What you need to know about pawnshops (Conclusion)

THIS is a continuation of last week’s publication of the Bangko Sentral ng Pilipinas’ primer on pawnshop operation basics.

Frequently Asked Questions on Pawnshops:

* What are the basic obligations of the of the pawnshop owner/operator to the pawners with respect to their pledged articles?

- The owner/operator should preserve and safeguard all pledged articles. The pawnshop operator/owner must see to it that pawns are kept inside the safe or the concrete vault except for the bulky ones. These bulky pawns should still be insured and kept within the premises of the pawnshop.

- The pawnshop owner is liable for any pawn lost or destroyed because of his or her employee’s negligence, fault, delay in delivery, or willful violation of the pledged agreements.

- The pawnshop owner or operator should not use the pledged articles or allow his employees to use them for any purpose without the expressed consent or authority of their pawners, unless their continued use is necessary to their preservation.

- The pawnshop owner or operator should return the pledged items in the same condition when they were first pawned to their respective pledgors or owners, upon full settlement of the latter’s loan obligations.

* Should a pawnshop release a pawned article even if its owner-pledgor does not present and surrender the coverpawn ticket?

- Pawner should execute and submit and affidavit of loss. In this case, however, they should ascertain the identity of the pawner to make sure that the pawned item is not released to unauthorized persons.

- Does a pawner have the right to demand payment for his pawned article which has been destroyed or becomes defective while in the pawnshop’s custody?

- It depends. If the pawn is lost, destroyed, or becomes defective due to a fortuitous event and without the fault of the pawnshop, a pawner cannot recover any amount. However, if the loss, destruction, or damage to the pawn was through the negligence or fault of the pawnshop, the pawner can file a civil case in court which will determine the extent of the pawnshop’s liability.

* What are examples of fortuitous events?

- Natural calamities such as fire, earthquakes, typhoons, and public disorders such as robberies.

* Can a pawner redeem his pawn after the expiration of the 90-day grace period?

- Yes, if the pawnshop allows him to. Legally, however, after the expiration of the 90-day grace period, the pawnshop acquires the right to dispose of the unredeemed article through auction sale.

* If the pawner who wants to redeem his pledged article before maturity date is informed by the pawnshop that the pawned article has already been sold at auction, what can he do to protect his rights?

- The pawner can file a criminal and/or civil case, as well as administrative complaint with the Bangko Sentral against the pawnshop.

* How can the pawner control the items for auction for the purpose of acquiring back the item he pawned but was not able to redeem?

- The pawner can only participate and actually bid in the auction sale. Beyond that, he has no right over any aspect of the auction sale proceedings. At this point, the pawnbroker has unquestionably acquired the right to sell the unredeemed article, assuming it has complied with all the legal formalities required.

* Can the owner claim his article which has been stolen, then pawned?

- Yes, the pawnshop can be ordered by a competent court to return stolen articles pledged with it to their legal owners.

Note: You may email us at totingbunye2000@gmail.com. Past articles may be viewed at http://speakingout.ph/speakingout.php.