Pawnbroking, second-hand dealers and the Personal Property Securities Register (PPSR)
To find out about the PPSR and how it affects your business visit the PPSR website.
The Pawnbrokers and Second-Hand Dealers Act 1996 (the Act) aims to reduce the trade in stolen goods by providing a licensing regime with record keeping and proof of identity requirements.
It also aims to constrain the exercise of market power in respect of the provision of pawnbroking services and to provide a mechanism to facilitate the return of stolen property to rightful owners quickly and equitably.
Persons who carry on the businesses of pawnbroking or buying or selling second-hand goods which are prescribed in the Regulation are required to be licensed. The second-hand goods that are prescribed in the Regulation are those which are considered to be at high risk of theft. There are some exceptions to holding a licence; refer to the section on exceptions below.
Licensees must know what their obligations are under the legislation in regard to record keeping (refer to the legislation links at the bottom of the page). The legislation requires pawnbrokers and second-hand dealers to maintain records in relation to such things, the person selling or pawning the goods, a description of the goods, the date the transaction takes place and the price paid for the goods. Before taking goods for sale or pawn, licensees must obtain prescribed documentary evidence of the person’s identity and a prescribed declaration regarding ownership of the goods.
Pawnbrokers and second-hand dealers (who are not exempt) are required to, as a condition of their licence, keep computer records. For more information go to the Computerised records page.
From 1 June 2016 pawnbrokers must include the MAC address for certain types of Wi-Fi-connecting devices, such as, a mobile phone, a tablet computer or laptop in the description of goods on a pawnbroker’s record of pledges.
A MAC address is a unique identifying number which may be used to identify a device. Pawnbroker records of MAC addresses may assist police with identifying and locating possible stolen electronic goods. To assist licensees, a step-by-step guide on how to access MAC addresses from different types of devices and operating systems has been developed by NSW Police. View or download MAC Address Guide in PDF format (size: 882kb).
A device may have more than one MAC address if it has multiple network interfaces, for example, a computer with an Ethernet connection and a Wi-Fi connection.
In general, licensees must hold any second hand goods which were purchased or received in the course of the licensed business, unaltered, for 14 days after receipt.
A minimum 3 month redemption period applies to pawned goods, however a pawner may redeem their goods at any time. The Act specifies that a record of the pawn must be made and must contain certain information, including a fair and reasonable description of the goods and the total amount lent on the goods, together with the rate of interest charged by week, month or other period and any other charges. A pawner must receive a copy of the pawn agreement (also known as a pawn ticket) and other prescribed material. Licensees must be aware of their obligation under the legislation.
The Director General may take disciplinary action against licensees and Police and NSW Fair Trading Officers may impose penalties for non compliance with the legislation.
A person does not need a licence under the Act to:
If a person in the course of, or as a matter ancillary to the carrying on of a business that does not require a licence under the Act:
that person does not require a second-hand dealers licence under the Act.
Trade-in in relation to goods, means the taking of the goods as part payment for any new or used goods.
Prescribed second-hand goods are those that are at high risk of theft. A licence is required when a trader deals in any of the following prescribed second-hand goods:
Interactive game console means equipment for the playing of a game:
The following goods are exempt and are not prescribed second-hand goods for the purposes of the Act and a licence is not required when buying or selling them:
All licensees under the Act must conspicuously display the following signs at their place of business.
Please note: If it is appropriate for your business, these signs may be reproduced in another language and displayed in addition to the English language signs.
A sign which is written in the English language, in capital letters and which states:
A statement with the words in English:
"Disputes about ownership and restoration of goods: You have a legal right to claim goods from these premises that you have good reason to believe are yours. Go to any Police Station and a police officer will advise you of your rights and what you will need to do."
A statement with the words in English:
"Any information provided to the licensee by or about a customer in relation to the trading of second-hand goods may be furnished to the police."
Pawnbrokers must display a sign which is written in the English language, in at least 2.5cm high black Arial lettering on a white background which specifies the rate or rates of interest charged and any other fees and charges, including those that may be deducted from the proceeds of the sale of unredeemed goods.
From 1 March 2016 pawnbrokers and second-hand dealers must use the new Form 1, a written statement, to establish who owns the goods that are being offered for sale or being pawned. The new Form 1 is no longer required to be in any particular font but requires the information to be legible.
The new Form 1 also requires licensee details, additional details about the identity of the supplier of goods and a detailed description of the goods to reflect standard industry practice and ensure necessary details are readily available.
Form 1 can be downloaded from the Business licensing forms page or obtained from NSW Service Centre.
The following notices must accompany a pawn ticket.
A copy of the pawn ticket, including all the required information, must be given to a pawner at the time that the record is made.
You and the pawner can agree to extend the redemption period even if the original redemption period has expired. This can also be done by anyone else who is entitled to redeem the goods. If the pawner is unable to extend the agreement, they can provide an authority to someone who can do it on their behalf.
You must make a record of the extending agreement and provide the pawner with a copy. The agreement must:
The law provides that authorised officers may serve a notice on a licensee directing them to hold goods reasonably suspected of being stolen or unlawfully obtained for a period of 56 days. A further 56 day notice may be served on the licensee if required. This assists the police in conducting a comprehensive criminal investigation and to ascertain the owner of goods suspected of being stolen or unlawfully obtained that are in the possession of a licensee.
Section 26(1) of the Sale of Goods Act 1923 provides that where goods are sold by a person who is not the owner and they sell them without the authority or consent of the owner, the buyer of the goods does not acquire title to those goods.
When a person complains to a licensee that goods in the possession of the licensee are their property, the licensee is to advise them to go to a Police station. A sign specifying this is to be erected in each of the licensees’ business premises (see What signs do I need to display? section above). If the theft or unlawful dealing of the goods has been reported to the Police on an earlier occasion, then the person (known as a claimant) must then provide Police with documentary evidence of ownership or a statutory declaration and make a written claim to the Police that they are the owner of the goods and that the goods have been stolen or otherwise unlawfully dealt with. If the Police Officer has no reason to suspect that the documents or statements are false or misleading in a material particular, then he/she may serve on the licensee what is known as a Restoration Notice.
Upon being served with a restoration notice a licensee has 28 days to either return the goods to the claimant or lodge a hearing to have the matter resolved with the NSW Civil and Administrative Tribunal.
The licensee must retain the goods, unaltered until the matter is resolved. If criminal proceedings in relation to the theft of the goods are commenced, the police will notify licensees of that commencement and the goods must be retained unaltered until those proceedings are completed. If no decision is made about ownership of the goods during those proceedings, the 28 day period will carry on at the conclusion of those proceedings.