Quick Answer: New York Attorney General Letitia James forced Monterey Financial Services to cancel $2.4 million in debt for 835 consumers. The company disguised predatory leases as normal financing, charging hidden fees that made a $2,000 puppy cost nearly $3,600.
Here is a perfect example of the debt collection industry doing what it does best: finding creative ways to take advantage of people who need financial help.
New York Attorney General Letitia James announced a settlement with Monterey Financial Services that wipes out $2.4 million in debt for 835 New York consumers and imposes $175,000 in penalties. The company was charging illegal fees through deceptive lease agreements disguised as normal consumer financing.
What Monterey Was Actually Doing
Here is how the scam worked: When you thought you were financing a purchase—like a puppy, a wedding dress, or car repairs—you were actually signing a lease agreement. You would not own the item until the final payment. Meanwhile, Monterey was piling on fees you never agreed to.
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The Real Cost: One consumer believed they were purchasing a $2,000 puppy. After all fees and payments, they paid $3,592.95—nearly 80% more than the sticker price.
The deceptive practices included:
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- Disguising leases as traditional consumer loans
- Charging unlawful fees at the beginning and end of lease terms
- Imposing illegal “pay-to-pay” fees just for making monthly payments
- Leasing services like car repairs that have no resale value
- Advising pet owners who could not pay to surrender animals to shelters
Monterey preyed on consumers needing financial assistance by charging illegal fees and deceiving them to make a profit.— NY Attorney General Letitia James
Who This Affected
Think about who uses point-of-sale financing. People who cannot afford to pay the full price upfront. People who need a car repair to get to work. People who fall in love with a puppy at a pet store.
These are exactly the consumers Monterey targeted. And when they fell behind on payments—payments that were far higher than they were told—the company went after them.
Key Insight: Costs under these deceptive leases often exceeded 200% of the original price. Consumers had no idea they were signing up for this.
What the Settlement Requires
Under the settlement, Monterey must:
- Stop collecting on any debt from these leases
- Cancel all outstanding New York leases
- Request credit bureaus remove negative information tied to these leases
- Stop leasing pets, services, and goods with no resale value
- Pay $175,000 in penalties
The Bigger Picture
This is not an isolated case. Point-of-sale financing—especially “lease-to-own” arrangements—is riddled with these kinds of deceptive practices. The NY AG’s office has made clear this is just part of a broader crackdown.
What makes these schemes so insidious is they target people who are already financially stressed. They come dressed up as helpful financing options. By the time consumers realize the true cost, they are already on the hook.
The Reality: If you are offered “financing” or “easy payment plans” at a retail store, read every word before you sign. Ask specifically: Is this a loan or a lease? What are ALL the fees? What is the total cost including everything?
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What To Do If You Were Affected
If you have an account with Monterey Financial Services tied to a New York purchase, you may be entitled to relief. Contact the NY Attorney General’s Consumer Frauds Bureau if you have not been contacted about the settlement.
If you are currently being pursued by debt collectors for any debt you believe is fraudulent or inflated:
- Request debt validation in writing
- Do not admit to owing the debt
- Document all communications
- Consider consulting a consumer protection attorney
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Key Takeaways
- Monterey Financial disguised predatory leases as normal financing
- Consumers paid up to 200% over sticker price in hidden fees
- $2.4 million in debt has been cancelled for 835 New York consumers
- Always ask if “financing” is actually a lease with hidden fees
- Point-of-sale financing deserves extra scrutiny—read before you sign
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… (Source: NY Attorney General’s Office)
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