For many years the state Pawnbroker Act has required a South Carolina pawnbroker bond, one of several requirements for licensing a pawn shop. Recent legislation has continued the suretyship requirement and increased the amount of bond. The state statute defines a pawnbroker as any person who engages in the business of lending money on the security of pledged goods, or engages in the business of purchasing tangible personal property on the condition that it may be redeemed or repurchased by the seller for a fixed price within a fixed period of time. In addition to a criminal history inquiry and licensing fees, Section 40-39-50. “Bonding and insurance requirements, . . .”, states that a surety bond in favor of the Department of Consumer Affairs must be executed by the applicant and a surety company licensed to do business in this State in the penal sum of fifteen thousand dollars ($15,000) which must be approved by the administrator. The bond must be conditioned for the faithful performance of the duties and obligations pertaining to the pawnbroking operation. In addition to the state as obligee, the surety bond specifically names pledgors and/or consumers that may sustain a loss or damage so the obligation appears to be open to third party claims. Although the form includes dates of inception and expiration, the surety’s obligation is strictly limited to one bond penalty regardless of the number of terms that the bond is continued (non-cumulative). The South Carolina pawnbroker bond can be canceled by surety on forty five days written notice to the administrator of the Department.
License forms, answers to frequently asked questions and other useful information for pawnbrokers can be found on the Department’s website. Licensees should take special notice of the departmental memo to brokers (“Department’s Notice to Pawnbrokers”), which lists the most current statutory changes, the new surety bond threshold and how to increase any bond in effect before the change in law.
South Carolina surety leader, Surety One, Inc. is a specialist in the bonding needs of the pawnbroker / pawn shop industry. We offer both surety and fidelity bonds in support of pawn operations in all fifty states, Puerto Rico and the U.S. Virgin Islands. Visit us at , call (800) 373-2804, or email us at Underwriting@SuretyOne.com for a South Carolina pawnbroker bond application or information on ANY bonding need.
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