New Zealand Licensed Traders Association

1. Law Change

The Secondhand Dealers and Pawnbrokers Act 2004 was passed by Parliament on 6 July 2004. It came into force on 1st. April 2005. This Act will have a major effect on all Secondhand Dealers and Pawnbrokers.

How will this law change affect traders in used goods? Who will be affected? The secondhand part of the Act, lists in Schedule 1, the "articles" that the Act applies to. These articles must be held for 14 days before resale or disposal. Other goods are not part of the Act.

For simplicity we have grouped all similar types of articles together. Trades that may have previously escaped licensing or enforcement are set in bold.

* Bicycles and bicycle spare parts and accessories:

* Farm bikes, quad bikes and motor mowers:

* Motor vehicle (including motor cycle) accessories and parts:

* Boats, boat engines, and boat accessories:

* Sporting equipment:

* Fishing and diving equipment (including wetsuits)

* Portable power tools, and tool sets.

* Computer hardware, software, & other computer related items:

* Cameras and photography equipment:

* Games machines and associated games equipment.

* Compact discs (laser read)

* Items made of, or substantially made of, gold, silver, platinum, brass, bronze, or any combination of those metals:

* Copper in any form: (This includes copper scrap. NZLTA advice)

* Coins, medals, medallions, and military decorations, but not including coins used as legal tender in N.Z.

* Jewellery:

* Watches and clocks:

* Ornamental china and crystal:

* Optical instruments such as binoculars, microscopes and telescopes:

* Sunglasses:

* Electric or electronic consumer goods (including whiteware):

* Musical instruments (other than pianos) and accessories of musical instruments:

* Jackets and coats.

* Leather clothing (but not including footwear):

This Schedule does not apply to pawnbroking. All new and used "goods" are included in the pawnbroking part of the Act. Firearms & motor vehicles are covered by their own Acts and cannot be dealt with under this Act.

What advice do existing licensed Secondhand Dealers &/or Pawnbrokers need? What advice do unlicensed dealers or money-lenders need? This is a whole new "ball game" for most people in this industry. In brief ~

The new Act consists of 62 pages that need, for the most part, to be understood by the management.

Staff, especially those who act as buyers, or deal with pawn contracts, will need training and will need to hold a Certificate under this Act. It is best regarded as a lower form of licence.

Existing licenses will need to be re-applied for before 1/4/06. They will cost $350. Renewal is not automatic and all applications will need to pass police approval. New licenses will only be valid for 5 years.
Certificates will cost $150.

There are strict new rules on keeping Records of who a Dealer or Pawnbroker acquires goods from. In general only certain forms of photo ID. can be accepted, such as a passport or drivers licence.

We, (the New Zealand Licensed Traders Assn. Inc.) are producing advisory material to aid the education of people in the industry. Members will receive a series of simple instruction papers to deal with separate parts of the Act plus a free copy of the Act and other useful information.

The issuing of licenses will be a function of The Secondhand Dealers and Pawnbrokers Licensing Authority. The Register of Licensees will be publicly available on a website. The Courts will no longer have anything to do with licensing secondhand dealers and pawnbrokers after 1/04/05

In the following brief outline of the Act, several parts of the Act apply to both Secondhand Dealers, &/or Pawnbrokers. We have often used the expression "traders" to cover both types of licensee, certificate holders and employees. We ask you to appreciate that this text is an outline of just some important issues, contained in an Act of 62 pages.

You should always note that the expression "Register" now applies to the list of licensees operated by the Licensing Authority. What used to be a Register, Police book or stock book is now the "Buyers Record".

Unlicensed dealers are limited to trading on 6 days in any 12-month period or sells, or receives, more than $2000 in the same period. The fine for being unlicenced can be up to $20,000.

Secondhand Dealers who have been lending money by way of agreements variously known as "buybacks", "conditional sales" or "first option" must comply with the Pawnbroking Section of the Act. Non-compliance may result in a fine of $10,000.

Whereas the Secondhand Dealers Act 1963 regarded all dealing as being within the scope of the Act, the New Act just lists articles that are "portable, valuable and likely to be stolen". . This narrowing of the scope of the Act releases Secondhand Dealers from tedious record keeping of mundane goods, such as household effects some tools and machinery. Persons, who simply deal on goods not in Schedule 1, will not need to be licensed. All traders, licenced or not, should be aware that being in possession of stolen goods can result in a charge of "receiving". Trading in all goods, whether Schedule 1 or not, entails great care in checking the veracity of the seller.

Schedule 1 includes many classes of secondhand goods that had previously escaped licensing. Notably, these are boats and other marine & sporting equipment, computers & electronics, whiteware, games machines, musical instruments, ornamental china & crystal, farm bikes & quad bikes, medals & coins, power tools and sunglasses. Articles in Schedule 1 must be held for 14 days. However, articles in the Schedule are exempt from the rule if they are acquired from certain sources. These are licensed secondhand dealers and pawnbrokers and articles bought from overseas. If the article is for sale on behalf of the owner in which case the Dealer must keep a precise record of the ID and contact details of the purchaser

Schedule 1 has nothing to do with pawnbroking.

Pawnbroking has had a major overhaul. The hold period has been reduced to 3 months. However, the rules have become more complex, but there is an option for the pawnbroker to buy the pawn outright at any time during the pawn period.

Licensing has been changed. A licence will be valid for 5 years and will cost $350. Persons who hold a licence under the 1963 Act, prior to 1/04/05, will not have to re-apply for a new 5-year licence until prior to 1/04/06. Licenses must be displayed in the traders "place of business" and will contain a photo of the licensee. However, persons who operate more than one "place of business" will only need one licence plus a certified copy for the other shops.

Employee Certificates. Employees who make transactions for the licensee, or who supervise employees who buy, trade or pawn, must hold a Certificate in their own name. This is similar to a licence and is expected to cost about $150. Employees who hold a Secondhand Dealers Licence under the Act of 1963 will be deemed to be holders of a Certificate. This will remain effective until 1st. April 2006. Other employees will need to have a Certificate within 2 months of becoming a buyer or supervisor.

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