The Government has fundamentally reformed regulation of the consumer credit market, including pawn broking. The Financial Conduct Authority’s (FCA) more robust regulatory regime will help to improve protection for consumers who use pawn brokers.
The FCA requires firms to provide adequate pre-contractual explanation to consumers including making it clear to the consumer that, where an article is taken into pawn, the article might be sold if not redeemed. In addition the FCA has introduced tough rules regarding pawn brokers’ conduct of business. The FCA also requires firms to comply with its high-level principles, including ‘treating customers fairly’.
Where firms breach its rules the FCA is able to impose tough sanctions, such as imposing unlimited fines and ordering firms to pay redress to customers.