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Sydney Loans · Small loans in NSW

Pawnbroking in NSW

Pawning an item means a licensed pawnbroker lends you money against it and holds it until you repay. In NSW you must be offered a loan period of at least 3 months, and the pawn ticket you are given must list every charge you will pay. You can collect the item at any time before the pawnbroker sells it, even after the loan period has run out, by paying what is owed.

Before anything changes hands

A pawn is a contract, called a pawn agreement. Before you can enter one, the pawnbroker needs to see identification and proof that the goods are yours, along with a detailed description of them, written on a form the pawnbroker gives you called the Ownership Statement by Customer. Someone pawning on the owner’s behalf needs genuine evidence that they are allowed to act for the owner.

Every licensed pawnbroker must have signs up in the shop that customers can see: the licence holder’s name, licence number and category, the fees and charges including interest rates, and a notice that the information customers give will be passed to the police.

Reading the pawn ticket

The pawn ticket is your copy of the agreement and your receipt, and you need it to collect the goods. NSW Fair Trading lists what it has to contain. Here it is laid out as a ticket, field by field.

What the ticket must show

  1. The goodsA description, with any serial or identifying numbers, hallmarks, inscriptions or engravings on each part
  2. The loanThe total lent, the interest rate, the loan period and any other charges
  3. The yearly rateAn equivalent annual interest rate
  4. The peopleThe owner’s name, home address and date of birth, and those of any agent who pawned the goods
  5. The dateWhen the agreement was signed
  6. InterestThat you may pay interest monthly when the loan runs longer than a month, and how often and when interest falls due
  7. Getting the goods backHow unredeemed goods will be sold, whether items can be collected separately, where they will be kept, and the date the redemption period ends
  8. AttachedAn itemised statement of fees and charges, and the approved notice of your rights and obligations

The fees you pay are the ones on your ticket and on the sign in the shop, and nothing else.

The loan period and paying interest

The loan has to be offered for at least 3 months from the day you pawn the goods, and the pawnbroker must let you pay interest month by month instead of all at the end. You, or someone paying for you, can make payments at any time during business hours.

The only change a pawnbroker can make to the agreement is to extend the loan period, and that needs your consent and a signed extension agreement. The extension is recorded in writing and you get a copy: it refers back to the original agreement and sets out the new redemption period, the date of the extension, and any new or changed rates, fees or charges.

When the period ends

Here is the sequence once the redemption period is over, in the order the rules apply it.

  1. You can still collectUntil the goods are sold or sent to auction, you can redeem them by paying what is owed.
  2. Interest stopsWithout an agreed extension, no interest can be charged for the time after the period ended. A safekeeping fee can apply if your agreement includes one, but it cannot be higher than it was during the period.
  3. The goods may be soldUnclaimed goods can be sold without telling you first. Where the loan was more than $100, the pawnbroker must sell for the best price it can get, as soon as it can, and cannot buy the goods itself.
  4. Any surplus is yoursWhere the loan was more than $100, and the sale brings in more than you owed, you can claim the surplus within 12 months of the sale. When the surplus is over $100, the pawnbroker must write to you within 21 days to tell you.

You can choose not to receive that surplus notice, but no one can make you opt out, and you can change your mind at any time. A pawnbroker is not entitled to keep more from a sale than the loan, its reasonable costs and the interest.

A lost ticket

You can ask for a replacement ticket once the pawnbroker has checked who you are. You can also redeem goods without the ticket by showing identification and signing a declaration that you own them. Another person can collect for you with your written authority.

When something goes wrong

If a pawnbroker will not hand back goods, NSW Fair Trading says you can complain to the local police, because that breaches the Pawnbrokers and Second-hand Dealers Act 1996, and this usually leads to court. You can also lodge a claim with the NSW Civil and Administrative Tribunal, with some proof of what the goods are worth.

Goods that were stolen stay the owner’s property, because a buyer of stolen goods does not get title to them. The owner reports the theft to police and gives evidence of ownership or a statutory declaration. Police can then serve the pawnbroker with a Restoration Notice, and the pawnbroker has 28 days either to return the goods or to apply to the Tribunal, holding on to them in the meantime.

If the business is sold, its customers are told within 14 days who will be in charge, and if a pawnbroker gives up its licence, customers are told where to redeem their goods. Complaints go to NSW Fair Trading online or by post, with details of the problem and copies of any letters or messages showing what you have tried.

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