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DLLR's Division of Occupational and Professional Licensing

 

Fact Sheet - Maryland Licensing of 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?

An individual who must be licensed is a person who:

  1. acquires commercially from the public or trades commercially with the public in secondhand precious metal objects;
     
  2. 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.
     
  3. for compensation arranges for the sale or delivery of a secondhand precious metal object on behalf of a person that does not hold a dealer's license under the law; or
     
  4. is a pawnbroker who also trades commercially with the public in secondhand precious metal objects.

What is a precious metal object?

  1. It is an object that is gold, silver, platinum, palladium, or iridium;
     
  2. 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
     
  3. 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:

  1. it reasonably appears to be a precious metal object; and
  2. 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.

What is the role of local police agencies in the regulation of secondhand precious metal object dealers?

Local police agencies (city, county, or state police) are authorized under the law to administer the Secondhand Precious Metal Object Dealers and 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.

What are the responsibilities of dealers under the law?

A license is not transferable and cannot be used to benefit another person.

A dealer cannot lend out a license for use by another person.

Display license.

Each licensee shall display the license conspicuously in the place of business of the licensee.

Calibrate and register scales; Display registration.

A licensed dealer shall register with the Department of Agriculture any scale that is used to weigh or measure items that are bought from, sold to, or commercially traded with the public, any secondhand precious metal object. Contact the Maryland Department of Agriculture at (410) 841-5790.

File Daily Transaction Reports.

Licensees are required to file daily transaction reports for secondhand precious metal objects a dealer acquires not later than the noon of the next business day.

Transactions must be filed electronically through an internet based system maintained by police agencies. Once a license is issued, dealers must obtain an account number from the local police agency in the jurisdiction where the dealer's fixed business address is located. 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.

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. Note: the holding period for dealers who are located in Prince Georges County is 30 days.

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 electronically filed with the police agency in the local jurisdiction where the fixed business address of the dealer is located.

Original Records of transactions must be maintained at the dealer's fixed business address.

Dealers must maintain original records (transaction sheets) at each fixed business address of the dealer.

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 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 my 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 2nd hand precious metal object transactions. An employee report form is available on the Board's website for download.

The Employee Report Form must be supplemented by a national and state criminal history records check of the employee. Employees can not 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 3-5 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:

  1. has been established to be stolen;
  2. the owner of the item, or the victim of the theft has positively identified the item;
  3. the owner of the item or the agent or designee of the owner has provided an affidavit of ownership;
  4. the stolen property report describes the item by:
      1. (i) a date;
      2. (ii) initials;
      3. (iii) an insurance record;
      4. (iv) a photograph;
      5. (v) a sales receipt;
      6. (vi) a serial number;
      7. (vii) specific damage;
      8. (viii) a statement of the facts that show that the item is one of a kind; or
      9. (ix) a unique engraving; and
  5. 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.

Grounds for denial of a license or approval of an employee.

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.

Business at fixed business address and other locations; notification to law enforcement

Licenses are issued to dealers for a fixed business address. Note: Check local zoning departments to determine whether the fixed business address meets county or city zoning requirements.

Dealers are permitted to conduct business at locations other than the primary locations under certain limited circumstances.

A licensed dealer may transact business at a location other the regular business address:

  • 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.

Electronic filing transaction reports that involve acquisitions at location other than the dealer fixed business address.

If a dealer acquires objects at an estate or judicial sale, or at the residence of an owner, the dealer is required to electronically file transaction reports in the jurisdiction where the transaction occurred. Original documentation must be kept at the fixed business address of the dealer.

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 Department recommends that dealers give police agencies 3 days notice of such acquisitions.

Advertising

All advertising that markets the dealer's business must include the dealer's name and license number. For this purpose the license number is the license Registration No. and, if applicable, the Suffix No.

Example: DLLR License Reg. No. 1234 -01.

This requirement applies to all forms of print, radio, television, and Internet advertising.

Regulation of pawnbrokers and other secondhand property businesses.

The provisions of the Secondhand Precious Metal Object Dealers and Pawnbrokers Act apply only to pawnbrokers whose businesses are located in jurisdictions who are not regulated by a city or county. Pawnbrokers and/or other secondhand vendors are regulated in Baltimore City and the following counties: Anne Arundel, Carroll, Harford, Howard, Montgomery, and Prince Georges.

Pawnbrokers 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.

DEPARTMENT OF LABOR, LICENSING AND REGULATION
Secondhand Precious Metal Object Dealers and Pawnbroker Program

500 North Calvert Street
Baltimore, MD 21202
(410) 230-6271
e-mail: spmg@dllr.state.md.us

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