PAWNING PENSIONS

Hokitika Guardian, 1 March 1933, Page 8

PAWNING PENSIONS

CERTIFICATES AS PLEDGES

GROWING CUSTOM CONDEMNED

AUCKLAND- February 27

Evidence - that a” lucrative business is being carrried on in’Auckland' "in connection with the lending - of money to returned soldiers - on' the' security of their war - pension certificates lias c.-me 1 to - the notice of 1 the authorities.. “Pledging your war pension,” as the transaction is known in some quarters; is becoming an increasingly common practice - and the - tribute- extorted by the so-called “pension 1 pawn-brokers” by 1. way of accumulated! - interest amounts, in some cases, to es much rs 50 per cent and sometimes to double the amount borrowed.

A pensioner stated yesterday that by leaving, one’s war, pension certificate in the hands of one of these moneylenders, it was possible to obtain .an advancei for which varying rates of interest were charged. The

eng© was mentioned of a soldier who borrowed £1 and was required to pay back £1 10s when he collected his pension. • MONEYLENDER IN MOTOR-CAR, As pensions are paid to no other person than the pensioner, it is necessary for. .the soldier, to . have liis pledged certificate returned to him on “pension day,” go that he may, draw his allowance and pay back what he owes. A:n ex-sokliea', said:, “I have seen n moneylender sitting in his car outside the Pensions Office . waiting for his clients to-come out .after drawing their pensions. A nod from , him and a man goes-up to the. car and pays over £l, say of the £7 he has drawn. .That represents the., sum borrowed. That, represents the sum borrowed, together with interest. In, other cases, men are unable to repay, the money they have borrowed and' a ,re obliged to .hand, over their*, certificates again, to be put back into pawn.” One ex-soldier said the practice should be stopped. He said that while it was natural for a man in urgent need of money to obtain a loan when his security,...was .sound,' some iof tlie of borrowed' money were finding, it increasingly difficult to escape from - the clutches of the system .once they had sampled it. “It is. I a costly way of obtaining relief,” he • said, “and those who try it are liable I to find themselves in a financial riior-' I ass in very short, time.” >V PRACTICE DEEMED ILLEGAL. Officials of the Auckland Patriotic and' War Relief Association to whom the matte.V Was referred admitted knowldge of the practice and made it •clear that' it" did 1 not meet with' their-

approval. “The pledging of a pension certificate is illegal,” isaid one. ‘‘Each •i certificate, hears th.e words, ‘this certificate is absolutely inalienable, • whetei* by way of sale, .assignment, charge, oxecution, insolvency or otherwise howsoever.’ Anyone who therefore ‘ .transfers his certificate to another person does So at his. own- risk.” Some year.') ago the Patriotic Association was itself accustomed to advance sums against, war pension certi-’ ' ficates, but no interest was charged. The recipients were expectcl to pay ba.ek the sums borrowed when they received their next pension • allowance. AH-went, well until one man made a practice of re-borrowing is unis easjh month after the previous loans had been 1 paid back, with the result that lie was in perpetual indebtedness to the association’s funds. At the same time, complaints were made to the Minister of Defence that the practice was becoming too common. The association thendecided to refuse all’further requests for such assistance.-