Scott Pape has revealed how he found himself in a fiery showdown outside a pawnshop – all sparked by a simple question.
The Barefoot Investor said he ‘made a giant arse’ of himself in public while looking for a café for his morning coffee.
The financial guru said he walked past a pawnshop and decided to go inside.
‘Behind the counter sat a bloke in his mid-forties: bleached blonde hair, an NBA 2017 All-Stars tee that looked vacuum-sealed to his body, and a (possibly pawned) Shane Warne-style diamanté earring,’ Pape said in his weekly newsletter.
‘He didn’t look up. Just kept scrolling on his phone. So I coughed. Then I coughed a little harder.
‘Eventually, he raised his head, locked eyes with me, and let the silence stretch just long enough to make it awkward.’
The man said, ‘You look like you need some money,’ before Pape fired back, ‘What interest rates do you charge?’
Pape said the man slowly put down his phone before yelling at him to get out of his shop.
The Barefoot Investor Scott Pape revealed he had a verbal altercation with a pawnshop owner after he innocently questioned him about his store’s interest rates
‘He slowly put down his phone, eyeballing me – blokes with no money don’t ask about the interest rate first up.
‘Get out of my shop!’ he snarled. ‘And that’s when the trouble started.’
‘As I walked out, I noticed a poster of his interest rates and charges in the window. And for reasons I still don’t quite understand, I whipped out my phone, and did the most Karen thing I’ve ever done in my life: I stood on the sidewalk and took a photo of the poster.
‘Then I heard …”BEE BAW” Shane Warne was bowling out the doors with steam coming out of his blingy ears.’
The man yelled Mr Pape to ‘put your phone away, this is private property’ before lunging towards him in an attempt to grab the device.
‘I wrestled a bogan in the street,’ he said.
Pape described the incident as ‘not his finest moment’ as the pair of middle aged men grunted and swore at each other while standing in the street.
‘Yet later on I looked into it, and what I found made me even angrier.
Pape explained pawnshops in Australia use a loophole which allows the store to charge customers staggering interest rates
‘It turns out, pawnshops have been around since the 15th century. Back then, they were known as banks of pity, lending small sums to people doing it tough, in exchange for something small they owned.’
Pape said Aussies should not think of pawnshops as ‘sleazy Salvos’ but rather ‘loan shark shops’.
‘Here’s how it works: You give them your Nana’s necklace, they give you cash.
‘Pay them back (plus enough interest to buy your nana’s first home in 1974), and you get it back.
‘And if you don’t? They flog it in the front window.
‘Make no mistake: in the current cost-of-living crisis, these guys are not offering a lifeline, they’re stealing food off the table from kids,’ Pape wrote.
‘You see, these loans are structured to roll over again and again, which means some end up charging the equivalent of a staggering 480 per cent interest.
‘And it’s all perfectly legal, because pawnshops are largely exempt from the National Credit Act.’
Pape said the solution was for the government to hold pawnshops to account and close the loophole that allows them to charge an exorbitant amount of interest.
‘These loans are structured to roll over again and again, which means some end up charging the equivalent of a staggering 480 per cent the National Credit Act.’
A 2024 report, published by the University of Melbourne, found the cost of living crisis had pushed a greater number of middle-class Australians to the services of a pawnbroker.
The report, which surveyed 1,472 consumers, found 582 had used pawnbrokers, with some legally being charges rates equivalent to 420 per cent a year.
It also found 60 per cent of those who had turned to pawnbrokers had also used buy now, pay later or payday loan service in the past.
‘They take out new pawn loans and incur more fees in the hope they will somehow find a way to get their pawned items back,’ the report read.
How pawnshops work
1. Bringing in an item
You bring in something of value – like jewellery, electronics, tools, or musical instruments.
The pawnbroker assesses its value and offers you a cash loan, usually a percentage of the item’s resale value.
2. Loan terms
Loans usually last one to three months.
To reclaim your item, you repay the loan plus interest and fees.
Interest rates can be high – sometimes equivalent to annual percentage rates over 100 per cent.
3. What happens if you don’t repay
If you don’t repay the loan on time, the pawnbroker keeps your item and sells it.
There’s no impact on your credit rating, and you won’t be chased for the debt.
This article was originally published by a www.dailymail.co.uk . Read the Original article here. .