9 Apr 2012 Posted in Parliamentary speeches and responses
Er Dr Lee Bee Wah, Nee Soon GRC
To ask the Minister for Law whether the Ministry will consider regulating pawn shop advertisements to minimise the promotion of pawn shops as places for ready and easy cash and to inculcate responsible money management.
Sir, pawnbroking loans are essentially secured loans. The pawner needs to furnish items of personal property as collateral for a loan. The amount of loan the pawner can take is limited by the value of his collateral. He does not have to come up with cash to service the loan. If the pawner fails to repay the loan, he forfeits the collateral.
Such loans are therefore quite unlike unsecured loans given by moneylenders, where there is much higher potential for individuals to borrow beyond their means to repay. Given this nature of pawnbroking loans, pawnbroking advertisements are of less concern.
We have been monitoring the pawnbroking industry, including advertising by pawnbrokers. We have observed that pawnbrokers advertise mainly through the platforms of TV, radio, buses, taxis and the MRT. These advertisements are taken out by some of the bigger players in the industry.
Nonetheless, we note the Member’s concerns and will look into introducing measures to regulate the content of pawnbroking advertisements. These would likely include stipulating that such advertisements must not be misleading, and must not encourage gambling. We will continue to monitor the situation, to see whether there is a need for even stronger regulatory action, such as restricting pawnbrokers’ advertising channels. The Member may also wish to note that the Ministry is in the midst of reviewing the Pawnbrokers Act, with a view to strengthening protection for pawners and enhancing corporate governance for pawnbrokers.
Sir, on the Member’s second point to inculcate responsible money management, there is already a national financial education programme in place, called MoneySENSE. MoneySENSE works with various partners including community organisations, industry associations and consumer bodies, to educate the public on the importance of thrift, the responsible use of credit facilities, money management and financial planning.
Last updated on 25 Nov 2012