Pawnbroking and secondhand dealers

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: 

Pawn agreement

You will enter into a contract known as a pawn agreement when you pawn an item. Before you can enter into a pawn agreement, you need to show the pawnbroker identification documents and provide certain information, including:

• 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 the Ownership Statement by Customer. The information you provide must be legible.

Pawn ticket

Once you complete the Ownership Statement by Customer form 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:

1. Details of the pawn agreement:

• 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.

2. A notice about 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 the 20th of the month.

3. A notice about the redemption (return upon repayment) of pawned goods:

• 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.

The following notices must accompany or be included in a pawn ticket:

1. An itemised statement of the fees and charges:
   • 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).
2. A notice about your rights and obligations. This notice is called What are my rights and obligations when I pawn an item.

Redeeming goods

Return to the pawnbroker with your pawn ticket.

If you do not 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 ask a representative to collect the goods on your behalf, but you must give them authority in writing. If the owner of the goods cannot collect an item or give written authority, a representative can produce other evidence.

Redemption period

Generally, you must redeem your goods within 3 months from the date they were pawned. However, you may be able to negotiate a longer period with the pawnbroker. Make sure you get any extension 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 have not 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.

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.

Unredeemed goods

If you were 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 $100 more than the amount owed, the pawnbroker must post you a letter to the address you gave on the pawn ticket within 21 days of the sale advising that you have 12 months to claim the excess money made from the sale, or you will forfeit the amount.

Stolen goods

Buyers of stolen goods do not get title

Title and ownership of the goods remains with the owner of the goods stolen or sold without their permission. The buyer of stolen goods does not get title or ownership of the goods.

Report stolen goods to the police

Inform the pawnbroker and the police if you believe a pawnbroker or second-hand dealer has goods that were stolen from you.

The pawnbroker is required to advise you to go to a police station. They should also have a sign on display with this information.

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
• 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, the police will notify the pawnbroker, and they will hold onto the goods. If no decision is made about ownership during the proceedings, the 28-day period will begin after the proceedings end.

Your consumer rights

Under Australian Consumer Law, most or services bought in Australia after 1 January 2011 come with automatic consumer guarantees.

Proof of purchase and documentation

If the service has a warranty, it will give you some extra protection against faults or defects. Warranties generally have terms and conditions attached and it’s your responsibility to be aware of these.

Advertising

Advertising can be a powerful means of persuasion, so it’s important it is truthful, accurate and easy to understand. Australian Consumer Law protects consumers from deceptive advertising claims and conduct.  
 
Businesses are not allowed to make false or misleading representations about their products or services.

The remedy if something goes 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
• cancellation
• replacement
• further service to rectify the problem
• reimbursement for damages and consequential loss in some cases.

The remedy will depend on whether the problem is: 

• a major problem, or
• a minor problem.

You can find out more by visiting our repairs, replacements and refunds page.