Pawnbrokers and secondhand dealers would need to file standardized electronic transaction reports into an online data system and meet other stricter regulations under two bills now going through the Honolulu City Council.
Bills 51 and 52, which are backed by the Honolulu Police Department, would make it easier for investigators to track down and recover stolen merchandise, said Maj. Richard Robinson, commander of the Criminal Investigations Division. Current laws are also confusing and convoluted and need to be consolidated, Robinson said.
The bills would affect not just pawnbrokers, those who provide loans to customers using their valuables as collateral, but also others who buy and sell valuable secondhand items from jewelry to golf clubs. HPD estimates that as many as 320 businesses could be affected.
The heads of the Hawaii Pawnbrokers Association and the Hawaii Jewelers Association say they support the intent of the bills but are raising concerns about some provisions that could make transactions more burdensome or uncomfortable for businesses and customers. They want to meet with authorities about the proposals.
As a result, Councilwoman Carol Fukunaga, chairwoman of the Public Safety and Economic Development Committee, chose not to put the bills on her agenda this week and said she intends to meet with the different interests first.
“There were a number of concerns raised,” Fukunaga said.
Robinson said pawnbrokers and secondhand dealers are now regulated by a cumbersome series of state and city laws. The bills “will provide greater clarity and ease in enforcement for HPD but, just as importantly, provide clarity for the pawnshops so they know what they can and can’t do,” he said.
HPD re-established a two-detective pawnshop detail in August 2011 because “we believe that pawnshops are places where the criminal element are able to sell a lot of their stolen goods.”
Police contend that property crime is driven by drug use.
“I don’t believe people are burglarizing houses to steal the jewelry to wear,” he said. “They’re (turning) it into quick cash to buy drugs.”
After a six-month education and warning period, stricter enforcement of pawn and secondhand dealer shops began in February 2012, Robinson said.
About $3 million in jewelry and precious metals is stolen annually on Oahu, and less than 1 percent is recovered, Robinson said. Municipalities in all 49 other states have implemented some form of automated pawn management system, and all have seen a significant increase in the percentage of stolen property recovered, the major said.
In Hawaii, Honolulu would be the first of the counties to implement such a system.
The key component of the two bills is the requirement for pawnbrokers and secondhand dealers to report all transactions through a standardized, electronic data system. The current law has the businesses submitting 10,000 to 12,000 handwritten transaction slips a month, according to HPD records.
Converting the system into a standardized and electronic one would place the transactions into a single data system, make the process more efficient and less cumbersome for HPD, and reduce the number of errors that can occur, Robinson said. The current system is “very time-consuming and very inaccurate,” he said.
Leaders of both the pawnbroker and jeweler associations said they appreciate the need to move to an electronic system but have some concerns with the bills’ requirements.
John Spiker, president of the Hawaii Pawnbrokers Association, said the cost of implementing the system and the possibility that the sensitive information of its customers could be compromised are among the major concerns.
“We just want to make sure the information is safe and the cost is not an issue,” Spiker said.
SOME pawnbrokers are old-timers who don’t use computers to conduct business, Spiker said.
Besides the annual cost, some would need to pay for Internet access, firewall security measures and other expenses under the new system, he said.
“It requires personal information of the customer that has nothing to do with the transaction,” Spiker said.
Robinson said the city has reached a tentative agreement with Business Watch International to join its Regional Automated Property Information Database system, a system now being used by law enforcement authorities. Using asset forfeiture money, the city will pay the $290 annual subscription fee for the first 150 businesses that sign up, Robinson said. Any additional businesses will have to pay their own way, he said.
When the project first began, HPD estimated there to be fewer than 150 pawnbrokers and secondhand dealers on Oahu, he said.
No transaction fee would be charged, he said. Property crime victims could also input the data of their stolen items, making it easier for dealers to flag the items, he said.
Spiker and Michael D. Parker, president of the jewelers association, said they also don’t like the new information that appears to be required under the reporting system.
“If you’d never come into my shop before, would you feel comfortable giving me your Social Security number and personal information like your tattoos and scars?” Spiker said. “We already have your ID and fingerprint you. It’s just too invasive on the customer. It would be asking for highly personal information that has nothing to do with the transaction and is not relevant.”
Parker said a good portion of the people who sell jewelry to his stores are grandparents who find their children or grandchildren would rather receive cash or investments.
The new bills “would require me to stand them up against the wall and take a photo,” Parker said. “That’s just not appropriate to treat people like that. I’ve already taken their IDs and gotten their information from them through that.”
Spiker and Parker said they are in general support of a standardized electronic database and that they like some aspects of the bill. But they also contend HPD is overstating the impact the new bills would have.
Parker said he’s been seeing people at swap meets offering to buy gold and other jewelry on the spot.
Spiker said many stolen items nowadays are sold online.
“It’s wide open and hard to regulate,” he said. “Think about it: If there’s a person out there that’s stolen something, they can do it without coming into our shops and getting fingerprinted and being asked for their IDs with copies (of those transactions) going to the Police Department every week.”
