Quick Money, Expensively Paid: Vienna Pawnbrokers Cash In Heavily

Consumer advocates criticize high interest rates, numerous fees – and above all, inadequate or non-transparent information on pawn tickets. According to the Chamber of Labor, the monthly charged interest rates ranged between 3.5 and five percent, which corresponds to an effective annual interest rate of up to 60 percent – for example, at the AV pawnshop.

Pawnshops in Vienna charge up to 60 percent interest

The cheapest in the test was the Merkant pawnshop with 1.5 percent per month according to the fee schedule, but the interest rate calculated by the Chamber of Labor was actually seven percent – due to a semi-monthly calculation method that is common in the industry.

"Many consumers do not realize how expensive a pawn loan actually is," warns Chamber of Labor expert Christian Prantner. The problem is not only the interest rates but also many hidden additional costs, such as:

Valuation of pawned items varies greatly

For the test, AK test buyers pawned identical notebooks and gold coins. The evaluation ranged from 50 to 150 euros for a notebook and from 326 to 425 euros for a gold coin – depending on the provider.

Notable: Only two of the seven pawnbrokers clearly indicated interest and fees on the pawn tickets. Information on the term, interest days, or breakdowns upon return was often missing. In one case, the reference to terms and conditions on the back of the ticket was an empty phrase – there was nothing there.

AK demands legal minimum standards

"Our investigation reveals significant transparency deficiencies," said Prantner. Therefore, the AK demands legally defined minimum contents for pawn tickets – including clear information on:

The federal government has also announced corresponding measures in the current government program. The AK is now pushing for their rapid implementation.

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This article has been automatically translated, read the original article here.