Mobile Pawnbroker Bond: A Comprehensive Guide

This guide provides information for insurance agents to help their customers obtain a Mobile Pawnbroker bond.

At a Glance:

• Average Cost: $100 per year or $10 per month
• Bond Amount: $1,000
• Who Needs it: All pawnbrokers operating in Mobile, Alabama
• Purpose: To protect the public from financial harm if the pawnbroker violates the terms of their license
  
• Who Regulates Pawnbrokers in Mobile: The City of Mobile Revenue Department

Background

Mobile Code of Ordinances 34-50 requires all pawnbrokers operating in the city to obtain a license with the Revenue Department before conducting business. The Mobile City Council enacted the licensing requirement to ensure that pawnbrokers engage in ethical business practices. To provide financial security for the enforcement of the licensing law, pawnbrokers must purchase and maintain a $1,000 surety bond to be eligible for licensure.

What is the Purpose of the Mobile Pawnbroker Bond?

Mobile requires pawnbrokers to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that the public will be protected from financial harm if the broker fails to comply with the regulations set forth in Mobile Code of Ordinances 53-102. Specifically, the bond protects the public in the event the broker engages in any acts of fraud or breaches consumer contracts. In short, the bond is a type of insurance that protects the public if the pawnbroker violates the terms of their license.

How Can an Insurance Agent Obtain a Mobile Pawnbroker Surety Bond?

BondExchange makes obtaining a Mobile Pawnbroker bond easy. Simply log in to your account and use our keyword search to find the “Pawnbroker” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

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Is a Credit Check Required for the Mobile Pawnbroker Bond?

No, a credit check is not required for the Mobile Pawnbroker bond. Because the bond is considered relatively low risk, the same low rate is offered to all pawnbrokers in the city regardless of their credit history.

How Much Does the Mobile Pawnbroker Bond Cost?

The Mobile Pawnbroker bond costs just $100 per year or $10 per month.

Who is Required to Purchase the Mobile Pawnbroker Bond?

Mobile requires pawnbrokers to purchase a surety bond as a prerequisite to obtaining a business license. To paraphrase Mobile Code of Ordinances 53-101, a pawnbroker is a person who loans money on deposit of personal property or purchases goods for resale.

BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.

How Do Pawnbrokers Apply for a License in Mobile?

Pawnbrokers in Mobile must navigate several steps to secure a business license. Below are the general guidelines, but applicants should refer to the Revenue Department’s website for details on the process.

License Period: All Mobile Business Licenses expire on December 31st of each year and must be renewed before the expiration date.

Step 1 – Purchase a Surety Bond

Pawnbrokers in Mobile must purchase and maintain a $1,000 surety bond.

Step 2 – Complete an Application

All Mobile Business License applications should be submitted to the Revenue Department online here or by mail at the following address:

P.O. Box 3065
Mobile, Alabama 36652-3065

Applicants must complete the form in its entirety and submit the following items:

• • Federal Tax ID
  • State of Alabama Tax Number
  • $1,000 original surety bond
  • Copy of driver’s license
  • $138 licensing fee

How do Mobile Pawnbrokers Renew Their License?

To renew their license, auctioneers should submit an application to the Revenue Department online via their self-service portal. Pawnbrokers will receive a renewal reminder in mid December of each year. All Mobile Business Licenses expire on December 31st of each year and must be renewed before the expiration date.

What are the Insurance Requirements for Mobile Pawnbrokers?

Mobile does not require pawnbrokers to purchase any form of liability insurance. However, brokers may need to obtain insurance as a prerequisite to obtaining a state business license. Pawnbrokers must purchase and maintain a $1,000 surety bond.

How Do Mobile Pawnbrokers File Their Bonds?

Pawnbrokers should submit their completed bond forms, including the power of attorney, to the Revenue Department at the following address:

PO Box 3065
Mobile, AL 36652-3065

The surety bond requires signatures from both the surety company that issues the bond and from the broker. The surety company should include the following information on the bond form:

• Legal name and address of the entity/individual(s) buying the bond
• Surety company’s name and address
• Pawnbroker’s business address
• Start and end date of license term
• Date the bond is signed

What Can Mobile Pawnbrokers Do to Avoid Claims Against Their Bonds?

To avoid claims against their bonds, pawnbrokers in Mobile must ensure that they:

• Do not engage in any acts of fraud
• Do not breach contracts made with consumers
• Maintain an accurate record of all transactions

What Other Insurance Products Can Agents Offer Pawnbrokers in Mobile?

Mobile does not require pawnbrokers to purchase liability insurance. However, most reputable businesses will purchase this insurance anyway. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Mobile Pawnbroker Customers?

Mobile unfortunately does not provide a public database of active pawnbrokers in the city. We suggest contacting the Revenue Department for a list of licensed pawnbrokers. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.