Using a pawnbroker - if things go wrong
On this page you'll find advice on what to do
if you lose your pawn-receipt or if you cannot pay what you owe.
If things do go wrong, it is a good idea to get advice. Contact your
local trading
standards service or, in Northern Ireland, the Department
of Enterprise, Trade and Investment . Or go to a Citizens
Advice Bureau or Citizens
Advice Scotland.
If you lose your pawn-receipt
If you lose your pawn-receipt, tell the pawnbroker so no-one else can use
it.
You can get your item back by paying what you owe and signing a statement
that you have lost your pawn-receipt and that you are the owner. If you
borrowed more than £75, you will have to get the statement witnessed
by a Commissioner for Oaths, Justice of the Peace or Notary Public. You
can also use a local solicitor, but you may have to pay a fee.
If you cannot pay what you owe
If you cannot pay what you owe by the deadline, and you borrowed £75
or less, the pawnbroker will keep your pawn.
If you borrowed more than £75, the pawnbroker can sell the pawn
to recover the debt you owe. (The pawn is yours until it is sold and you
can still redeem it by paying what you owe including the interest that
has built up.)
For more, go to If the pawn is sold.
Renewing your loan
If you cannot pay what you owe, and you do not want the item to be sold,
the pawnbroker may agree to renew your loan. You will usually be asked
to pay the interest that has built up on the loan when you renew. The pawnbroker
must give you another agreement (a 'modifying agreement') when you renew
a loan.
If the pawn is sold
If you cannot pay what you owe, and you borrowed more than £75, the
pawnbroker can sell the pawn to recover the debt.
If you borrowed more than £100, the pawnbroker must write to you
14 days before the sale to tell you the asking price for the item and when
and where it will be sold.
In all cases the pawnbroker must tell you, within 20 working days, the
price for which the item was sold, the sale costs and how much is due from
him to you, or from you to him.
If the item is sold for more than you owe, the surplus belongs to you
once the sale costs have been taken off. You will not automatically receive
the difference – you have to ask the pawnbroker for it. But you will be
able to claim interest on the surplus if you don't get it back promptly.
If, on the other hand, the pawn is sold for less than you owe, you will
have to pay the difference.
If you are unhappy with the price
If you think the price the pawn fetched was too low or the sale costs too
high, speak to the pawnbroker.
If you are still not satisfied, you can take the pawnbroker to a small
claims court. It is informal and easy to use: you do not have to go to
a solicitor. Even if you lose, only very limited costs can be awarded against
you. You can get advice about this from your local Citizens
Advice Bureau or Citizens
Advice Scotland.
The pawnbroker will have to prove the price was fair and the sale costs
reasonable but it is a good idea for you to obtain evidence showing why
this was not the case.
But remember that the secondhand value of goods, even jewellery, is
generally much less than the price of new items and less than what they
may be insured for. And if the pawn was sold in a public auction, the courts
are likely to consider the price it fetched fair, however low this may
be.
What the courts can decide
-
If the pawnbroker keeps your pawn without good reason and he is convicted
in a criminal court, the courts may grant you compensation (in England,
Wales and Northern Ireland) or order it to be returned (in Scotland).
-
Where you take the pawnbroker to court, if the court is not satisfied that
he sold the item for a fair price, the court can also decide what they
think is a suitable price for an item.
-
If you take the pawnbroker to court, the court can instruct a pawnbroker
to pay any interest on the surplus from a sale – if the pawnbroker has
not handed the surplus over promptly.
Other pages in this section
Source: The Office of Fair Trading, www.oft.gov.uk, 2003
Click Here to go back to
UK Loans Home Page Click
here to Go back and Read More Articles on Finance
Click
Here to Go back to our Information Page
|