Pawns of the loan brokers

Click to follow
IF THE recession gets so bad that you are forced to pawn your belongings, you should at least compare the loans offered by the brokers and go to a member of the National Pawnbrokers' Association.

That is the conclusion reached by the London Borough of Islington after it compared the services offered by pawnbrokers in its area.

Islington council purchased new jewellery for pounds 175 and then visited five local pawnbrokers to compare the loans on offer. The largest loan was pounds 30, and the smallest just pounds 15. While the best, Fish Brothers - which offered the largest loan for the lowest annual percentage rate (APR) - did not charge a document fee, the rest did, though in one case it was refundable on redemption. All the brokers who charged a document fee failed to include it in their calculation of APR which, in the opinion of Islington, is a breach of the Consumer Credit Act.

The London Pledge Company had the highest APR of the brokers surveyed, quoting a figure of 100 per cent but calculated by Islington at 156 per cent.

London Pledge had offered the smallest loan and was also the only broker not to be a member of the National Pawnbrokers' Association, whose members are required to abide by a code of conduct.

London Pledge's manager, Stephen Squire, defended the company's rates, saying: 'We like to lend our money on the terms we think are right, not what others think we should. If Islington council thinks it's so high, let them do it. We've got a queue here all day long.'

Philip Rose, chief trading standards officer for Islington, said the survey findings proved the need to shop around. 'People normally only use pawnbrokers if they can't get a loan anywhere else. In those cases it is important to get as much as you can when pawning an item.

'Pawnbrokers have been around hundreds of years and have given good service. We did have a number of complaints over a period of time, about 10, in an area where we don't tend to get complaints.'

(Photograph omitted)