Probe finds evidence of deception, which company CEO denies as he talks about changes
Behind Mall 205, past Old Chicago Pizza & Taproom, you can find Scott Campbell’s lucrative idea called Hannah the Pet Society.
Seven years ago, Campbell founded the pet care company on an innovative model, designed to bypass costly insurance regulations: you hand over ownership of your pet, then pay off. a monthly fee to cover veterinary care and food.
Now, with two locations boasting comfortable waiting areas and an array of exam rooms, the business is poised to go national, said CEO Fred Wich, a former executive at a kiosk company. machines hired in 2015 to prepare the company for outside investors.
The for-profit company has over 6,000 paying members. But there’s also a big problem: An Oregon Department of Justice investigation into substantial evidence the company misled customers, provided substandard veterinary care, and set up a purpose-driven organization. fraudulent nonprofit to cover up a long-standing practice of buying dogs from commercial breeders, not shelters. as the company has long claimed.
Wich notes that the state is reviewing unfair business practices, not criminal law.
“It’s not like they’re investigating whether we’ve committed a crime,” he said. “It’s more like you’ve been misleading in your ad.”
He said he disagreed that the company had done something wrong and noted that he made an effort to deal with complaints. “I think we’ve done everything right since I got involved.”
Yet in March 2016, the company sued the state to block investigators’ requests for documents. Multnomah County Circuit Judge Leslie Bottomly last month dismissed the company’s arguments and ordered the documents to be produced by April 14.
Last week, Wich organized a tour of Hannah’s 205 mall location. At one point, in a room where dogs were awaiting veterinary care, he leaned down to touch the nose of a friendly white pug who was waiting in a cage. “You’re a cutie,” he said.
Based in Vancouver, Wash., The company’s marketing says it was named after Campbell’s mother, known as Hannah. She “was a dedicated nurse who looked after every stray, injured or sick, wild or domestic animal that crossed her path,” according to the company’s entry on Yelp.
Adapting the HMO model to pets
The company’s innovative approach, Wich says, was designed to make pet ownership affordable. The company does this by taking possession of pets in a model similar to a medical HMO, where the company decides what medical care the animal will receive and provides it.
Hannah the Pet Society received some unwanted publicity in early 2016, when news broke that the society had euthanized three dogs. Critics said the dogs were not aggressive, as the company claims.
In February 2016, the state Department of Justice’s consumer protection unit requested documents from the company, citing complaints accusing the company of poor care and breaking promises made during the customer registration.
Wich described some complaints as unfounded and noted that many complaints were considered closed before the ministry decided to open a larger case. “Some of the complaints… are based on legitimate disagreements, and sometimes we’ve screwed up… but a lot of times they’re just trying to get out of a contractually binding payment.”
Among the complaints cited, several alleged inadequate care because the company did not have enough veterinarians. A complainant reported that her cat’s urinary tract infection – a life-threatening condition – was diagnosed as a behavior problem.
The association makes investigators think
The most important evidence disclosed by the Justice Department concerned the company’s role in creating a non-profit organization that allowed it to make marketing claims that state investigators believe to be false.
Until last year, its business model was based on matching so-called “pet parents” with seemingly rescued pets. At least until late 2015, Hannah’s website highlighted her connection to local shelters. However, it no longer supplies dogs and cats.
Photos showing people with cute pets were tagged on the website, “Shelter Dogs and Cats Meet Their New Eternal Families.”
But the DOJ’s investigation found that the company’s image was based on false pretenses, and that the attractive purebreds on offer were not pets at all, according to court documents.
Specifically, they found out that a nonprofit called the Pet Animal Welfare Society, or PAWS, had been started by Hannah and used to purchase pets from commercial breeders. The association has no connection with the Paws Animal Shelter in West Linn. It was run by an executive from Hannah using the administrative and accounting services provided by Hannah, and had no assets, charities, staff or public presence, according to the state investigation.
“Hannah was the sole source of PAWS funds, which PAWS used to purchase pets primarily from commercial breeders,” the state said. “PAWS then provided the pets to Hannah, and Hannah rented the pets to her clients, generally representing that these animals were from shelters or other animal welfare organizations.”
Indeed, the Hannah website claimed to have donated to local shelters and social organizations. But the funds were more direct payments to PAWS in exchange for pets, according to the state.
According to an affidavit filed by Justice Department financial investigator Lieselotte Zorn, PAWS sold approximately 1,000 pets to Hannah in 2013 alone.
Zorn wrote that her research “confirmed” that “Hannah organized PAWS under false pretenses” and “Hannah’s claim that she donated more than $ 1.2 million to life-saving organizations. ‘animals was bogus because those payments were fees paid to purchase pets, not charitable donations. ”
The company has sought to accuse the association of being the work of a former “rogue” employee. But the DOJ reports that its foundation dates back to the company’s top executives.
Wich, for her part, says the investigation is far from a conclusion, adding that the documents do not reflect Hannah’s side of the story. “We vehemently disagree with the assertions.”
He says Hannah’s members remain loyal despite the bad publicity.
“Because of this bad publicity, hardly anyone left our program because they know it,” he said. “They experience our service. They know that we provide great health care. They know that we have great doctors and great facilities, and they know that we really love pets and that we’re really trying to do the right thing. ”