Fact Sheet - Secondhand Precious Metal Objects Dealers & Pawnbrokers
This fact sheet provides general guidance of the law. Please consult Article 12, Business Regulation Article, Annotated Code of Maryland for the precise wording of the provisions pertaining to dealer's responsibilities under the law.
- Who must be licensed as a secondhand precious metal object dealer?
- What is a precious metal object?
- What is the role of local police agencies in the regulation of secondhand precious metal object dealers?
- What are the responsibilities of dealers under the law?
- Grounds for denial of a license or approval of an employee
- Business at fixed business address and other locations; notification to law enforcement
- Regulation of pawnbrokers and other secondhand property businesses
An individual who must be licensed is a person who:
- Acquires commercially from the public or trades commercially with the public in secondhand precious metal objects;
- Is a retail jeweler as to transactions in which the retail jeweler acquires commercially from the public or trades commercially with the public in secondhand precious metal objects;
- Arranges for the sale or delivery of a secondhand precious metal objects (for compensation) on behalf of a person that does not hold a dealer's license under the law; or
- Is a pawnbroker who also trades commercially with the public in secondhand precious metal objects.
- It is an object that is gold, silver, platinum, palladium, or iridium;
- A precious or semiprecious stone or a pearl that is or appears to have been attached to or inlaid in gold, silver, platinum, palladium, or iridium; or
- An object that is composed of gold, silver, platinum, palladium, or iridium or any alloy of these metals if the market value of the metal in the object lies principally in its precious metal component, or at least 25% of the weight of the object is precious metal.
For the purposes of the administration of this law, there is a presumption that an object is a precious metal object if:
- It reasonably appears to be a precious metal object; and
- It was received by a dealer in the course of business or is found in the place of business or storage facility of a dealer.
Local police agencies (city, county, or state police) are authorized under the law to administer the Secondhand Precious Metal Object Dealers & Pawnbrokers Act.
Local police departments have the authority to inspect records maintained by dealers or precious metal objects as a part of a stolen property investigation or an investigation of a violation of the laws. Local police departments report violations of the law to the Department for possible administrative action against a dealer.
Each licensee shall display the license conspicuously in the place of business of the licensee.
Any advertisement through internet, print, radio, television, or any audiovisual media which promotes the dealer's business to acquire secondhand precious metal objects from the public must contain the dealer's name and Maryland Maryland Department of Labor license number.
File Daily Transaction Reports
Licensees are required to file daily transaction reports for secondhand precious metal objects a dealer acquires no later than the next business day. In Howard County, dealers are required to file transaction reports by electronic means.
The Department strongly recommends that dealers cooperate with local law enforcement agencies in their efforts to establish electronic transmission programs for daily transaction reports. Dealers' participation in the electronic transmittal of daily transaction reports support pawn units in their efforts to more efficiently conduct stolen property investigations and return stolen property to its rightful owners.
Doing so also protects dealers' interests as it is the most reliable, secure, and timely way to file transaction reports in compliance with Maryland law. Dealers should contact their local pawn unit to find out how to integrate electronic transmission of daily transactions reports with minimal impact on their business operations.
Maintain custody of a secondhand precious metal object for at least 18 days from the date of the submission of the transaction record of the item to the local law enforcement agency.
All secondhand precious metal object dealers must maintain possession of an item acquired for 18 days. This 18-day holding period begins on the date the daily transaction report is transmitted to the police.
Transaction reports must be filed with the police agency in the local jurisdiction where the fixed business address or approved alternative storage facility is located.
Cooperate with stolen property investigations
The law requires each licensee to cooperate with stolen property investigations. In an application for a license or license renewal, he or she agrees to allow a municipal, county, or a state police officer or agent acting in the course of a stolen property investigation or an investigation of a violation of this title to inspect and photograph all precious metal objects and records at any business or storage locations.
Report employees involved with secondhand precious metals object or pawn transaction
A dealer who employs an individual to conduct secondhand precious metal object or pawn transactions must file an employee report form for that person to the Department. A dealer does not have to report employees who do not engage in secondhand hand precious metal object transactions. An employee report form is available on the Department’s website to download.
The Employee Report Form must be supplemented by a national and state criminal history records check of the employee. Employees cannot participate in secondhand precious metals object transactions until the employee report form is filed with the Department and the criminal history records check for the employee has been reviewed and approved. The approval process usually takes three to five business days following the submission of application for the criminal history records check.
Release stolen property to primary law enforcement agencies
A dealer is required to surrender items to the primary law enforcement agency if the item:
- Has been established to be stolen;
- The owner of the item or the victim of the theft has positively identified the item;
- The owner of the item or the agent or designee of the owner has provided an affidavit of ownership;
- The stolen property report describes the item by:
- a date;
- an insurance record;
- a photograph;
- a sales receipt;
- a serial number;
- specific damage;
- a statement of the facts that show that the item is one of a kind; or
- a unique engraving; and
- The police unit provides to the dealer a receipt that describes the item and that notifies the dealer or pawnbroker of the dealer's right to file an application for a statement of charges against the individual who sold the item to the dealer or pawnbroker or other alleged thief for theft.
The Department may deny a license to an applicant or deny approval of an employee to conduct transactions if the criminal history records check indicates that the applicant or employee has been convicted of a felony or a misdemeanor conviction for an offense that is directly related to the individual's fitness to be involved in a pawn transaction or the sale or acquisition of secondhand precious metals.
Licenses are issued to dealers for a fixed business address. However, dealers are permitted to conduct business at locations other than the primary locations under certain circumstances.
A licensed dealer may transact business at a location other than the regular business address to:
- Make purchases at an estate and judicial sale; and
- Transact business at the residence of the owner of a precious metal object or a place where the owner keeps a precious metal object upon the request of the owner.
Notification and reporting requirements
In order to transact business outside of the regular business address, a dealer must notify police agencies in both the jurisdiction at the location where the license is issued and location where the items are being acquired or sold.
The provisions of the Secondhand Precious Metal Object Dealers & Pawnbrokers Act apply only to pawnbrokers whose businesses are located in jurisdictions who are not regulated by a city or county.
Currently pawnbrokers and/or other secondhand vendors are regulated in the following jurisdictions:
- Anne Arundel County
- Baltimore City
- Carroll County
- Harford County
- Howard County
- Montgomery County
- Prince Georges County
Individuals licensed as a secondhand precious metal object dealer with the Department must also obtain a local pawnbroker license in the counties listed above.
An individual who has been issued a state secondhand precious metal object dealers and pawnbroker license need not obtain a separate pawnbroker license in the counties not listed above.
A "pawnbroker" is an individual who lends money at an interest rate and holds some of the borrower's personal goods as collateral to be sold to the public (in a pawn shop) in the event of default or one who lends money on the security of personal property pledged in his keeping.