Court rules against pawn shops

//breakingbelizenews.com/wp-content/uploads/2017/02/pawn-shop.png">

By BBN Staff: The recent Supreme Court Judgment, Janine Vega Vs. EZY Loans Pawning and Payday Advance, has brought into the spotlight an issue that many Belizeans have been complaining about for years: pawnshops charging sometimes unfair, and perhaps even illegal amounts for interest.

Many Belizeans, due to the unfair amount on repayment, have lost properties such as land titles, and ownership of their vehicles, to pawnshop owners.

Apart from towering interest rates, many pawnshop customers are unaware that these establishments have them sign onto agreements that are unenforceable, because they do not comply with the Money Lenders Act, Chapter 260 of the Laws of Belize.

In her judgment, Justice Sonia Young, not only set out guidelines for Belizeans to follow the next time they visit a pawn shop, but also gave some redress for those who have lost their securities, due to the unfair payment scheme.

The first guideline refers to the agreement: pawnshop customers are advised to look at the written agreement to ensure that it complies with the law. According to Section 13 of the Act, the agreement signed by the lender and borrower must include, “all the terms of the contract, and in particular shall show the date on which the loan is made, the amount of the principal loan, and the effective annual rate of interest charged on the loan.”

The second guideline refers to the rate of interest charged. Vega had gotten two loans from the lenders at an interest rate of 120 percent per annum. According to Justice Young, “Any interest charged which exceeds 48 percent per annum is excessive and the transaction is harsh and unconscionable.”

Through ordering the money lenders to return Vega’s properties that they had seized, Young also made it possible for people who had lost their property to unfair interest rates within the past six years, to recover those properties through the court. Her judgment also expanded the scope of Belizean law, with a recent case locally, that attorneys can cite when representing aggrieved borrowers.

Several members from the legal community have commented on the importance of the case, including attorneys Kevin Arthurs and Estevan Perrera, who represented Vega, as well as career attorney and Belize City Mayor, Darrell Bradley.

Arthurs and Perrera gave an extensive media interview advising Belizeans on how to avoid being treated unfairly by pawnshops. A key piece of advice was to ensure that the pawnshop always gives updates on the remaining balance of the loan.

Bradley, in his assessment of the case, explained that it highlighted a greater need for the government to consider strengthening consumer protection laws, with respect to financial institutions.

 

Advertise with the mоѕt vіѕіtеd nеwѕ ѕіtе іn Belize ~ We offer fully customizable and flexible digital marketing packages. Your content is delivered instantly to thousands of users in Belize and abroad! Contact us at mаrkеtіng@brеаkіngbеlіzеnеwѕ.соm or call us at 501-612-0315.

 

© 2017, BreakingBelizeNews.com. Content is copyrighted and requires written permission for reprinting in online or print media. Theft of content without permission/payment is punishable by law.