Some requirements need to be met by all secondhand dealers and pawnbrokers licence holders.
Below is information relating just to secondhand dealers.
If you are defined as both 'secondhand dealer' and 'in business' you will need to be licensed under the Secondhand Dealers and Pawnbrokers Act 2004. If you carry on business as a secondhand dealer without a licence you could be prosecuted and fined up to $20,000.
Secondhand dealer definition
A secondhand dealer is:
a person who buys (for the purpose of trade), sells, exchanges or otherwise deals in secondhand articles or scrap metal (but who is not a pawnbroker or an employee of a secondhand dealer and pawnbroker).
This definition includes individuals, partnerships and companies.
You will only be a 'secondhand dealer' if the goods you buy, sell, exchange, or otherwise deal in are listed as 'articles' in the Act. You are also covered by the definition of 'secondhand dealer' if you deal with scrap metal.
Items defined as articles.
'In business' definition
You will be presumed to be in business as a secondhand dealer if you or your company, in any 12 month period, buys secondhand articles or scrap metal for the purpose of trade on six or more different days.
You will also be presumed to be in business as a secondhand dealer if, in any 12 month period, you or your company sell, exchange or otherwise deal in secondhand articles or scrap metal (acquired for the purpose of trade) on six or more different days or so as to receive revenue of $2,000 or more.
People who do not need a secondhand dealers licence
The following are not regarded as engaged in business as secondhand dealers when selling secondhand articles or scrap metal:
- a person who acquires secondhand whiteware as a trade-in when selling new whiteware
- a licensed firearms dealer when selling firearms
- a licensed auctioneer selling secondhand articles and scrap metal at auction under the Auctioneers Act 1928
- a charitable or non-profit organisation that does not purchase (or otherwise provide valuable consideration when acquiring) the articles
- an internet auction provider
- an agent of the Crown.
Record keeping
All licensed secondhand dealers must keep 'dealers records' containing certain information.
Recording articles
List of items defined as articles.
Remember that "copper in any form" is an 'article', so the following rules apply to any copper you acquire irrespective of its form or usefulness.
Your dealers record must record the following information in relation to all articles you acquire in the course of your secondhand dealing business:
- the identity of the person from whom you acquired the article (see below for further information)
- a description of the article, including its serial number or any other unique identifiers
- the price you paid for the article
- the unique number that you assign to the article for your business purposes
- the name and signature of any person who conducted the transaction on your behalf
- the date of the transaction
- if the article has an apparent resale value of $40 or more, either the date on which the article is sold or an account of how the article was otherwise disposed of.
Details required of person from whom article is acquired
Your dealers record must include the following details relating to an individual's identity:
- full name
- contact address and phone number
- date of birth
- their signature
- details about how you, or the person you authorised to conduct the transaction, verified the persons identity.
Verification of identity
You must verify the identity of the person from whom you acquire an article. You can only do this by:
- sighting the person's authorised identification
- or if the person is personally known to you, by your personal knowledge.
If you choose to verify the person's identity by personal knowledge, your dealers record must show the following details to establish the identity of the person from whom you acquired the article:
- full name
- contact address and telephone number
- the fact that you verified the person's identity from personal knowledge.
If you choose to verify a person's identity from personal knowledge and incorrectly record any of these details in your dealers record you will be deemed to have made a false entry.
You do not have to verify the person's identity if you acquire the goods in any of the following circumstances:
- at public auction conducted by a licensed auctioneer
- through an Internet auction run by an Internet auction provider that complies with the prescribed requirements
- at a garage sale and you keep a record of the address at which the goods were sold
- from a seller who is overseas.
Variation of record keeping rules for scrap metal transactions
If you acquire any scrap metal in the course of your business as a secondhand dealer you must keep the following details:
- the full name, contact address and telephone number of the person from whom you acquired the scrap metal
- the manner in which you verified the person's identity
- the person's date of birth
- the person's signature
- a description of the nature and quantity of the scrap metal acquired
- name and signature of a person who conducted the transaction on your behalf
- date of the transaction.
Offence in relation to details to be recorded
It is an offence which carries, on conviction, a fine of up to $10,000 if you, without reasonable excuse, fail to:
- keep a dealers record
- record in your dealers record any information required in relation to a transaction
- add the required information to your dealers record as soon as the information is available.
It is also an offence, carrying the same penalty, to make a false entry in your dealers record.
Storage of dealers records
It is an offence, carrying on conviction a maximum penalty of $10,000, to, without reasonable excuse, fail to keep your dealers record:
- for three years from the date of the transaction to which it relates
- at your principal place of business.
You must, when required to do so by a member of Police, show your dealers record and any information recorded in it, or make a copy of all or part of your record and give that copy to the Police officer. If you fail to do so, without a reasonable excuse, you could be convicted of an offence and fined up to $10,000.
Handling articles
Items defined as articles.
You could be liable to a $10,000 fine if convicted of failing to comply with the retention and labelling requirements below.
Articles to be kept for 14 days
When you acquire an article you must keep it, in an unaltered state, for 14 days from the date of the transaction. For that first 14 days after the transaction you must store the article in a place that can be conveniently inspected by a member of Police.
You do not have to keep the article for 14 days if you:
- acquire it from another licence holder
- return the article to the person from whom you acquired it.
You also do not have to keep the article for 14 days if you sell the article as agent for the owner. You must record in your dealers record the purchaser's details (full name, date of birth, contact address, telephone number and signature) and record the means by which you verified the purchaser's identity.
Labelling articles
You must attach a label to any article you acquire. This label must bear the number that you assigned to it in your dealers record and stay attached to the article until you have sold it or otherwise disposed of it.
Groups of articles
Sometimes you may buy a group of 'articles' as a single item, for example a box of miscellaneous goods. If you do this, generally you do not have to record every article individually.
However, you must treat each article individually in such a group if:
- the apparent resale value is more than $40
- the article has a serial number which may be used as a unique identifier.
Once you have identified such articles, you must treat the remaining articles in the group as if they were one article. This means that you do not have to:
- individually label the remaining articles within that group
- record the disposal of the group of articles or any individual articles within that group.
Buyback contracts
No licensed secondhand dealer may enter into a buyback contract while apparently acting as a secondhand dealer. It is an offence, carrying a penalty of up to $10,000 on conviction, to enter into a buyback contract in those circumstances.
A buyback contract is a contract under which a seller sells goods to a buyer on condition that the seller can repurchase the goods at some future date, but at a price greater than the buyer paid for them.