Law on consumer pawn loan – impact and requirements

1 The bill introduces into the national order a new type of named contract – “consumer pawn loan contract”, describing it and enumerating the provisions that must mandatorily be included in such a contract.
Particularly important in the bill are the provisions on the expiration of the pawn security and the calculation of the total amount to be repaid.

2 In addition, a broad information obligation is imposed on the entrepreneur performing pawnbroking activities towards the consumer, which must be fulfilled when concluding the above agreement. A requirement is introduced to conclude this type of agreement in writing under pain of invalidity.

(3) The law also describes a sub-type of the above agreement – “a consumer pawn loan agreement concluded at a distance”, involving additional obligations for the entrepreneur and special withdrawal rules for the consumer.

4 The law also establishes rules and deadlines for the sale of a pawnbroker’s collateral item, requiring the entrepreneur to conduct an “electronic auction” for items worth more than PLN 500. The law also indicates the obligatory elements of the auction announcement and the rules for pricing the items.

5 New rules for the performance of pawnbroking activities have also been introduced – the permitted forms of activity have been specified and an obligation to enter the register of entrepreneurs performing pawnbroking activities has been stipulated. This register is maintained by the Financial Supervision Commission. The law provides detailed rules as to entry in the register and its maintenance.

6 Control over pawnbroking activities is carried out by the Trade Inspection. The Law also includes criminal provisions, providing for sanctions against entrepreneurs for violation of obligations under the Law.