Pawnbrokers and second-hand dealers
What is a pawnbroker?
A pawnbroker lends money on the condition that the borrower leaves goods that will be returned when the loan, interest and any other fees and charges are repaid. By law, pawnbrokers must hold a pawnbrokers licence issued by NSW Fair Trading.
What is a second-hand dealer?
A second-hand dealer is a person who buys or sells used goods or unused goods that have been purchased by a third party for the owner (for example, an unwanted gift). Second-hand dealers who deal in prescribed second-hand goods must also be licensed with NSW Fair Trading.
What should I be aware of before dealing with a pawnbroker?
Pawnbrokers must comply with laws that protect consumers. You should only deal with pawnbrokers licensed by NSW Fair Trading. If you pawn any of your goods you will need to enter into a pawn agreement.
By law all licensed pawnbrokers must display certain signs in their premises which are visible to customers and which include:
the name of the licensed pawnbroker, licence number and category
what all the fees and charges are including interest rates
a statement advising that information provided to them will be given to the police.
They must also have a sign on display with the following information:
“You have the legal right to claim goods from these premises that you have a 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.”
What information must I give to a pawnbroker?
You must provide the pawnbroker with authentic evidence as to who owns the goods that you are offering for sale or pawn. The pawnbroker must give you a statement to fill out with this information known as Form 1, Statement by customer as to who is the owner of goods sold or pawned. Form 1 can be downloaded from the Forms page or obtained from a Fair Trading Centre and can either be a separate document or incorporated into another document.
If you are a representative selling or pawning goods on behalf of the owner you will need authentic evidence from the owner that you can legally act on their behalf.
What information must a pawnbroker give me? The pawn agreement
When you pawn goods you make a pawn agreement with the pawnbroker. When you do this a pawnbroker must give you (the pawner) a copy of the pawn ticket (the receipt of your pawn agreement) and four notices that include the information set out below when the record is made.
A pawn ticket must include the following information:
a description of the goods
any serial numbers or other identifying numbers and any hallmark, inscription or engraving of every component
the total amount lent on the goods
the rate of interest charged and the period of the loan
any other charges
an equivalent annual interest rate
the name, residential address and date of birth of the owner of the goods and any agent through whom they were pawned
the date that the pledge and the agreement was signed.
The following notices must accompany a pawn ticket.
a notice about fees and charges specifying:
fees and charges that are (or may become) payable, including those that are (or may become) deductible from the proceeds of the sale of the goods
the amount of the fees and charges (so far as they are known)
how the fees and charges will be calculated (if the amounts are not known)
a notice regarding interest charges that states:
that the pawner has the option of paying interest monthly if the interest period is going to be greater than a month
the agreed frequency of interest charges and when they are payable (for example, on a Friday or on the 20th of the month)
a notice about the redemption (return upon repayment) of pawned goods specifying the following:
the method(s) by which goods will be sold if they are not redeemed
whether goods can be redeemed separately if the pawn ticket covers more than one item
the address of the premises where the goods will be held during the redemption period
the date the redemption period ends
a notice of a pawners rights and obligations. This notice is called Form 2, the Rights and Obligations of a Pawnbroker and can be downloaded from the Forms page or obtained from a Fair Trading Centre.
Redemption of goods
What is the time limit for redeeming pawned goods?
By law you may redeem your goods at any time within three months from the date they were pawned. However, the pawnbroker must give you a minimum of three months to redeem your goods. You may be able to negotiate a longer period if the pawnbroker agrees to this. You will need to enter an extension of your agreement in writing.
Once the redemption period is finished, you may still redeem your goods at any time until they are either sold or consigned for auction.
If there has been no agreement to extend the redemption period and you wish to redeem your goods because they haven’t been sold or consigned for auction, then the pawnbroker cannot charge you interest for the time after the end of the redemption period. The pawnbroker can charge a safekeeping fee as long as it is not greater after the end of the redemption period than it was during. (This must be on the signage about fees and charges and in your original agreement).
Can I extend my redemption period?
You and the pawnbroker 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 you are unable to extend the agreement yourself, you can provide an authority to someone who can do it on your behalf.
The pawnbroker must make a record of the extending agreement and provide you with a copy. The agreement must:
include an identifying reference to the original agreement which must be attached or incorporated in it
include the new redemption period
include the date the extending agreement was entered into
specify any new or varied rates, fees or charges
be signed by the pawner or the person extending the agreement for the pawner.
How do I redeem my goods?
If you still have your pawn ticket, you should return to the pawnbroker and ask to see the licensee of the business.
If you don’t have your pawn ticket, you can still redeem your goods by producing acceptable evidence of your identity and completing a declaration that you are the owner of the goods.
A representative for the owner can produce an authority from the owner to redeem the goods. They can also produce some other evidence, such as a death certificate, which would indicate that the owner is unable to sign an authority and is unable to redeem the goods themselves.
If the pawnbroker does not return the goods you are entitled to go to the local Police and complain as the pawnbroker is in breach of the Pawnbrokers and Second-hand Dealers Act. This will usually involve court action.
Alternatively, you may make a claim with the Consumer, Trader and Tenancy Tribunal against the pawnbroker for breach of contract. You will need some proof of the value of the goods.
What happens to unredeemed goods?
If you are lent more than $100 for the goods you pawn and you don’t redeem them in the three month period (or an agreed longer period), the pawnbroker must sell the goods in a way that will reasonably attract the best price possible. This could be either off the shelf in their premises, at auction in their premises, or by auction elsewhere.
If any article you pawned is sold for more than the full amount of your loan and the interest that was due, the surplus amount less any reasonable costs associated with the sale must be paid on demand to you (or a representative claiming on your behalf), if claimed within 12 months after the sale.
If the surplus is more than $50 then the pawnbroker must send you a notice by registered mail within 21 days of the sale, notifying you that you have a surplus to collect and 12 months in which to do it.
Who has title to stolen goods?
By law, title and ownership of the goods remains with the owner from whom the goods were stolen from or sold without permission. The buyer of stolen goods does not get title nor ownership of the good.
How do I recover my stolen goods?
When you inform a pawnbroker that they have goods that are your property, the pawnbroker must advise you to go to a Police station. The pawnbroker must also have a sign on display in each of their business premises with this information.
If you have reported the theft or unlawful dealings of your goods to the Police on an earlier occasion, then you (the claimant) must then provide Police with documentary evidence of ownership or a statutory declaration and make a written claim to the Police that you 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 they may serve the pawnbroker with a Restoration Notice.
Upon being served with a restoration notice a pawnbroker has 28 days to either return the goods to the claimant or lodge an application to have the matter resolved by the Consumer, Trader and Tenancy Tribunal.
The pawnbroker 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 the pawnbroker 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.