Start-up company Unbolted recently argued they had started the company to challenge the way people access credit. Stating that they are offering a superior and more transparent offering that Pawnbroking.
Chief Executive of the NPA in an open letter in Professional Jeweller Magazine takes Unbolted’s argument to pieces…
“Firstly, the business “Unbolted” may offer loans against high asset value items but so do many of our pawnbroking members, this is nothing new.
They offer a three hour valuation service whereas most pawnbrokers will offer a faster service. With this is mind their claim that they want to challenge the ‘outdated pawn industry’ is completely unfounded, as is the comment about a ‘certain stigma …about the industry’.
The further claim that this will be “transparent with fairer terms” also implies there is something amiss with the profession until they came along.
Pawnbrokers are regulated by the FCA (Financial Conduct Authority) and any suggestion that they are not behaving in a transparent way is wide of the mark.
Further, as they should know, the law requires that the publicised rate shown by pawnbrokers must be the highest rate charged. Obviously someone pawning a Rolex watch is going to gain a better rate than someone wanting to borrow a small amount of money, so they are not comparing apples with apples.
The claim that ‘Unbolted also differentiates itself from other lenders as …any surplus is returned to the customer’ is frankly insulting. As any pawnbroker would know, it is a legal requirement for any surpluses after loan interest and reasonable costs to be returned to the customer, unless the loan is for less than £75. So for ‘Unbolted’ to claim this as a point of difference is astonishing.
Finally, if they wish to champion change they might look to their own website which currently states that they charge set up fees and that no credit check will be undertaken.
FCA rules state clearly that if you charge set up fees you must undertake a creditworthiness check, so it would seem that they do not currently comply with government requirements.”