Pawnbrokers Must Stay Compliant with Pawnbrokering Act
Pawnbrokers provide services to lend money on an item on a short term basis in exchange for something of value. This item could be a gold watch, a power-tool, a laptop computer or whatever else that can have a value placed on it. By pawning an item, there will be terms for the exchange that includes a contract with a repayment plan with a deadline and if the deadline is not met, the pawnbroker can then sell that item to replace the money that was loaned out.
Florida Department of Agriculture and Consumer Services’ Pawnbrokering Act has enacted laws to protect both the consumer and the pawnbroker. These laws include the licensing of pawnbrokers, the use of written contracts, terms that allow for finance charges and a time limit for repayment, the availability of repayment extensions at the discretion of the pawnbroker in agreement with the pledger, definitions of a default date, law enforcement rights, and other compliance factors.
When a pawnbroker applies for a license, he/she must meet the state of Florida laws in order to keep their license in good standing. This includes the business maintaining a net worth of $50,000 or more. If the $50,000 minimum net worth is not met then the pawnbroker is required to secure a $10,000 surety bond, letter of credit or certificate of deposit, which must be verified through submitting a required financial statement to the state.
The bond, letter of credit or certificate of deposit guarantees that the pawnbroker performs, fulfills, and carries out any duty or responsibility prescribed in the Pawnbrokering Act and further, that the pawnbroker does not harm a consumer through misrepresentation, fraud, or breach of contract, or financial failure of the business.
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