Financial Rights’ is disappointed with the NSW Government’s proposed draft Pawnbroking Regulation as it is a missed opportunity to adequately protect consumers. The primary objectives of the proposed regulation relate to preventing the sale of stolen goods. While this is important there is almost no attention given to preventing other unscrupulous business practices towards consumers that have pawned, and hope to reclaim their own goods.
Only two consumer protection issues that would relate to our consumer clientele were raised and neither one has been accompanied by adequate changes to the Regulation.The most significant element missing from the current regulations is access to an external dispute resolution (EDR) mechanism. Pawnbrokers’ customers are most often the most vulnerable consumers, without resources, capacity or will to commence action in a court or tribunal. Without access to an EDR scheme, low income and/or disadvantaged consumers are for all practical purposes deprived of the opportunity to pursue a valid complaint. The lack of compulsory membership of an EDR scheme is a significant omission in the pawnbroking licensing requirements and should be rectified as a matter of urgency.
Further Financial Rights is concerned that consumers do not understand the true cost of the credit they are obtaining. Pawn agreements brought to Financial Rights by clients most often do not clearly explain the fees and charges payable. Most contain brief, fine print, poorly set out, jumbled together and difficult to understand. There is no clear tabular form to explain the true cost of the credit. Adding some disclosures in tabular form within each actual pawn agreement and extending agreement would make things a whole lot clearer for consumers.
