Conference of the League of Pawnshops. Second day

The second day of the annual XXII conference of the League of Pawnshops brought participants interesting discussions, food for thought, and guidelines for action. More than 500 representatives of pawnshops from all over Russia shared their experiences and looked for ways to survive. Read about the first day here.

A look into the future

Mikhail Unksov, President of the League of Pawnshops

, identified the control of the Central Bank as the main problem of the modern pawnshop. At the same time, after being classified as a regulator, the sphere gained two advantages:

The activity does not fall under the type of sale of goods and services, which means that the use of universally introduced online cash registers is not required.
Increasing the professional level of managers and accountants of organizations - otherwise you simply cannot survive now; you have to constantly improve your competencies.

Everything else is cons. The speaker gave an analogy with an eagle and a mosquito - no matter how hard the regulator tries, neither a huge mosquito nor a small eagle is viable, so it is impossible to fit pawnshops into the framework of classical financial organizations.

In general, the leaders of the League of Pawnshops note a difficult and unfavorable situation in the industry. Although slowly, things are moving towards the register, and this will automatically lead to easier liquidation of pawnshops based on two or more regulatory orders, while now it is possible to close a pawnshop only by court. This is a danger, because it is easy to get an order, but challenging it in court is difficult.

At the same time, the speaker noted that there are also positive precedents. Thus, a very serious and important issue is the recent decision of the Supreme Court on the non-bindingness of a loan agreement in connection with the presence of a pledge ticket of the established form containing all the necessary information. The decision was made on a special occasion, but it is important for the entire market and could cause a new global restructuring if it helps pawnshops get out of the scope of Federal Law 353 “On consumer credit (loan).”

Daily matters

In addition to strategic issues, the participants also discussed current affairs. Thus, Andrey Belov, head of the control department of the Assay Chamber of the Russian Federation

, revealed a number of operational issues regarding the accounting of precious metals and stones. The decision is still in force that it is impossible to indicate the net weight of gold in products with inserts without fastening, which means that only the total weight of the product must be indicated in the product description.

The speaker also noted that he is aware of the problem of identifying stones - it is not always possible to determine their type and quality accurately in pawnshops, which means there cannot be sanctions for this either; the relevant instructions have been communicated to the inspectorates for management during inspections. At the same time, the moratorium on inspections by the Assay Chamber of the Russian Federation of micro and small enterprises continues until the end of 2022. You can check whether your company is under inspection on the Federal Tax Service website. The speaker also expressed concern about the confusion of the concepts of pawnshop, purchase, and consignment shop in one place.

Those present were interested in the question of internal instructions for accounting for precious metals and stones. To avoid disagreements during inspections, the speaker promised to prepare a letter explaining the requirements of the document.

Another pressing issue is the influx of fakes. Nowadays it is completely impossible to rely on marks and imprints; there is only one way left - to saw, and very deeply. The Assay Office does not see any other solution available to most pawnshops.

The discussion of AML/CFT burst into this seemingly distant discussion, to which the speaker could not restrain himself: “You are all zombified by your AML/CFT. No fool launders money through a jewelry store,” which caused a storm of applause. He voiced what pawnbrokers have been trying to convey to the RFA for a long time and unsuccessfully, but work on AML/CFT takes a lot of time and effort, along with interaction with the Central Bank of the Russian Federation on bureaucratization and the degree of responsibility. Almost every organization has fines and regulations in this area.

Things are going well

Seizure of collateral by investigative authorities is another hit. Sergey Shugaev, Chairman of the Board of Directors of Kuksha CJSC, Deputy Chairman of the Moscow Bar Association "Arbat"

, revealed the “kitchen” of the investigative authorities involved in the search and seizure. The bottom line is this: the police can do anything, it’s better to make contact voluntarily and thus minimize the risk than to provoke and poke their noses at the law of people with a certain professional deformation, who a priori see the pawnshop as buying up stolen goods.

The worst scenario when investigating the delivery of illegally acquired property to a pawnshop could be a search with the removal of a safe, computers and an inspection of personal belongings. No one needs this, so cooperation with the authorities, even if in violation of some legal procedures, turns out to be more profitable. Challenging such actions does not lead to an economic effect; decisions are usually made in favor of the investigation. The main thing for a pawnshop is to minimize the risk; the issue of the legality of the seizure procedure is actually secondary, the speaker noted.

Head of the collateral insurance department of Prominstrakh LLC Natalya Fedotkina

said that every day their company receives about 50 requests for this particular insured event, reminded them of the payment procedure, and asked for contact, since it is often the lack of interaction and inertia of pawnshops that leads to claims and dissatisfaction with the insurer.

Andrey Zhirnykh, General Director of Lot-Zoloto LLC

, presented the development of a “merchandising bot” - an almost completely automated robot, a pawnshop of the future. The market launch is planned for 2022. We also discussed the use of cards for non-cash transfer of funds to the pledgor.

In general, the discussion of the prospects for non-cash payment is heard more and more loudly at conferences every year; the market recognizes the need for its introduction, but is not yet ready to give the lion’s share of its profits to banks in the form of acquiring fees. In addition, this will require complication and differentiation of existing tariffs and payment systems.

Artem Plekhanov, executive director of SRO “National Union of Pawnshops”

, reported that by all indications, pawnshops will still need self-regulatory organizations (SROs). The main goal that the regulator sets for them is the fight against unfair competition. The “National Union of Pawnshops” is ready to accept everyone as its members.

Pawnbroker ethics

The author would like to note that a huge part of the conference is the activity of the participants themselves. Their ability to build constructive dialogue is a big part of their success. So far, unfortunately, the market has not learned diplomacy and constructive dialogue. Why, human norms of mutual respect and good manners are often violated. At times, the degree of aggression went off scale, splashing out accumulated grievances and complaints on the regulator’s representatives, bypassing the “Man-System” distinction filter.

This was understandable and could have been forgiven at the initial stage of tightening control. But over the past 3 years, many have not realized that rudeness, sarcastic attacks and unaddressed attacks are only worsening the situation.

With this behavior, pawnbrokers exclude themselves from the dialogue - from participation in their destiny, often acting emotionally, impulsively and rudely, destroying the thin bridge of mutual understanding with representatives of the system. There are many professionals, real diplomats, many thanks to them for maintaining an objective conversation, step by step increasing professionalism, but even a few people who do not distinguish between a night stall or an anonymous chat and a conference of a professional community can ruin a painstakingly and carefully created interaction.

Anna KOTENKO was present and recorded.
The author's opinion may not coincide with the opinion of the editors.
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Summing up the pledges

2K 1 2 min.

After completing the clearing of the pawnshop market and the re-registration of its players, the Central Bank returned to the idea of an organized sale of collateral by pawnshops. The regulator requested information from market participants about the volume of sales of unclaimed items through online platforms. According to Kommersant’s interlocutors, this is the first stage of the transition to the creation of a single platform for the sale of collateral, which are now in fact being sold without real bidding. However, market participants are against it, not wanting to lose an additional source of income.

Photo: Igor Ivanko, Kommersant / buy photo

Information that the Central Bank has begun to survey pawnshops about “their implementation of the sale of unclaimed pledged items” was published by the Association for the Development of Pawnshops. A letter with the corresponding question was sent to all pawnshop associations. In it, the Central Bank asks to provide assistance and provide information about pawnshops that sell unclaimed pledged items through online auctions and trading platforms on the Internet.

Industry participants believe that this is the first stage of creating a single platform for the sale of collateral. For the first time, the idea of creating a single platform for selling collateral at open auctions under the Central Bank or on an independent platform was voiced a year ago. Such a platform was required due to the lack of a realistic assessment of collateral and their sale outside the auction, as required by law. As a result, the actual and formal prices for the sale of collateral diverged significantly (see “Kommersant” dated August 12, 2022). A little later, the idea of creating a single platform for the sale of unclaimed pawnshop pledges was supported by the Central Bank, the Ministry of Finance and the Federation Council. “A single platform is needed for openness and transparency of the market,” said Ilya Kochetkov, director of the microfinance market department of the Central Bank, in October. The Central Bank did not respond to Kommersant’s request.

Ivan Chebeskov, Director of the Financial Policy Department of the Ministry of Finance, October 28, 2022 The only question: why should such a platform be unified?

Market participants have a negative attitude towards the idea of a regulator. According to the head of the council of the National Association of Pawnshops, Alexei Lazutin, everyone in the industry is satisfied with the existing mechanism for the sale of unclaimed collateral: “If such an electronic platform appears, then the cost of its maintenance will obviously be passed on to the consumer. In addition, it is not very clear how the logistics issue will be resolved if a buyer from one region liked a collateral put up for sale in another region.”

The general director of Fianit-Lombard, Stanislav Boronin, emphasizes that the creation of the site may limit pawnshops’ access to working capital. “Now large pawn shops sell scrap jewelry to refineries and large wholesale companies on a 100 percent prepayment basis,” he explains. “Since contracts are concluded directly between enterprises, buyers are confident in the quality of the raw materials they will receive.” In the case of an electronic platform, it is unclear who will guarantee the quality of the scrap offered for sale. Buyers will not work on 100 percent prepayment, and pawnshops will lose the ability to quickly replenish working capital and, therefore, the ability to issue loans, notes Mr. Boronin.

The process of selling unclaimed collateral by large players is now transparent, and small players will not go to such a platform, Mr. Boronin assures. Nevertheless, in an informal conversation, market participants do not hide the fact that they are now selling collateral on their own websites and on online bulletin boards, such as Avito.

“At the same time, the sale is formally formalized as a sale at auction,” one of Kommersant’s interlocutors from among the pawnshop market participants told in an informal conversation. “Of course, pawnshops are not interested in providing information of this kind to the Central Bank. This is our income."

The creation of a centralized platform in the form of an auction will most likely lead to a decrease in the profitability of the pawnshop business, which will lead to the departure of many official pawnshops from this market, confirms Sergei Zemelkin, co-founder of Zalogoff.com, but will also increase the transparency of the segment. The Bank of Russia made a lot of efforts to whitewash the pawnshop market, up to the complete re-registration of its players, after which only 2.2 thousand organizations remained in the Central Bank register. Working with the open sale of unclaimed collateral, experts believe, is the next step towards establishing the rules of the game in the segment.

Ksenia Dementieva, Polina Trifonova