Curbing stolen goods in pawn shops

By Spencer Douglas

A City of Ottawa report that highlights the challenge of curbing the movement of stolen goods through local pawn shops has concluded that the Ontario government needs to “modernize” the provincial Pawnbrokers Act before police can seriously crack down on the problem.

The Pawnbrokers Act defines the regulations pawn shop owners must follow to adhere to responsible business practices. The main issue with the act, critics have long complained, is that it fails to provide adequate tools to deal with stolen goods that often make their way into pawn shops.

According to the report, which was tabled on Nov. 16 at the city’s community and protective services committee, in 2014 the Ottawa Police inspected 14 pawn shops and found more than $4,000 in stolen goods, which were, in turn, recovered.

Police also issued 48 summonses for violations of city bylaws under the Pawnbrokers Act, the report noted.

There have been numerous requests to update provincial regulations from various municipalities and organizations, including the Ontario Association of Chiefs of Police and the Municipal Managers, Clerks and Treasurers of Ontario.

The Nov. 8 report, prepared by city bylaw official Roger Chapman, noted that in 2011, “the OACP reiterated its call for a province-wide electronic transactions database to assist police in identifying stolen goods,” and that “despite expected new legislation, none of the requested changes have been made.”

Joe Couto, the OACP’s director of government relations and communications, said there’s been no progress on the issue for years.

“The provincial government didn’t change the act from 100 years ago due mainly to privacy issues,” he said. “The Pawnbrokers Act has pretty much been left alone.”

Concerns about protecting the privacy of individuals who legitimately use pawn shops is a major hurdle when it comes to changing the system, the city report acknowledged. It referred to a 2007 court decision that “centered on the collection of personal information on individuals pawning/offering goods for sale and its routine transmission to the police.”

Pawnshop owners are not required by law to give police access to their in-shop files, which has made it difficult for police to track stolen items.

A solution that is often discussed is the need for online databases that house information about how goods make their way into pawn shops.

But Nolin Caron, general manager of Howard’s Buy-Sell-Trade in Centretown, said the tension between crime-fighting and privacy protection isn’t easily resolved.

“It’s a really tricky subject to find the balance of privacy rights and the good for the general public when it comes to the Pawnbrokers Act,” said Caron, standing behind a glass case filled with a wide assortment of watches and beneath a row of acoustic guitars hanging from a back wall.

The store, located at the corner of Bank and Flora streets, is filled with a diverse selection of pawned items that includes old video games and headphones.

In Ontario, there are no provincial electronic databases for pawn shop owners to record transactions. Therefore, transactions are generally recorded manually and submitted to police services the same way. This makes it more difficult, time consuming and costly to identify stolen goods.

Couto still believes Ontario is behind in pawn shop technology.

“It is very hard to track down goods that could be stolen. We just don’t have the capacity or ability to search,” he said. “The pawn shops aren’t in the current digital world.”

Some municipalities, such as Hamilton and Richmond Hill, have local databases managed by local police. However, these require the investment of resources to develop, implement, maintain, and enforce the data management systems.

Other jurisdictions in the U.S. and Canada also have online databases.

“In Minnesota, they have an online system that we looked at many years ago,” said Couto. “The database had very good parameters about what you could search, and is running successfully for the most part.”

But Caron said a big question is who would be paying for the online databases, if implemented.

“With all the regulations small businesses already go through, just a small change like this can be really devastating to the bottom line,” Caron said. “If it didn’t cost the business anything I would be all for it.”