Additional Requirements for Pawnbrokers

Restrictions on pawnbrokers' conduct

Licensed pawnbrokers may only:

• enter into a pawnbroking contract on the business premises identified in the pawnbroker's licence;
• advance money, and no other thing, on a pledge;
• charge interest and no other fee, however described.

A licensed pawnbroker:

• cannot accept a pledge from a person under the age of 18; and
• must not enter into buyback contracts.

A pawnbroker is prohibited from purchasing goods that are or have been subject to his or her pawnbroking contract unless:

• the pledger, after entering into the pawnbroking contract, wishes to sell the goods;
• the purchase price paid by the pawnbroker is more than the redemption price of the goods;
• the difference between the redemption price and the purchase price is paid in cash to the pledger at the time of the sale; and
• the pawnbroker records the sale and purchase price in his or her "pawnbrokers records".

Record keeping requirements

All licensed pawnbrokers must keep "pawnbrokers records". There is no prescribed form for your "pawnbrokers record". You can keep it in any form you wish. However, the Act requires you to record certain information.

Your "pawnbrokers record" must record the following information in relation to all goods pledged to you in the course of your business as a pawnbroker:

• the identity of the person who pledged the article to you (see below for further information);
• a description of the pawn goods, including its serial number or any other unique identifiers;
• the unique number that you assign to the pledged goods;
• the name and signature of the person who conducted the transaction on your behalf;
• the redemption date;
• the amount of money advanced on the goods;
• the interest to be charged; and
• the total redemption price payable at the redemption date, and whether any lesser amount is payable if the goods are redeemed before that date.

In addition, your "pawnbrokers record" must show either:

• the date the goods are redeemed and the amount for which they are redeemed; or
• the date on which the goods are sold, the sale price you received for the goods, and the amount (if any) you returned to the pledger.

You must enter these details into your "pawnbrokers record" as soon as practicable.

Details required to establish identity of the pledger

Your "pawnbrokers record" must include the following details relating to an individual's identity:

• the person's full name;
• their contact address;
• their contact phone number, if any;
• their date of birth;
• the fact that the pledger is over 18 years of age;
• their signature; and
• the form of authorised identification that you used to verify the pledger's identity.

The Secondhand Dealers and Pawnbrokers Regulations 2005 may require you to collect additional information from the pledger regarding their identity. This page will be update once those regulations come into effect.

Verification of identity

You must verify the pledger's identity. You can only do this by:

• sighting the person's authorised identification; or
• if the person is personally known to you, by your personal knowledge.

If you choose to verify the pledger's identity by personal knowledge and incorrectly record any of details in your "pawnbrokers record" you will be deemed to have made a false entry.

Offence in relation to details to be recorded

It is an offence which carries, on conviction, a fine of up to $10,000 if you, without reasonable excuse, fail to:

• keep a "pawnbrokers record";
• record " any information required in relation to a pledge;
• add the required information to your "dealers record" as soon as the information is available.

It is also an offence, carrying the same penalty, to make a false entry on your "pawnbrokers record".

Storage of and access to "Pawnbrokers Record"

You must keep your "pawnbrokers record" at your principal place of business. You must keep your "pawnbrokers record" for 3 years from the date of the transaction to which the record relates.

It is an offence, carrying a penalty of up to $10,000 on conviction, to, without reasonable excuse, fail to keep:

• your "pawnbrokers record" for 3 years; or
• it at your principal place of business.

You must, when required to do so by a member of Police:

• show the member your "pawnbrokers record" and any information contained in it; or
• make a copy of all or part of your records and give that copy to the Police officer.

If you fail to do so, without a reasonable excuse, you could be convicted of an offence and fined up to $10,000.

 

Requirements when taking possession of pawned goods

Issuing of pledge ticket

When you take possession of any pawned goods, you must give the pledger a pledge ticket for the goods.

Retention of pawned goods until redemption date

You also must retain pawned goods until the redemption date has passed.

Labelling of pawned goods

You must also attach a label to any pawned goods that you take possession of. This label must bear the number that you assigned to it in your "pawnbrokers record". This label must remain attached to the goods until the goods have been redeemed or otherwise disposed of.

Rights of pledgers

A pledger has the right to redeem his or her pawned goods from you on payment of the redemption price. In addition, the pledger has the right, at any reasonable time, to inspect the pawned goods. The right of inspection allows the pledger to:

• view, but not handle the goods; or
• have you demonstrate the operation of the goods.

Pawnbrokers rights when pawned goods not redeemed

If a pledger has not redeemed his or her pawned goods on or before the redemption date, as a licensed pawnbroker you may sell the goods to recover the redemption price.

You must offer the unredeemed goods for sale by way of:

• public auction; or
• publicly accessible internet auction website.

If, at auction, the goods attract a bid that is equal to or exceeds the redemption price, the goods must be sold.

If the goods do not sell at auction, the pawnbroker may sell the goods in any other way that is likely to yield a realistic price.

Pawnbrokers obligations when unredeemed goods attract price in excess of redemption price

When any pawnbroker sells unredeemed goods that attract a sale price in excess of the redemption price, there is a strict process that must be followed in respect of dealing with the excess received.

The excess must be divided: 10% for pawnbroker; 90% for the pledger.

As a licensed pawnbroker you are entitled to retain your 10% share. You must hold the pledger's 90% for six months from the date of the sale. If the pledger does not claim his or her 90% within the six-month period you may retain that portion of the excess as well.

If the amount of the excess is greater than $10, you must write to the pledger as soon as practicable and advise him or her of:

• the amount of excess to which he or she is entitled; and
• the date by which his or her portion of the excess must be claimed (being six months from the date of sale).

Offences relating to pawnbroking

As a licensed pawnbroker you will be committing an offence that, on conviction carries a fine of up to $10,000, if you:

• enter into a buyback contract as a buyer while apparently acting in the course of business as a pawnbroker;
• enter into a pawnbroking contract at a place other than at the premises listed in your licence;
• sell or otherwise dispose of pawned goods on or before the redemption date;
• fail to issue a pledge ticket or issue a pledge ticket that does not contain all the required information;
• fail to allow a pledger to redeem or inspect the goods that he or she has pledged;
• sell pawned goods without first offering them for sale at public auction or publicly accessible internet auction;
• fail, when a pledger claims the excess between the sale price and the redemption price within the six-month period, to return the pledger at least 90% of the excess;
• accept a pledge from a pledger who is under 18 years of age;
• fail to comply with the statutory obligations which permit you to purchase the pledge goods from the pledger.