Citizens Advice Column

By Jane Owens

I am having a cash crisis and am considering pawning some of my personal items to raise money. Do you think this is a good way to borrow money?

Pawnbrokers lend money against the value of articles left with them as security. So if you don't repay the loan and interest (typically six per cent a month) the goods can eventually be sold to recoup the debt. Pawnbrokers can provide a useful service but this is not a cheap form of credit. People often use them because they need money quickly and don't want to be hounded by debt collectors if they can't afford to repay what they owe.
The amount of money pawnbrokers agree to lend you need not relate to the full value of the goods you leave with them. They must give a receipt for the goods (called a 'pawn receipt'). The credit contract will state that the pawnbroker is lending you money for at least six months, but you can redeem your goods at any time during that period by presenting the pawn receipt and paying off the loan plus interest. The period can be extended by mutual agreement if you pay the interest on the loan and re-pledge the goods, but you need new paperwork.
A record has to be kept by the pawnbroker at every stage of the process, even if the pawned item is sold, and notices are required to tell you before and after any sale. You are entitled to collect the pawn item at any time up to the moment it is sold, provided you pay interest for all the period you have had the loan.
If you think you might not be able to repay this money, don't pawn something you can't live without. If it is something precious, check out your insurance position - it's very unlikely to be covered by the pawnbroker's insurance if it is stolen (most raids on pawnbrokers are at gunpoint), but it may be covered by your home contents insurance. If pledged goods are lost or stolen while pawned, you still owe the money to the pawnbroker. The pawnbroker may be held liable for the value of the goods only if you can prove negligence.
Most pawnbrokers belong to the Pawnbrokers' National Association, which has a standard agreement. Loans from pawnbrokers are covered by the Consumer Credit Act 1974, and pawnbrokers must have a credit license.
For several years now there has been a very similar agreement you can make by selling the goods with a right to buy them back within a given period, say six months. These are called buy and sell back agreements. So far these have not been regulated, so make sure you know if you are selling the item or just leaving it as security.

I have been working at a local shop for the last three months. I want to take a week off next month but my contract says I am not entitled to paid holiday until I have worked there a year. Is this legal?

Your employer is breaking the law. Under the Working Time Regulations 1998, nearly all workers have a statutory right to four weeks' paid holiday a year - only certain workers like those in the Armed Forces have different rights. And there is no age limit either.
Your employer can, however, include Bank Holidays in this amount.
Workers in their first year of employment are covered by a special rule within the Working Time Regulations, as are part-time workers. The amount of paid holiday that may actually be taken at any one point usually builds up monthly in advance at the rate of one twelfth of the annual entitlement each month. So you would be able to take a week but not two weeks off, for example, since you have worked there for three months. But your employer can specify when you can take your holidays.
If your contract tries to give you less paid holiday than the statutory entitlement, the statutory entitlement applies, even if you have signed the contract.
And if your employer were to sack you for trying to enforce your right to holiday, this would be classed as an automatic unfair dismissal and you would be entitled to compensation.

I recently booked flights with a budget airline for a European City break. When I got to the airport I found that, despite having email booking confirmation, we were not booked on to the flight. My credit card statement shows that I paid for the tickets, but the airline won't take telephone calls, and has not responded to the letter I sent six weeks ago.

As is always the case when purchasing a service, the service of the airline must be 'carried out with reasonable care and skill' (so, hopefully, no drunk pilots), and 'carried out within a reasonable time' (so no 'unreasonable' delays - although what is 'reasonable' may be open to debate).
The service must also be as it is described in the contract. If the contract includes terms which try to take away your statutory rights or which are unfair, they cannot be enforced.
If it says that you have a guaranteed seat (although many airlines do not make this promise) and you do not, then this would be a breach of contract for which you can expect compensation.
If you are 'bumped off' a flight within the European Union because of a lack of available seats, you may be able to claim compensation under the European Denied Boarding Compensation Regulations.
The question of at what stage a contract actually exists when buying online is quite contentious: some say it is when email confirmation is received by the customer, but this has not yet been tested in law. It is best to seek the advice of a trained advisor on this point.
In 2002 the Air Transport Users council set-up a series of voluntary commitments for airlines covering reservations, delays, information, refunds and compensation (these can be found at www.auc.org.uk). But the key word there is 'voluntary', and many of the budget carriers do not subscribe to this code.
If the airline is particularly reluctant to respond to your letters, you can also seek redress through your credit card company. If you booked by credit card and the total you paid was more than £100, then the credit card issuer is also jointly liable for any loss under Section 75 of the Consumer Credit Act.

For more information and advice go to www.adviceguide.org.uk or contact your local Citizens Advice Bureau.

The CAB is a voluntary organisation offering a free, independent and confidential service. Our volunteers receive comprehensive training and support. If you can offer two days a week to help us deliver our service please contact:

Jane Owens,
Wavertree CAB,
242 Picton Road,
Wavertree,
Liverpool, L15 4LP

Tel: 0151 522 1404
Email: janemowens2@hotmail.com