossessed just like your house or car

• Pet leasing is when a buyer agrees to a payment plan and the seller retains ownership until all payments are made.
• One firm just settled a charge of illegal pet leasing this week and had to return hundreds of dogs.

Hold on to that leash.

Whether or not you're aware, you may be a pet leaser, rather than a pet owner — and, if you live in the 42 states where pet leasing is still legal, a collection agency could seize the four-legged member of your family if you're unable to pay your bills.

Massachusetts Attorney General Maura Healey announced this week that California-based Monterey Financial Services, LLC has agreed to provide more than $930,000 in debt relief and restitution to resolve accusations that it was illegally leasing dogs in Massachusetts. In addition to waiving outstanding debt held by customers, the settlement includes transferring full ownership of hundreds of repossessed dogs back to Massachusetts residents.

"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," Monterey told Insider in a statement. "Monterey has and continues to strive to employ business practices in full accordance with all applicable laws and regulations."

When families buy their pets, they are likely unaware that a lease was taking place. According to the American Society for the Prevention of Cruelty to Animals, the word "lease" is not mentioned in promotional materials when the pets are purchased.

It typically happens when a seller, often a pet shop or breeder, partners with a private lending company like Monterey to offer monthly financing plans, often padded with hidden fees, to the buyer, the ASPCA said in a statement in 2018.

Some of the payment plans are in fact leases, which means that the puppies are property of the leasing company until they're paid off. The charges can range from hundreds of dollars to over a thousand dollars, depending on the lease term and the dog's price tag.

States began banning the practice in 2017, starting with Nevada and California. New York joined the charge in 2018, after the state's attorney general office filed a lawsuit against a large pet-leasing chain. The ASPCA estimated that about 25-30% of its pet sales at the time involved leases. Massachusetts, Connecticut, Indiana, New Jersey, and Washington have also outlawed the practice, according to the ASPCA.

But that leaves Americans in the rest of the country vulnerable to having their pets taken. The ASPCA, who is critical of pet leasing, told the New York Times that the practice of leasing pets likely started in 2013, through a Nevada-based company that would transfer its debt to Monterey after animals were purchased.

"Getting a dog can be a significant emotional and financial investment for many families, so when the dog is used as collateral in a lease, the end result can be expensive and heartbreaking," Massachusetts AG Healey said in a press release last year.