PAWNBROKING

The following rules do not apply to unregulated agreements, nor to non-commercial agreements or the pledge of a bearer-bond.

Pawnbroking definitions:

Pawnee = the person who provides the credit (and who receives the pledge)
Pawnor = the person who borrows the money (and who gives the pledge)
Pledge = the pawnee's rights over an article taken in pawn
Pawn = an article subject to a pledge

A Pawn-Receipt (in prescribed form) must be given for any article received in pawn (s.114). Generally, a pawn-receipt will be combined with the credit agreement.

Redemption period

A pawn can be redeemed at any time during the six months (or agreed longer period) following the date of the agreement. After that, it continues to be redeemable until the pawn is redeemed by the pawnee, or until title passes (see below).

Failure to redeem within the loan period

A pawn pledged for not more than £75 and for a period of 6 months belongs to the pawnee; otherwise it becomes realisable, ie. it can be sold. If the pawn is pledged for more than £100, 14 days notice must be given to the pawnor. The sale price, less the costs of the sale, can then be offset against the debt.

Many pawnbrokers now do all their standard loans at 7 months length to avoid the first option, since they would much rather sell goods than own them.

Loss of pawn-receipt

The pawn receipt can be replaced by either:

• a statutory declaration signed under oath before a notary public, or
• a signed statement (for amounts of no more than £75, where the pawnee agrees)

Offences

Offences exist for

• taking a pawn from a minor (s.114),
• failing to comply with the documentation rules (s.115), and
• unreasonable refusal of redemption (s.119).

Note that criminal penalties apply to pawnbrokers breaching the provisions; (for other agreements, the sanctions are mostly civil).