Pawnbrokers

Contributed by Elizabeth Samra of the Consumer Law Centre of the ACT and AGS Secondee Hannah Naughton and current to May 2018

In the ACT Pawnbrokers are regulated by the Pawnbrokers Act 1902 (ACT) (“Pawnbrokers Act”). A pawnbroker is defined under the Pawnbrokers Act as a person who carries on the business of lending money on the security of an article taken by the person by way of pawn, pledge or security.

A person must not carry on a business as a pawnbroker in the ACT unless the person is licensed as a pawnbroker under the Traders (Licensing) Act 2016 (ACT).

Records that must be kept by a pawnbroker

Under s 9 of the Pawnbrokers Act, if a licensed pawnbroker takes in pawn an article on which money is to be lent to a person, before giving money to a person, the pawnbroker must make a record for the article that contains the following information:

• An accurate description of the article;
• The amount to be lent;
• The rate of interest to be charged on the amount, by the week or month;
• The date the article was pawned;
• The name and home address given by the person;
• If the period for redemption of the article is longer than 3 months - the period.

The pawnbroker must not give the money to the person unless the pawnbroker reasonably believes that the name and address of the person is accurate (s 9(3) Pawnbrokers Act). The pawnbroker must also number the records for pawned articles consecutively, starting at 1 for the first pawned article (s 9(4) Pawnbrokers Act).

Pawn tickets

Section 10 of the Pawnbrokers Act provides that a licenced pawnbroker is required to provide a duplicate of the record required under s 9.

The redemption period

Section 13 of the Pawnbrokers Act provides that the period during which a pawned article may be redeemed is 3 months, or if a longer period is agreed to by the licenced pawnbroker, and the person pawning the article, the longer period.

An agreement for the forfeiture of a pawned article before the end of 3 months is void.

A pawned article that is not redeemed by the end of the redemption period is forfeited to the licensed pawnbroker, and may be sold or disposed on (s 13(2) Pawnbrokers Act).

A pawnbroker must not sell, or dispose of in another way, a pawned article before the end of the redemption period for the article (s 14 Pawnbrokers Act).

Court orders for the return of article

If a pawned article was pawned unlawfully, and the ACT Magistrates Court is satisfied about the ownership of the article, the Magistrates Court may order that the article be returned to the owner and that the person with whom the article was pawned pay compensation to the owner (s 26 Pawnbrokers Act).

Application of the credit law

As noted above, the credit law does not apply to pawnbroking and accordingly, there is no cap on the cost a pawnbroker can charge to redeem the goods. That said, ss 76-81 of the NCC apply to pawnbrokers, which relate to court reopening unjust contracts. If the pawnbroker is a member of an external dispute resolution scheme, one possible avenue of seeking redress may be to raise a complaint at external dispute resolution on grounds of unjustness (see Unjust Contracts).