A pawnbroker can loan you money in exchange for goods. Your pawned goods become security for the loan repayment. If you do not repay the loan, interest and any other fees and charges in the specified time, the pawnbroker can sell your goods. A second-hand dealer is a person who buys or sells goods previously owned by another party.
By law, both pawnbrokers and second-hand dealers must hold a licence issued by NSW Fair Trading.
This page explains:
- pawning goods
- redeeming goods
- your consumer rights
- stolen goods
- what do do if you have a problem
- how to be a savvy consumer
"Only deal with pawnbrokers licensed by us. Licensed pawnbrokers must display certain signage in-store – make sure you see it before pawning or buying any goods."
1. Pawn agreement
If you pawn any of your goods you will enter into a contract known as a pawn agreement. Before you can enter into a pawn agreement, you need to provide certain information to the pawnbroker. This includes:
- evidence that you own the goods you are offering for sale or pawn
- a detailed description of the goods.
You must submit this information in writing, using the form the pawnbroker gives you. This is known as Form 1 - Customer ownership statement of goods owned or pawned. The information you provide must be legible.
"If you are a representative selling or pawning goods on behalf of the owner, you’ll need authentic evidence from the owner that you can legally act on their behalf."
2. Pawn ticket
Once you complete a Form 1 and pawn your goods, the pawnbroker will issue you with a pawn ticket. This is a receipt of your pawn agreement. Hold onto it so you can claim your goods back after repaying the loan.
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 the agreement was signed.
3. Compulsory notices
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 about the pawner’s rights and obligations. This notice is called Form 2: Notice of the rights and obligations of a pawner.
Return to the pawnbroker with your pawn ticket and ask to see the licensee of the business.
If you don’t have your pawn ticket, you can still redeem your goods by showing evidence of your identity and completing a declaration that you are the owner of the goods.
You can allocate a representative to collect the goods on your behalf, but you must give them authority in writing. They can also produce some other evidence, such as a death certificate, to show that the owner is unable to sign an authority and can’t redeem the goods themselves.
1. Redemption period
Generally, you must redeem your goods within three months from the date they were pawned. However, you may be able to negotiate a longer period with the pawnbroker. If you do, make sure you get any extensions in writing.
Once the redemption period is finished, you can 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 want to redeem your goods because they haven’t been sold or consigned for auction, 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’s not greater after the end of the redemption period than it was during.
Extending the 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 someone who is entitled to redeem the goods, or you can authorise a person on your behalf.
The pawnbroker must make a record of the 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.
2. If the pawnbroker does not return the goods
If the pawnbroker does not return the goods, you can go to the local Police and complain as the pawnbroker is in breach of the Pawnbrokers and Second-hand Dealers Act 1996. This will usually involve court action.
You can also make a claim with the NSW Civil and Administrative Tribunal. You’ll need some proof of the value of the goods.
3. Unredeemed goods
If you are lent more than $100 for the goods and fail to repay your loan in the redemption period, the pawnbroker can sell the goods. This could be either off-the-shelf in their premises, at auction in their premises, or at auction elsewhere.
Pawnbrokers are not entitled to make a profit in excess of the loan, reasonable costs (storage is common but may include others) and interest.
If the goods sell for $50 more than the amount owed, the pawnbroker must send you a letter by registered mail (to the address supplied on the pawn ticket) advising that you have 12 months to claim the excess money (made from the sale) or it is forfeit.
Your consumer rights
Australian Consumer Law guarantees your rights when you buy goods and services.
In fact, most products and services purchased after 1 January 2011 come with an automatic consumer guarantee that the product or service you purchased will work and do what you asked for. This includes goods and services from pawnbrokers and second-hand dealers.
When you engage a business to provide goods or services, you have the right to expect ‘acceptable quality’. Services must be:
- provided with due care or skill (taking all necessary steps to avoid loss and damage)
- fit for any specified purpose (express or implied)
- provided in a reasonable time (when no time is set).
What is ‘reasonable’ will depend on the nature of the service, the difficulty of the task and other relevant factors.
Proof of purchase and documentation
You have the right to receive proof of purchase (like an invoice, cash register receipt, handwritten receipt or lay-by agreement). Suppliers must provide proof of purchase for goods and services worth $75 or more (excluding GST).
Legal and conveyancing services in Australia are usually supplied under a contract. A written copy of the contract (including its terms and conditions) must be supplied to you. Keep this for your records and in case you need to refer to the contract terms during a dispute.
Australian Consumer Law allows consumers to claim compensation (reimbursement) when a service does not meet a guarantee. You may be able to claim compensation for your costs (time and money) if something goes wrong with the service. For more information, refer to our contracts page.
Remedy when things go wrong
You are entitled to an appropriate remedy from the business when the product or service you purchased does not meet one or more of the consumer guarantees.
This might be a refund, a further service to rectify the problem and in some cases, reimbursement for damages and consequential loss.
Refer to the repairs, replacements and refunds page for more information.
Who has title to stolen goods?
Title and ownership of the goods remains with the owner that had the goods stolen or sold without their permission. The buyer of stolen goods does not get title nor ownership of the goods.
Report stolen goods to the Police
If you believe a pawnbroker or second-hand dealer has goods that were stolen from you, you should inform both the pawnbroker and the Police.
The pawnbroker is required to advise you to go to a Police station. They should also have a sign on display with this information (see Be a savvy consumer).
Provide evidence or a statutory declaration
Once you have reported the theft or unlawful dealings of your goods to the Police, you must provide them with evidence that you owned the goods or a make a statutory declaration that the goods are yours.
If the Police Officer has no reason to suspect that the documents or statements are false or misleading, they can serve the pawnbroker with a Restoration Notice.
Once they are served, the pawnbroker has 28 days to either return the goods to you or lodge an application to have the matter resolved by the NSW Civil and Administrative Tribunal.
The pawnbroker must hold onto the goods until the matter is resolved.
If criminal proceedings (in relation to the theft of the goods) begin, the Police will notify the pawnbroker and they will hold onto the goods. If no decision is made about ownership during those proceedings, the 28-day period will begin after the proceedings end.
Have a problem?
- Contact the business in the first instance and explain the problem. If the matter is complicated and not urgent, you could write an email or letter. We have tips and sample letters to help you.
- If you’re unable to resolve the matter with the business, you can contact us for help on 13 32 20 or make a complaint online.
Be a savvy consumer
Pawnbroker signage requirements
By law, all licensed pawnbrokers in NSW must display certain signs in their premises. These signs must be visible to customers and include:
- the name of the licensed pawnbroker, licence number and category
- service fees and charges (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.
Can’t find the information you’re looking for? Call us on 13 32 20 or submit an online enquiry.
Who enforces Australian Consumer Law?
The following agencies enforce provisions relating to consumer goods and services:
- Australian Competition and Consumer Commission (ACCC)
- NSW Fair Trading, and
- other State and Territory consumer protection agencies.
The Australian Securities and Investments Commission (ASIC) is responsible for financial products and services.