Class Growls at Banfield Pet Hospital Chain

LOS ANGELES (CN) - The Banfield Pet Hospital veterinary chain aggressively upsells unnecessary services, so the discounts it also offers "evaporate," a pet owner claims in a federal class action.

Lead plaintiff Gregory Pero sued Medical Management International dba Banfield Pet Hospital, on behalf of customers served through Banfield outlets in PetSmart stores nationwide.

PetSmart is not a named party in the complaint, though Pero notes that the company owns a minority interest in Banfield.

Candy conglomerate Mars - which makes M&Ms, Twix and Skittles candies as well as the Pedigree and Whiskas pet food brands - owns the majority stake, Pero says.

Pero says he "holds these truths to be self-evident: (a) Pet care providers should be honest about the true costs of their products and services, and (b) pet care providers should not upsell unnecessary pet care."

But the pet patriot declares that Banfield does not adhere to these self-evident truths when it comes to its "Optimum Wellness Plan," which has more than 1 million pet enrollees.

"Banfield aggressively markets, advertises and sells the plans that purport to offer deep savings and discounts for preventative pet care services and related pet care products," Pero says in the lawsuit.

"Banfield does not provide the promised savings and discounts under its plan, and Banfield upsells unnecessary pet care to its clients. This class action seeks to remedy: (a) Banfield's deceptive marketing of savings and discounts under the plan, and (b) Banfield's deceptive and coercive upselling of additional pet care products and services. Banfield's conduct violates consumer protection laws in California and nationwide."

Pero says the plan includes physical exams, vaccines and diagnostic tests for dogs and cats. More expensive plans include higher-level care, but all are tailored to puppies, kittens and adult dogs and cats.

Banfield's employees push the plans by promising discounts on other products and services, which are advertised in print and on the company website, but those savings are rarely realized, Pero claims.

"For at least the past four years, Banfield has misrepresented - and continues to misrepresent - the nature and amount of savings and discounts to be realized through the purchase and use of the wellness plan," Pero says. "In this regard, for each plan Banfield advertises a monthly payment plan that purportedly entitles clients to minimum savings off of regular costs for preventative pet care products and services plus fixed discounts on additional products and services sought by customers. Banfield, however, simply does not provide the promised savings and discounts."

He continues: "In particular, under the wellness plan Banfield promises substantial minimum savings on preventative pet care (e.g., more than $600 per year savings with the base-level dog plan, for percentage savings of more than 50 percent versus regular costs). Banfield also promises that the customer will receive an additional discount on other pet care products and services not covered under the plan (e.g., an additional 10 percent off with the base-level adult dog plan)." (Parentheses in complaint.)

Banfield charges a one-time membership fee of $49.95 in addition to monthly payments that, for an adult dog, come to nearly $32 for the cheapest plan. These costs supposedly entitle pet owners to savings with each visit or monthly, but hide what Pero calls "the warped service assumptions and inflated pricing scheme on which the purported savings and discounts are based."

He claims: "Banfield promises that plan customers always get the services they pay for, and Banfield advertises deep savings at every visit and during each month the client owns a plan. In reality, the savings begin to evaporate when the client does not need or cannot use one or more of the bundled products or services under the plan. Moreover, the advertised savings cannot be achieved each visit or each month as Banfield effectively represents. Rather, the client first would need to use an uncertain number and variety of Banfield pet care products and services over the course of an entire plan year. Meanwhile, Banfield overstates its regular fees and tacks on miscellaneous fees and markups, which misrepresents the ultimate savings and discounts earned by clients."

It all comes down to profits for Banfield, Pero says: that the company focuses on an average patient charge to boost its bottom line.

"In an effort to increase the average patient charge, Banfield uses deceptive and coercive tactics to sell additional pet care products and services to plan clients," Pero says in the complaint. "Among other things, Banfield systematically orders extra diagnostic tests and medications for plan clients in order to boost the average patient charge. These upselling efforts compel the client to spend money he or she would not have otherwise spent and wipe out the savings and discounts promised under the plans."

Pero claims the midlevel plan for his adult dog cost him $479.40 per year, but promised a "minimum annual savings" of $1,008.61. But he says Banfield does not provide customers with retail price lists or a breakdown of how it calculates the annual savings.

"In truth, many plan clients save nothing and others save far less than promised," Pero says in the class action. "The savings depend on Banfield providing bundled pet care products and services over the course of an entire plan year. However, Banfield does not actually provide all of the bundled products and services to plan clients and/or the clients do not need all the products and services, and as a result the purported savings evaporate. Importantly, if the client cancels during the plan year any savings may be wiped out, leaving the client with little more than a history of overpayments. The advertised minimum annual savings also ignore the costs of unnecessary pet care products and services upsold to clients, as well as bogus 'hospitalization' and 'professional service' fees that Banfield assesses on top of other charges for services supposedly rendered."

Pero says his pets have never been injured or harmed during their visits to Banfield's clinic. But he says that if he'd known about the true costs of his pets' care, he never would have signed up for wellness plans.

The company also routinely inflates medication costs and tacks fees onto lab tests, further overstating the plans' benefits, according to Pero.

"Furthermore, when a client wants to cancel during the plan year, Banfield may retroactively impose its full retail fees to date or assess a full year's worth of plan payments," the complaint states. "The harsh cancellation provisions - which apply even when a pet dies during the plan year - tend to wipe out the advertised savings. The cancellation provisions are doubly problematic insofar as Banfield overstates the retail fees incurred at the outset of the relationship, a fact which further locks clients into ongoing commitments."

Pero seeks class certification and damages unfair business practices, consumer law violations, fraud and intentional misrepresentation. He also wants Banfield barred from promoting its wellness plans, restitution, and declaratory judgment that customers may cancel their plans without penalty.

He is represented by Lee Gordon with Hagens Berman Sobol Shapiro, in Pasadena.

Categories / Uncategorized

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Class Growls at Banfield Pet Hospital Chain

Subscribe to Closing Arguments

Additional Reads