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How Pawnshops Verify That Pawned Items Are Not Stolen

While the laws may vary from state-to-state, it’s easy to understand why pawnshops across the country are prohibited by law from accepting any stolen items for a collateral loan. The hard part is figuring out if a pawned item is in fact stolen.

While there is no way to be 100% sure if an item is not stolen, there are precautions Provident Loan Society, or any reputable pawnshop for that matter, will take to ensure that the person pawning the piece is indeed its rightful owner.

Pawnshop Verification Process

  • Identification: The first step we take with all collateral loan applications is to ask for the person’s name, address, and identification. If it’s a photo identification, and the person on the I.D. doesn’t look like the person in front of you, or if the person is reluctant to provide this documentation, then we probably won’t make the loan.


  • Ownership Affidavit: Provident can require an Ownership Affidavit for any collateral loan. The person signs the Ownership Affidavit before a notary public and attests, under law, that they actually own the item and that there are no liens or other encumbrances against it. Again, not a foolproof way to ensure ownership, but it helps.


  • Examining the Item: Another way to determine if an item has been stolen is to simply look closely at it. For example, if an engagement ring looks brand new (i.e., it doesn’t have any sign of wear or soap or dirt under the stone) and the person does NOT have a bill of sale for it, this may be something we don’t want to handle.


  • The Instincts of Our Branch Managers: We rely on the experience and instincts of our branch managers to make a judgment call, based on the applicant’s demeanor and behavior. Are they jittery and nervous? Are they willing to take a loan for a lot less than the object is worth, with no argument? These could be tell-tale signs that the item is stolen. On the other hand, we’ve had people bring in heirloom jewelry with a dated photo of Grandma as the only proof that it has been in the family for years. In a case like this, our branch managers really have to use their gut feeling to make a determination on whether or not the person is telling the truth.

Over the Years…

…Provident has revised its proof of ownership policies as a result of what we see in our branches. For example, there was a rash of chain snatchings on the NYC subways in the 1980s. So we made it a point not to accept broken necklaces and chains, as these could be telltale signs of items taken from unsuspecting victims. We weren’t required by law to do this. To us, it just made sense.
Years later, we amended our proof of ownership process for larger loans, based on an incident that happened to many New York City pawnbrokers. A gentleman was securing very expensive “loaner” necklaces, earrings, and bracelets from high-end jewelry designers for his clients to wear at galas and award shows. This practice has been done for years in Hollywood by famous jewelers such as Harry Winston, Bulgari, and Piaget, who loan their showpiece jewelry to stars to generate buzz on the red carpet.
Apparently, this gentleman got loans totaling $500,000 on this expensive jewelry from pawnshops around town and used the money to support a lavish lifestyle.
Eventually, he was arrested and was taken to court, where it was determined that the gentleman did not have the right to pawn items that were not legally his.
As a result of this incident, we now require more definitive proof of ownership for larger loans. Documents such as a bill of sale, a past-dated jewelry appraisal, or inclusion of the item in an insurance policy, are acceptable.

Pawnshop Security Measures

We take additional precautions to ensure that items brought in for collateral loans are not stolen. For example, we have video cameras over the teller windows at all our branches to record every transaction. In addition, each month, we receive notices from the NYC Police Department and from national jewelry and numismatic associations with descriptions of items that have been stolen, so we can spread the word to all our branches to be on the lookout for these specific pieces.

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