Uncle's good for a loan

Pawnbroking is enjoying a revival in popularity, says Ian Hunter

Sainsbury's may be about to become one of the newest lenders, but spare a thought for Uncle who, despite his age and old-fashioned image, is still lending money. In fact, according to the National Pawnbrokers Association, the pawnbroking business is enjoying a steady revival.

The NPA says: "Pawnbroking has successfully shaken off its Dickensian image. The recent upsurge in the industry's fortunes came during the 1980s credit boom and has continued into the 1990s with customers preferring this convenient form of high-street borrowing - customers that banks and building societies turned their backs on during the squeeze."

Contrary to popular belief, pawnbroking is regulated like any other form of credit. The Office of Fair Trading is responsible for granting licences to pawnbrokers. Pawnbrokers' operations are governed by the Consumer Credit Act 1974. It is an offence for a pawnbroker to accept goods from a minor.

John Quigg is a pawnbroker with the north London-based Pledge Company. The company offers loans of varying duration at different rates of interest.

He explains: "We would normally offer a monthly loan of up to pounds 100 secured against a TV or video. Interest is charged at a rate of 10 per cent per week."

Six-monthly loans can be secured at more competitive rates on items such as musical instruments and jewellery. The company will also raise loans against property or share certificates. Recently, Mr Quigg explains, pounds 20,000 was lent to a customer in return for his BMW car as security. The customer was given the option to renew the loan for a further six months at the end of the term.

Borrowing from pawnbrokers can be expensive by conventional standards. Even credit card rates may look cheap by comparison. However, as pawnbrokers are quick to point out, credit can be provided immediately, without the need for any credit checks. When small sums are involved, it can even be more cost-effective to use a pawnbroker than to cash a cheque.

The pawnbroker requires proof of ownership before entering into a loan agreement. When an item is pawned, the customer should receive a receipt and a credit agreement. If you lose the receipt, you should inform the pawnbroker to prevent someone else redeeming the goods.

At the end of the loan period, the borrower will receive a notice explaining that the loan and outstanding interest are now payable. If the loan and the interest are paid, the goods are returned to the borrower. The customer may, however, have the option to renew the loan.

If the borrower does not respond to the notice served, the pawnbroker can take steps to dispose of the goods. The pawnbroker is obliged to give the customer notice of his intention to sell the goods, however, and at that stage the customer's only possible option if he wishes to prevent a sale is to apply to the county court for more time to pay the debt.

Contrary to myth, the pawnbroker cannot simply hold on to the goods, regardless of their value, if the customer does not repay the loan. The pawnbroker, when he decides to sell the goods, is under an obligation to obtain the best price possible. Any surplus, once the loan and accrued interest have been paid, should be returned to the customer.

Many pawnbrokers routinely send the goods to auction to avoid the accusation that they have failed to obtain the best possible price. Meanwhile the customer remains under an obligation to pay interest up until the time the goods are sold.

Mr Quigg says: "Sometimes the pawnbroker loses out in these situations, as the market value of the goods does not always equal the value of the loan and accrued interest. This is particularly true of computer equipment which can, because of constant innovations, lose its value rapidly."

Pawnbrokers are not liable if goods are destroyed or stolen, provided they have taken reasonable care of them.

Mr Quigg says: "All of our valuables are securely stored in vaults." The NPA states that it "safeguards customers' and members' interests with its Customer Protection Plan and Agreed Extra Value insurance schemes for pledged goods".

The NPA sees a bright future for its members. It says: "Pawnbrokers are now moving swiftly and very comfortably alongside high street lending institutions and are providing a service very similar to that offered by banks and building societies but one with which they cannot compete for speed and convenience."

The leaflet "Using a Pawnbroker - Just Another Way of Borrowing Money" is produced by the Office of Fair Trading.

The National Pawnbrokers' Association: 0171- 242-1114

Voices
The Sumatran tiger, endemic to the Indonesian island of Sumatra, is an endangered species
voicesJonathon Porritt: The wild tiger population is thought to have dropped by 97 per cent since 1900
Arts and Entertainment
Beast would strip to his underpants and take to the stage with a slogan scrawled on his bare chest whilst fans shouted “you fat bastard” at him
musicIndie music promoter was was a feature at Carter gigs
News
news
Arts and Entertainment
Story line: Susanoo slays the Yamata no Orochi serpent in the Japanese version of a myth dating back 40,000 years
arts + entsApplying the theory of evolution to the world's many mythologies
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
Performers dressed as Tunnocks chocolate teacakes, a renowned Scottish confectionary, perform during the opening ceremony of the 2014 Commonwealth Games at Celtic Park in Glasgow on July 23, 2014.
news
Life and Style
Popular plonk: Lambrusco is selling strong
Food + drinkNaff Seventies corner-shop staple is this year's Aperol Spritz
News
Gardai wait for the naked man, who had gone for a skinny dip in Belfast Lough
newsTwo skinny dippers threatened with inclusion on sex offenders’ register as naturists criminalised
News
Shake down: Michelle and Barack Obama bump knuckles before an election night rally in Minnesota in 2008, the 'Washington Post' called it 'the fist bump heard round the world'
newsThe pound, a.k.a. the dap, greatly improves hygiene
Arts and Entertainment
La Roux
music
Arts and Entertainment
Graham Fellows as John Shuttleworth
comedySean O'Grady joins Graham Fellows down his local Spar
News
people
News
Ross Burden pictured in 2002
people
News
Elisabeth Murdoch: The 44-year-old said she felt a responsibility to 'stand up and be counted’'
media... says Rupert Murdoch
Arts and Entertainment
tv
Extras
indybest
Sport
Arsenal signing Calum Chambers
sportGunners complete £16m transfer of Southampton youngster
Finacial products from our partners
Property search
Sell it with flowers: competition is 'intense' for homes with outside spaces

Gardens add a tenth to the value of your home

A London estate agent yesterday put a price on having a garden. David Pollock of Greene & Co reckons it can increase a property's value by a tenth.

Spectators at the Isle of Wight music festival watch the World Cup on the big screen. Betting promotions were a feature of the tournament
Lenders have been accused of persuading vulnerable people to borrow expensive credit

Payday loan firms accused of bombarding vulnerable people with nuisance phone calls

Payday loan firms have been accused of bombarding financially vulnerable people with nuisance phone calls, after a debt charity reported that a third of its clients were plagued by the messages.

The foundation proposed that the Government sets up a scheme to help people avoid losing their homes

Mortgages: 'Homeowners could trade down to shared ownership to defuse rate rise timebomb'

A plan to defuse a “mortgage debt timebomb” when interest rates rise is published today amid warnings that 2.3m households could struggle with their repayments.

Current accounts are too costly and confusing, says CMA as it announces investigation into Britain's biggest banks

Competition regulator to investigate market where it's hard for customers to make comparisons and the big banks' charges can be set too high
All the signs have been pointing up for buy-to-let, but there are clouds on the horizon

Buy-to-let: is it a boom or a bubble fit to burst?

People borrowing to be landlords could face the same restrictions as homebuyers, with MPs voicing fears that property speculation may be overheating the market

Moment of truth for payday lenders: Watchdog plans to curb cost of short-term loans

The chief of the City watchdog, Martin Wheatley, spoke exclusively to The Independent's Simon Read about its attempts to control the worst excesses of unscrupulous high-cost credit companies

Consumers given power to choose a green deal

How would you like to be able to choose how your electricity is made and even where it come from? It may sound futuristic and fanciful but the independent supplier Co-operative Energy has made it a reality this week.

'Scrap the trap': calls for change grow as banks are told to play fair with loyal savers

City regulator says existing customers suffer worst rates

Motor insurers divided on proposals for whiplash ban

MPs want medical evidence for claims. Will this bring higher premiums?

British Gas repays £1m for mis-sold deals

British Gas was yesterday forced to pay back £1m to its customers after mis-selling them energy deals.

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)

    £350 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...

    Java Developer - Banking - London - Up to £560/day

    £500 - £560 per day: Orgtel: Java Developer FX - Banking - London - Up to £560...

    HR Business Analyst, Bristol, £350-400pd

    £350 - £400 per day + competitive: Orgtel: My client, a leading bank, is curre...

    Account Manager - (Product & Account Management, Marketing)

    £26000 - £30000 per annum + Benefits: Ashdown Group: Account Manager - (Produc...

    Day In a Page

    The children were playing in the street with toy guns. The air strikes were tragically real

    The air strikes were tragically real

    The children were playing in the street with toy guns
    Boozy, ignorant, intolerant, but very polite – The British, as others see us

    Britain as others see us

    Boozy, ignorant, intolerant, but very polite
    Countries that don’t survey their tigers risk losing them altogether

    Countries that don’t survey their tigers risk losing them

    Jonathon Porritt sounds the alarm
    How did our legends really begin?

    How did our legends really begin?

    Applying the theory of evolution to the world's many mythologies
    Watch out: Lambrusco is back on the menu

    Lambrusco is back on the menu

    Naff Seventies corner-shop staple is this year's Aperol Spritz
    A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

    A new Russian revolution

    Cracks start to appear in Putin’s Kremlin power bloc
    Eugene de Kock: Apartheid’s sadistic killer that his country cannot forgive

    Apartheid’s sadistic killer that his country cannot forgive

    The debate rages in South Africa over whether Eugene de Kock should ever be released from jail
    Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?

    Standing my ground

    If sitting is bad for your health, what happens when you stay on your feet for a whole month?
    Commonwealth Games 2014: Dai Greene prays for chance to rebuild after injury agony

    Greene prays for chance to rebuild after injury agony

    Welsh hurdler was World, European and Commonwealth champion, but then the injuries crept in
    Israel-Gaza conflict: Secret report helps Israelis to hide facts

    Patrick Cockburn: Secret report helps Israel to hide facts

    The slickness of Israel's spokesmen is rooted in directions set down by pollster Frank Luntz
    The man who dared to go on holiday

    The man who dared to go on holiday

    New York's mayor has taken a vacation - in a nation that has still to enforce paid leave, it caused quite a stir, reports Rupert Cornwell
    Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

    Best comedians: How the professionals go about their funny business

    For all those wanting to know how stand-ups keep standing, here are some of the best moments
    The Guest List 2014: Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks

    The Guest List 2014

    Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks
    Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

    Jokes on Hollywood

    With comedy film audiences shrinking, it’s time to move on