I recently came across Wagslending.com a firm that is in the business of affordable leasing for pet lovers. At first I thought it was a joke. Why lease a pet? But it is on the level. Wagslending is now in 40 states and is one of many consumer finance agencies extending credit to purchase pets. Retail pet stores partner with pet lenders to move inventory in an increasingly competitive business.

Pets are a huge business in America, estimated at $60 billion last year. Think of the scope of the industry: breeding, supplies, food, veterinary care, temporary care kennels, even psychologists, insurers, and funeral homes. And this does not include the cost of nonprofit shelters or publicly-funded animal control systems; let alone America’s burgeoning economy of paid pet walkers and caretakers.

While America leads the world in the pet economy, numbers are rising globally, particularly in nations with a growing middle class, smaller household sizes, and increased numbers of elderly. U.S. numbers rose dramatically after the Second World War, along with the baby boomer middle class. The aging of baby boomers has continued the upward trend along with new generations of young professionals, some of whom are driving up the value of small, purebred dogs that fit an urban environment. In a few decades we moved from designer jeans to designer dogs.

But back to Wags! What is a pet rental agreement? Their video promises a quick approval for an amount (say $2,000) to purchase the dog, but the animal is owned by the rental agency until you buyout the lease. Lease payments are based on a rental fee and a depreciation cost. You can buy your way out of the lease for a declining amount until the end of the rental agreement at which time you must either make a buyout payment or return the dog to the finance company.

The site video plays to the tune of John Mellencamp’s Jack and Diane, describing how easy it is to make that special dog part of your home. But do the math on a Wags lease. Hold a lease for two years, pay the buyout and you will pay double the original cost. Convert that to an interest rate and it comes to 50 percent per year over a two-year period. You avoid the most excessive costs if you exercise early buyout options.

As you might imagine, there have been questions raised about Wagslending and many other pet lenders. A newscast in Kansas City covered a consumer complaint about the firm as did the San Diego Tribune. Internet consumer bulletin boards are filled with complaints, though Wags and others can supply counter evidence of happy consumers.

So it goes in consumer finance. The Wagslending complaints are not so different from complaints you can find about companies that finance everything from insulin pumps to hair extensions. Yes, hair extensions, wigs, and weaves are entrenched parts of consumer finance showing up on credit reports across the nation. Who would have thought there was a subprime market for hair—let alone dogs?

This is not a column about financing pets but, rather, about the pet bubble, and its implications for the humane treatment of animals. I have one very simple point: Adopt dogs from shelters and rescues before you pay for expensive dogs from commercial breeders. Otherwise you may unwittingly contribute to the problem.

Pennsylvania, which has had a persistent puppy mill problem, has done a better job than most states by passing a law with strong health and welfare standards.

Companies that finance pets are a symptom of a larger issue: The disconnection between dogs we unnecessarily kill each year and the ongoing oversupply being driven by commercial breeders. That oversupply is enabled by a lot of things: putting profits over humane care, irresponsible pet ownership, a lack of information or financial support for spay-neuter procedures, and a lack of consumer understanding of the business of pets.

To illustrate the problem, let’s stay with dogs as the primary example. There are somewhere between 70 and 80 million pet dogs in the United States. About 1.8 million puppies are bought each year. At the same time, a significant number of dogs are given up for various reasons: Owners die, couples divorce, residency requirements limit pets, or there are behavioral problems with the dogs.

It is hard to know how many dogs are given up, let loose, or are runaways. But we do know that stray dogs and cats are rarely spayed or neutered. And we know, according to the ASPCA and other sources, that each year our nation’s 13,000 animal shelters receive about 3.9 million dogs. What happens to those 3.9 million dogs, according to best estimates? About 1.4 million are adopted, 1.2 million are destroyed, and the others are returned to their owners.

The fact that so many existing dogs do not have to be put down—but are—is what keeps commercial breeders busy. A significant number of commercial breeders exist in the United States, perhaps as many as 10,000. About 28 percent of dogs owned by Americans are acquired through commercial breeders, about 50 percent are acquired through friends and family. The rest come from shelters and animal rescues.

One of the great misnomers in the pet supply chain is the term “euthanasia”. In a technical sense, euthanasia refers to intentional death in the face of incurable diseases often accompanied by pain that diminishes any capacity to function. But in the pet world, we often use the term when it is much more proper to say the dogs are destroyed or killed. Most of those killed do not have anything like incurable diseases. There is just no place for them.

The destruction of more than a million dogs (and many more other pets) a year has to do with the inability or unwillingness to identify adopters or maintain the animals. I should note that this number represents a remarkable decline over several decades, which means we are moving in the right direction.

Robin Starr from the Richmond Virginia SPCA, one of the heroes in the no-kill shelter movement, gave a great TED talk on these issues.  A no-kill strategy is feasible. She has done it in Richmond and no-kill shelters are emerging around the nation. No-kill shelters by their nature gain market share from commercial breeders as they identify more adopters. If that were to happen on a large scale, it would put a significant dent in the breeder economy.

There are all kinds of commercial breeders in terms of quality and intent and it is important to note that there are many commercial enterprises run by animal lovers who do their work with care and respect. But at the heart of the oversupply problem are so-called puppy mills, mass production and low quality breeders. The worst keep dogs in deplorable conditions and deny basic veterinary care. They breed volume to maximize profit, with little regard to the health of the animals. Mothers are often bred relentlessly until they die. Diseases are rampant and puppies are often taken prematurely from mothers to fill purchase orders.

Puppy mills were actually encouraged by the United States Department of Agriculture after World War II, to develop a new cash crop. The national regulation of the cash crop is set forth in the Animal Welfare Act of 1966 which outlines minimum standards of care. It sets a very low bar. Under that Act, large-scale breeders who sell to wholesalers, including pet stores, have to be licensed. But there are many loopholes that can be exploited by breeders even with the low standards of the USDA.

Right now there are probably no more than 2,500 licensed breeders of the 10,000 in operation. Moreover, an Inspector General audit report at the USDA in 2010 showed how the department has done a poor job of inspections and license suspensions. There are not enough inspections, weak sanctions, and very little motivation to increase diligence. It is, after all, a department captive to industrial farming interests.

At first I thought it was a joke. Why lease a pet? But it is on the level. Wagslending.com is now in forty states and is one of many consumer finance agencies extending credit to purchase pets.

The USDA regulation does not preempt stronger state laws from being adopted, and a good number of states have done just that. Many state laws are driven not only by anti-cruelty concerns but consumer purchase complaints. People purchase dogs from pet stores who got them from puppy mills and find they bought a dog persistently ill due to lack of care. Consumers want guarantees, information, and accountability from the vendor. Thus, many state laws are essentially anti-lemon laws, borrowing from the automotive sales industry.

Pennsylvania, which has had a persistent puppy mill problem, particularly in Lancaster County, has done a better job than most states by passing a law with strong health and welfare standards. This came about during Governor Rendell’s term, thanks to the efforts of local activists. The law has relatively strong standards for care: banning wire-floors and cage stacking, doubling the size of cages, and requiring more access to the outdoors. Remarkably, none of these are mandated by USDA regulations.

And it would appear it has had a positive effect, although enforcement capacity is limited and the power of the local farming lobby still holds sway.  How do we know? Lots of commercial breeders got out of the business because the capital costs and regulatory requirements were too great. Many others simply went underground.

But it is hard to control the puppy mill problem through scattered state regulations even if enforcement improves, as long as there are a good number of states in the South and Midwest—Arkansas, Missouri, Kansas, Nebraska—that maintain limited or no state oversight. In the age of the Internet, the capacity to advertise electronically across the nation and enable a delivery system across state borders—indeed, across national borders—is a significant problem.  Consumers buy dogs through the Internet at an increasing rate just as some now shop for loans for that special dog. And it is increasingly hard to know what it is you are buying.

Moreover, the power of images and advertising still drive consumers: a picture of a cute pooch being well cared for is no different than the bucolic images of cows roaming an open field. But they are often contrived images and show us nothing about the reality of industrial production, for dogs or cows.

Each year our nation’s 13,000 animal shelters receive about 3.9 million dogs. What happens to those 3.9 million dogs, according to best estimates? About 1.4 million are adopted, 1.2 million are destroyed, and the others are returned to their owners.

So what is the answer? There is no single solution, but activists and consumers pursue multiple change strategies including consumer education regarding how to get dogs from shelters or legitimate breeders; policy pressure on the regulatory side including the occasional high profile raids on illegal puppy mills; and the new local ordinance movement aimed at curtailing puppy mill sales, municipality by municipality. An advocacy guide published by the national Humane Society reviews all of these strategies.

During the past decade there has been an increase in local ordinances that prohibit pet retailers from selling animals from puppy mills, requiring them to use shelter animal adoptions. In the past, pet stores have almost always sold dogs from puppy mills. Philadelphia passed just such an ordinance this past year. The fight to pass this ordinance was led by Councilman Kenyatta Johnson and received unanimous support from Council. A step in the right direction, although as several activists told me recently, there is little that can be done to stop backyard breeders and sellers, particularly given the limited public dollars that exist to monitor such activities.

Nationally there are nearly 200 municipalities that have adopted ordinances. The effect is pronounced enough that commercial breeder and retail sales pressure at the state legislative level are fighting back. They are passing preemption laws in states like Arizona or proposing them in several other states, including Ohio.

There is not enough data yet to know what the effect will be from these local ordinances and the no-kill shelters. But it stands to reason that, if there are fewer puppy mill outlets and a more focused attention on shelters as effective adoption agencies, the number of dogs needlessly killed each year will go down. Add more resources for programs like the Humane Society’s Pets for Life—providing spay and neuter assistance in American cities, and you have the making of a solution.

But ultimately the solution lies in consumer awareness and information. We are at a tipping point, as someone told me recently, where adopting a shelter dog is no longer viewed as something odd; in fact, it’s becoming down right cool. That is the ultimate way to put bad breeders out of business. Don’t buy the product.

Until then, we have a breed to kill pet economy that diminishes us all.