Financial Rights Legal Centre
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Pawnbroking (fact sheet)

This fact sheet is for information only. It is recommended that you get legal advice about your situation.


Suzanne has 2 kids. She is finding it hard to make ends meet and rent is due in a week. Suzanne is hopeful that she will be able to get a job within a few months, but she is really desperate for some cash now.

Suzanne remembers that she has some jewelry that belonged to her grandma. Suzanne takes the jewelry down to the pawn broker. The pawnbroker takes the jewelry and lends her $500. The pawnbroker tells Suzanne that she has to pay the $500 back, plus interest, within three months, otherwise he will sell her jewelry.

Three months later, Suzanne has been trying to save, but she is getting nowhere. Suzanne goes to the pawnbroker and pays what she can, but it’s not enough to pay back the $500 plus interest and charges.

The pawnbroker says he will give her more time to pay. Over the next year, Suzanne keeps paying the pawnbroker what she can. Eventually the pawnbroker tells Suzanne he’s had enough and he is going to sell the jewelry unless she can pay him $1,800 by the end of the week. Suzanne is desperate to get her jewelry back.


You can take your goods to a pawnbroker and get a loan from the pawnbroker.  The goods become security for the repayment of the loan. If you do not repay the loan the pawnbroker can sell the pawned goods.


The pawnbroker must give you at least three months to pay your loan and get your goods back. This is called the redemption period. The three month time limit starts from the date the goods were pawned.  You will need to repay the loan, plus interest and charges, within three months, to get your goods back.


You can ask the pawnbroker to enter an extending agreement to give you more time.


Yes. There are lots of laws that apply to pawnbrokers. You should get legal advice to see if the pawnbrokers have broken any laws.  If the pawnbrokers have broken some laws, this may help you get your goods back, without having to pay more interest and fees.

There are four main things to look for:

  1. Did the pawnbroker comply with the pawnbrokers and Second Hand Dealers Act NSW and Regulations when they prepared the pawn contract? The law says that the pawn contract must be in writing and must include:
  • A description of the goods (including serial numbers, inscriptions, etc.)
  • The total amount lent on the goods
  • The rate of interest charged
  • The equivalent annual interest rate
  • A statement in itemised form of the types of fees and charges
  • The amounts of the fees and charges, so far as they are known or ascertainable
  • The manner of calculating the amounts of fees and charges, so far as they are not known or ascertainable
  • The name and residential address of the customer
  • The date of birth of the owner of the goods
  • The date of the pawn
  • The customer’s signature
  • The printed name and signature of the person who took the pawn on behalf of the pawnbroker
  • A Notice, in the form prescribed by the Regulations, setting out the rights and obligations of the customer
  • A statement of the method or methods by which the goods may be sold if the goods are not redeemed
  • The pawn ticket must not contain any statement that purports to exclude or modify or misrepresent any rights a person has under law.
  1. If the pawnbroker agreed to give you an extension on the pawn, did the pawnbroker comply with the pawnbrokers and Second Hand Dealers Act? The law says that an accurate and legible copy of any extending agreement must be given to the customer. To be valid, the extending agreement must:
  • be incorporated in, or attached to, the original pawn ticket
  • include an identifying reference to, or description of, the original pawn ticket
  • specify the new redemption period
  • specify any new or varied rates, fees or charges that are or may be payable as a result of the extension
  • specify the date of the extending agreement
  • be signed by the customer
  1. Did the pawnbroker charge you illegal interest? The law says that pawnbrokers are not allowed to charge you interest after the end of the redemption period. You should get legal advice on this, as this is sometimes complicated.
  2. Was the pawn contract unjust? Section 76 of the National Credit Code (being Schedule 1 of the National Consumer Credit Protection Act 2009 (Cth)  applies to pawn contracts.  It is sometimes possible to argue that the pawn was unjust, for example, if you could never have afforded it, like Suzanne in the example above.  There are lots of factors to consider when assessing whether a pawn is unjust. Here are a few of the factors the law takes into account:
  • Whether the contract was affordable for you
  • Whether you were in a weaker bargaining position than the pawn broker
  • Whether you were able to negotiate the terms of the pawn with the pawnbroker
  • Whether you were able to protect your own interests, given your age, physical or mental condition
  • Whether the contract was in a logical and understandable format
  • Whether you had independent legal or other expert advice
  • Whether you understood the contract
  • Whether the contract was properly explained
  • Whether there was any unfair pressure, or unfair tactics, by the pawnbroker, or any other person

No single factor above is determinative, and you should get legal advice if you think one of these factors applies to your situation.


You should urgently call the National Debt Hotline on 1800 007 007 for free and independent legal advice about your Pawn. It is really useful if you keep all your paperwork about the pawn, just in case there are problems. You should keep any Notices the Pawnbroker gives you, any pawn agreements, any extending agreements, and any account statements.


If you are in NSW you can speak first to a free and independent lawyer on 1800 007 007. The lawyer will give you free advice about your case and information about how to make complaints.

The Office of Fair Trading (Call 13 32 20 (8.30am – 5pm, Mon – Fri) or visit can look into breaches of the Pawnbrokers and Second Hand Dealers Act. Sometimes the Office of Fair Trading can help with a mediation.

The NSW Civil and Administrative Tribunal (Call 1300 006228 or visit can also look into disputes with pawnbrokers.  There is a time limit of three years, from the date of the pawn, after which time it will be too late to go to the NSW Civil and Administrative Tribunal. It is therefore a good idea to get legal advice sooner rather than later.


This is only a brief guide and it is recommended that you speak to a solicitor or a financial counsellor to discuss the best option for you in your circumstances. See Fact Sheet: Getting Help for a list of additional resources.

Last Updated: October 2018.