Friday, 19th December 2014

How Safe is Your Safe?

Posted on 09. Jan, 2012 by in Winter 2011

How Safe is Your Safe?


How do you spell GOLD? (Is it AU or AG?)

We joke in the pawnshop industry that the new spelling of G-O-L-D is S-I-L-V-E-R because many of our customers can’t afford the gold jewelry they would like to wear.

But more to the point, there is another item in the pawn and jewelry business that also has a new spelling – TL-30. It is now spelled TRTL-30X6.

In today’s world of high-tech crime, the old, faithful TL-30 just doesn’t stand up.

Here is an example…

Eight Arrested In Alleged Florida Jewelry Theft Ring

By Lindsey Wojcik, Editorial Assistant

Posted on June 16, 2011

Eight south Florida residents have been arrested and charged with operating a theft ring that broke into jewelry stores by cutting holes in their roofs, the Florida Department of Law Enforcement and the Florida Attorney General announced June 15.

The suspects were charged with racketeering and conspiracy to commit racketeering. Three of the suspects were charged with burglary of a structure with damage in excess of $1,000. Two were charged with grand theft over $100,000.

The gang is suspected of operating an organized burglary ring with multiple crews who would cut holes in the roofs of jewelry stores and pawn shops, disable alarms and surveillance systems, and then use torches to access the safe.

Authorities estimate the value of the jewelry stolen at more than $6 million. The theft ring, based in Miami-Dade County, Fla., targeted stores in Florida, North Carolina, Tennessee, Virginia, West Virginia, and Connecticut.

Multiple law enforcement agencies worked for nearly two years to arrest the eight individuals.

“This group moved fast and hit targets in multiple jurisdictions, but they underestimated the level of sophistication and collaboration among our law enforcement agencies,” Gerald Bailey of Florida Department of Law Enforcement said in a statement.

A ninth suspect has not been apprehended but authorities have active warrants for his arrest.

The case is ongoing and will be prosecuted by the Attorney General of Florida.

In May, 19 Michigan residents were arrested in connection to a nationwide grab-and-run jewelry theft ring.

Reprinted from

I receive Crime Alerts by email from Jeweler’s Security Alliance on a regular basis. These three recent events are right on target with this article.

Jeweler’s Security Alliance Crime Alert, 09/28/11

Cumming, GA – September 25, 2011
Police report that between 3:00 a.m. on 9/25 and 8:30 a.m. on 9/26 burglars bypassed a security system at a retail jewelry store, cut their way through a concrete wall, and entered the jewelry store from an empty building next door. The burglars breached a Class 1 vault and took a large quantity of jewelry and scrap gold. The burglars also took merchandise from the showcases and took the cash register. The burglary was discovered on Monday morning by workers doing construction in the space adjacent to the jewelry store when they found the hole in the wall broken between the two premises. It is reported that two suspects have been subsequently arrested and cash was recovered.

RECOMMENDATION: An empty storefront adjacent to a jewelry store presents a special high risk and is a magnet for burglars who will break in through the unprotected common wall. Any notification of an alarm signal or “line trouble” requires immediate jeweler and police response, and inspection of the inside of the jewelry store by the police.

Jeweler’s Security Alliance Crime Alert, 10/21/11

Tampa, FL – October 17, 2011
Burglars cut holes in the roof of a jewelry store. It appeared that the first hole was cut to find out where the suspects were in relation to the rooms below them. Another hole was cut directly over a closet which contained the alarm and video system which was entered and the system disabled. The suspects used a torch and cutting tools to enter the safe. The suspects removed watches, diamonds, jewelry and gold from the safe. The burglars began work on two other safes in an adjacent office but did not enter them.

RECOMMENDATION: Despite some excellent recent arrests of rooftop burglars, this method of entering a jewelry store remains a major risk. Jewelers must have alarm protection for their entire premises, including entry from the roof or through the wall from adjacent premises, and must have line security which will send a signal if their alarm system is tampered with. Today’s burglars have no trouble entering safes with the Underwriters Laboratory rating of TL-15 or TL-30, but burglars virtually never have the time, the tools or the skill to enter high-security safes with a TRTL 30×6 rating.

Jeweler’s Security Alliance Crime Alert, 10/28/11

Philadelphia, PA – October 26, 2011
Burglars went across barbed wire on the roof of a shopping plaza and got in through a metal hatch to gain entry to the building and avoid setting off alarms. They lowered themselves into the building, broke through several walls, including that of a restaurant, and gained access to a retail jewelry store. They cut through steel bars to get inside the cage containing the store’s safe, and then used a drill and other tools to cut through the steel and concrete walls of the safe. They cleaned out the safe and escaped.

RECOMMENDATION: Entry from rooftops and through the walls of adjoining premises is a common way for burglars to get into jewelry stores. Jewelers must have three things to prevent burglars from getting into their safes:
1. An alarm system which will provide coverage of their entire premises, including entry from the roof, side walls, bathroom and all other areas, not just their doors and windows.
2. Line security which will cause an alarm signal to be sent if their alarm is tampered with or defeated.
3. An adequate safe. Today’s burglars can easily enter safes with Underwriters Laboratory ratings of TL-15 or TL-30. A higher rated safe is needed to provide more security and peace of mind for the jeweler.

Finally, jewelers must respond to all calls from their alarm company, and when police respond to an alarm signal and inspect the premises, they must not fail to see if the burglars are on the roof or have already entered the premises from the roof or adjoining premises.

Here is a third example from NorthJersey.Com

Police investigating $3M jewelry heist in Paramus

Tuesday, February 9, 2010

A group of “professional” thieves stole $3 million in diamonds, jewelry and watches from a Route 4 diamond store this weekend in a heist eerily similar to a break-in that occurred nearly two years ago on the same stretch of highway.

“It was well planned … very professional,” Police Chief Richard J. Cary said. “Several people had to be involved.”

The burglars didn’t even have to enter the store, Elite Diamond Exchange, to steal the 2,000 pound safe containing the diamonds, Cary said. They simply cut a hole in the wall of an adjacent LensCrafters store and wheeled the safe away with a hand truck without having to navigate the diamond store’s alarm system, Cary said.

“Video shows the safe there and then gone,” Cary said.

The theft is markedly similar to a burglary that occurred the night of March 18, 2008 at the Jewelers Exchange on Route 4 west. In that case, burglars broke through a vacant store, cut into a safe and stole nearly $1 million in diamonds, jewelry and watches in a case that remains unsolved.

Now is your safe worth its weight in gold? At today’s prices, the answer is probably no. If this were the case, people might try to steal your safe, or maybe just a piece of it.

Our goal is to protect our customer’s personal property as well as our own, hard-earned cash and inventory. How we each achieve that goal may be entirely different.

I don’t know how many hours I have spent watching YouTube videos or searching websites for lock picking and safe opening tips and methods, but there is a lot of information about breaking into businesses and safes available online.

First, the average safe is really not that hard to break into. All you need is the right tools, enough time and the ability to avoid detection. Second, all safes are rated in hours. When you buy a better safe, you are actually buying more time. You are buying more time for detection to occur.

Early safes were the result of technological advancements over time. Even though we’ve come a long way from wooden strong boxes to the first real iron safes, these safes still had their vulnerabilities and were often manufactured with smaller safes or money chests, inside. Why was there a chest inside? Because the large iron or steel safe was not strong enough to secure the true valuables it was designed to protect. This concept (a safe within a safe) is still in existence today with both safes and vaults.

It is not uncommon to see a few safes inside of a walk-in vault either. My daughter who works for a bank says they have a safe inside the vault for storing money. Many employees have access to the vault (once the big, outer door is open), but only a limited number can open the safe inside the vault.

If you do have an updated safe or vault, a burglar may not choose you as a possible target. While the possible reward may be there, the time and effort of breaching a Class 3 vault or a TXTL-60X6 safe (better yet, a modular vault / vault room with safes inside), may not be worth the effort except to the best in the industry. And, while there are those out there who may be able to perfect the crime, the odds are very small that you would wind up being their potential target.

I hate to say it, but, in this case, just like banks, you’re more likely to be a daytime job; a robbery which is best perpetrated right after opening or just before closing. But, this is intended to be a burglary article, not a robbery article.

On the other hand, if you do have a successful pawnshop, jewelry store or gold buying operation, and, you are operating in a typical American city or suburb, in a strip center or small stand-alone building, you may be a more likely candidate.

It is not my intent to give away trade secrets and making everyone an expert burglar or safecracker? Everything I have written about and more can be easily found on the Internet and in private trade schools (prisons) around the country. The goal here is for education and preventative measures you should be taking.

Although I’m not looking at breaking into a business, I am interested in keeping others out. And sometimes, we have to imagine the ways in which a break-in could occur in order to try to prevent it from happening. Unfortunately, technology has gotten ahead of many in the business. I still see pawnbrokers and jewelers using 100 year old rolling record safes that only have a thin sheet of armor plate over concrete. “It’ll never happen to me…”

I’m not a safe expert. I’m an end-user. I write articles and a Tips column that express useful information to the pawnbroking industry. When I need help, I ask an expert. Whether I chose to follow his advice may be an economic business decision or a mistake on my part. Only time will tell.

I have been collecting data for this article for a while. I’m not writing a thesis or dissertation, but I think I want to do more than say “just buy more insurance and hope you don’t need it.”

Will it change anyone’s mind? Who knows. What I have found in the past, with reference to safes, has been the price of the safe was usually the determining factor. I’m sure that you have had similar experiences.

You are also going to be reading some repetitive information from both myself and from industry experts. Now, if everyone is saying the same thing, maybe one of us is right.

So, just how safe is your safe? Is it made of 21st century burglary resistant composite materials? Does it have intricate locking and relocking devices? Maybe it uses digital time locks to prevent unauthorized entry.

The first thing to determine is if your safe is the burglar’s primary target, this is not going to be your ordinary burglary. The burglars targeting safes are going to be well trained and experienced in many different modes of breaking and entering. They will know locks, alarms, the use of the proper tools, your store layout and usually have an idea of the contents of your safe. They will know what kind of safe you have and exactly where it is located. Yes, they might have some inside knowledge of your operation, too.

You were not chosen at random, but were actually specifically targeted. A lot of time, effort and planning have gone into this brazen attack on your premises. You should feel honored. Or, maybe not. Perhaps you have been targeted because of your lack of concern over security issues.

Our business model as pawnbrokers presents us with a number of idiosyncrasies that are not applicable in other fields.

Suppose I was a really smart burglar who was going to make an attempt to get into your safe or vault, I would already know your store layout (especially where the safes were located and what they were made of). That is a given. No real safe burglar goes in blind. I may not even necessarily need to bring my tools with me either. They would already be there. Yes, I would have someone pawn everything I needed and attach a locating device to it so I could find it at night, or, over the weekend. Just think about this the next time you take in high-end cutting tools with diamond blades or a big plasma torch with full tank of fuel (fuels or inert gases may vary). Or, maybe I’ll just bring special cutting blades and use the tools you have on the shelves for sale.

Illegal entry should be discrete – that is why rooftop entry is so popular. Often, if the owner or police show because of an alarm, shake the door, look around and if nothing seems out of order, they leave. WRONG!

Jeweler’s Mutual Insurance reports in a news release titled Burglaries where alarms and safes are compromised: More sophisticated burglaries involve attempts to disable alarms and enter safes. Sometimes burglars gain access to a jewelry store by cutting a hole in the roof or in a common wall shared with an adjacent business. Guards or police officers responding to a burglar alarm signal may not be able to detect exterior signs of forced entry and may leave without further investigation. Other times, burglars may trigger an alarm signal and wait to see who responds and how long it takes.

A professional burglar may make his attempt to gain entry to your business in steps. First, gain entry into an adjacent, unalarmed business. Next, enter into your business from above the ceiling (roof) and prepare to deactivate the alarm system. Your alarm system control box is not located above the drop ceiling is it? Even if it is not, chances are all the wires feed up the wall into the ceiling.

Or maybe the burglars attempt to access your safe, possibly from the rear, will be initiated from inside the vacant store room in order to avoid your alarm system altogether.


Whether your safe is on display for the public to see or hidden in back is often a matter of your physical layout or convenience.

I have visited many pawnshops where multiple large safes are located right behind the pawn counter and the customers may look into them and see all the envelopes full of jewelry. Is this supposed to make your customers feel their jewelry is safe?

However, it may not be a wise idea to have your safes exposed to everyone who walks in, especially if they are inadequate for protecting your loans or merchandise. This gives the potential burglar first-hand knowledge of what he is up against and the exact location of your safes. In essence, you are doing the burglar’s homework. He now knows exactly what you have and where it is located.

The logic here is the safe is safer because it is in plain sight. Anyone passing by the pawnshop at night can see the safe, including the police (and the bad guys). The visibility from the street adds an additional layer of protection.

No matter how hard you make it, people will always know where your safe is located.

Delivery people, maintenance people, inspectors, repairmen, pest control, HVAC, remodelers, all notice things when they are in your pawnshop and you have no control over who their friends are or whom they share what they saw.

That pawnshop safe is over-flowing with jewelry loans.

Can this information be shared? You bet! Digital cameras are everywhere. Everyone has one. Even cellular phones are capable of taking snapshots or recording full length videos. They even sell surveillance equipped glasses for discrete recording.

How many of us still have the same safe our fathers and grandfathers may have used when they started the business fifty or one-hundred years ago?

Well, I’ll be … you’ve got safes just like the ones granddaddy used to break in to…

I didn’t think anyone used those old things anymore. This will be easy.

 In my opinion, safes located on an outside wall present the most risk. And, the risk will quadruple if the outside wall was next to a vacant business. Vacant space could be adjacent, above or below your business. If a new tenant moves in, make sure they are legitimate. Landlords often overlook things, like legitimacy, when a store room has been sitting empty for a while.

If you must have your safes on an exterior wall, install alarmed glass panels on rear and sides of the safe to help prevent penetration from an exterior wall and include shock and vibration sensors.

 I’m too old and fat to come through roofs anymore. I now scout out safes located on a wall next to an adjacent, empty or low security store room. I’m not even going to enter your business. Just kick through the drywall in the common wall with your neighbor and then cut into your safe from the rear. It’s the easiest way for me to get access to your treasures. Your alarm system will never know I was there.

Ideally, you should have a large vault or vault room with safes inside. But this is not always practical or affordable.

Many of us are thrifty by nature and for cause. We tend to buy local because we can see the product and save money on shipping. At any given time I can find a number of adequate safes listed on eBay. Sometimes, a dollar saved is not really a savings.

If your safes are old and outdated, you can find used safes available everywhere. Hey, the economy isn’t that great. Jewelry stores and other businesses are going out of business every day. Check with your safe specialist, who may have taken a trade-in or possibly acquired a used safe from an expired lease or repossession.

Your safe or vault is undoubtedly your final defense against property loss. And, like most things in life, the bigger (stronger), the better. Again, like most things in life, the more protective the safe, the higher the price tag.

I know, I’ve said this before – it bears repeating. Many pawnbrokers are still using the same safe that their grandfathers may have used. I have seen pawnshops where safes were lined up behind the pawn counter against the wall. These are often what I am fond of calling old “rolling record safes.” Large, concrete-filled, single or double-door safes on four wheels whose only real protection is a sheet of armor plate welded to all six sides. This type of safe is easily peeled open with common hand tools.

While the iron or steel box safe had been the industry standard for over one hundred years, the first real improvement in safe design came in 1962 when Chubb introduced a new production method incorporating TDR (Torch and Drilling Resistance).

This concept was the creation of a seamless bell casting which formed the five-sided protective walls of the safe. Being cast from a proprietary material which deterred cutting and drilling, the safe seemed to be resistant to all the common tools of the day. The door was made of the same material as the safe body.

Safes were now being filled with newly developed, super hard security concrete fillers as an additional effective barrier against forced penetration. Concretes with fiber fillers and other additives, which were commonly vibrated onto reinforcements securely affixed inside the safe’s shell casting, also hindered attacks by requiring heavier breaching tools, offering longer resistance and often the need to create more noise and smoke, not to mention operator fatigue.

This is where this article really begins – with your safes.

Safecracking 101

Once the alarm system has been defeated, or, in many instances, where the attack is mounted from the rear of the safe and no real entry is made into the target property, it is on to step #2 – the safe.

Safecracking is any attempt to open a safe with or without the use of the proper combination or key and generally without the safe owner’s consent. While this effort may take two forms, non-destructive and destructive, the latter tends to be most popular.

First and foremost, one must understand that it is not the lock itself that keeps the safe door closed. These locks are merely the ‘key’ to releasing an elaborate mechanical bolt network that secures the safe door from all sides. The hinges on the safe door are not designed to really provide any protection, but merely to keep the door stable and in place.

How to break into a safe is usually a question that only thieves and locksmiths ponder. But anyone owning a business with a safe should have the same thoughts. The more knowledge you have, the more you can protect yourself and your property.

To start, we will talk about your safe’s location. Its location should be one of your first concerns.

Logically, safe placement against an outside wall may be the most efficient use of space in your building. And you may have fitted your safe with time locks and door alarm contacts. However, depending upon your location’s physical attributes, you may be offering the burglars an opportunity to break into your safe without actually setting foot in your store.

If professional burglars are able to gain access to your store all night or weekend because they have compromised your alarm, they could still gain entry to your TRTL-60X6 safe with the proper equipment. The addition of shock or vibration sensors to your safe will be useless if your alarm system is not operational.

A lot of newer safes have security measures in place to prevent some safecracking techniques popular in the past. However, I know that many pawnbrokers are still relying upon very old and outdated safes and combination locks for security of their goods. So, this data is still applicable.

Electronic time delay locks will keep someone from opening the safe in the usual conventional way – by means of the safe door. But our focus here is more unconventional entries. In this case the person trying to gain entry may be more inclined to use the back or side of the safe for entry and avoid the door altogether.

Non-Destructive Safecracking Methods

Non-destructive safecracking is based upon overcoming the combination lock and/or key lock by manipulation. Although not necessarily the easiest method of entry, once the locks have been manipulated with the proper sequence of numbers, or the key lock picked, the door will open without any further resistance – the easiest way to gain entry (by opening the safe door, not manipulating the locks).

Almost all safes are shipped from their manufacturer with a preset try-out combination with the intent for the purchaser to pay his local safe mechanic to change the combination. This is not always the case. Many safe owners continue to use the try-out combination. These try-out combinations are an industry standard and known to all safe vendors, locksmiths and safecrackers (50 – 25 – 50 and 100 – 50 – 100, used to be popular). Don’t buy an expensive new safe and then be cheap, have the combination changed.

This shouldn’t have to be said, but I going to say it anyway – don’t use numbers like your birthdate, a relative’s birthday or something that a thief could easily deduce as being your combination. This goes along with not having the combination written down near the safe or lying around your home.

One method of lock manipulation used by safe mechanics (these are the good guys who work on your safe) and possibly the best safecrackers was devised by Harry C. Miller in 1940. It allows for opening a locked safe without drilling or defacing the safe. As you may have guessed, it involves the use of a stethoscope or other electronic listening device. And you thought that was just the way it was done on TV or in the movies.

Miller’s scientific system is a three-step process which manipulates the lock into exposing its combination.

1)    Determine the contact points

2)    Discover the number of wheels

3)    Graph your results

While not as fast as is seen on TV or in the movies, in reality, it is a system that has merit. Sorry, I’m not going to reveal the entire system.

As technology advances, more and more anti-manipulative locks are being marketed. These locks may use wheels made of softer or lightweight materials such as nylon or polycarbonates which may be just as hard and not a telltale as metal wheels.


Auto-dialers, such as the Intralock ITL 2000 Safe Dialer, are computer controlled devices that test the entire set of possible combinations. They mount to the face of the safe and electronically start to dial away. Although this method is very feasible, it may take a considerable amount of time before the safe’s combination lock is breached.

Intralock advertises their ITL 2000 Safe Dialer as having these features:

Quick and Easy Set up. Only 15 minutes needed

No supervision required. Once in place, it runs until safe lock opens.

Average opening time is 6 hours.

Non-invasive. Safes remain intact and costly repairs are avoided

4 dialing speeds for loose wheels

Wheels can be dialed:

  • to every possible safe lock combination
  • through a specific range of numbers

Dialer mount attached by strong rare earth magnets

Reversible jaws grip most dials

While Intralock only sells its Safe Dialer to licensed, bonded and certified security professionals and to law enforcement, things have a way of getting into the hands of the wrong element.


Vibration is a method that was used in the past and may still be applicable on some older combination locks. This method applies a vibrating mechanism to the combination dial and allows the wheel gates to slowly rotate to the proper “unlock” position. This occurred because of the weight difference between the wheel and the gate. Modern combination locks alleviate this method by designing wheels that are evenly weighed.


Radiological attack uses a penetrating radiation (beta ray, gamma ray, neutron beam, ultrasound, and x-ray) from a portable device to discretely view the inner workings of a combination lock. This aligns the wheels in the correct position to engage the lever arm and open the safe door.  Some combination lock wheels are now made of low density materials to prevent this type of attack. UL Group 1R type combination locks use acetyl resin or other non-metallic wheels to resist x-ray imaging.

Ultra-Violet and Thermal Imaging

Ultra-violet and thermal imaging, which will show UV residue or heat, may be used to indicate which keys or buttons have been used on a safe with an electronic based combination. While this method may not show the combination, it will narrow down the possibilities by revealing the numbers used most recently.

This method may also be used to detect the numbers entered into your alarms system’s keypad. Can your safe or alarm’s digital keypad be seen or accessed by others? Can I watch you unlock or enter your combination or codes through a telescope or high-powered camcorder’s zoom lens?


Typically, an item the combination owner will come in contact with is coated with a ultra-violet ink. When the safe combination is initiated, the ink is transferred to the corresponding keys on the electronic keypad. A simple black light can reveal which keys were used.

Thermal Imaging

Thermal imaging is a specialized technology on its own. But when used in conjunction with electronic access controls (electronic safe locks), it can be a quite effective tool.

Technically, the potential safecracker would need to deploy an uncooled micro bolometer thermal imaging (far infrared) camera within five to ten minutes after an electronic key code was entered.

The heat transferred from human contact, even for a split second to the keys, dissipates very slowly making a reading of the contact possible after the combination owner has left. The sequence in which the keys were depressed would also be evident by a difference in the color of the keys as they cool, and are visualized or recorded by the thermal image. This image may even be read from a distance of one to ten meters allowing the safecracker to maintain a low profile. Handheld portable thermal imaging devices and cameras are made by companies like Flir and Fluke and are available to the public – and yes, you can even buy them on

In theory, this all works just fine and I’m sure has been used in a movie plot or two. In reality, usually only inside personnel are able to get that close to a safe soon after it has been opened. Not that an insider might not want unauthorized access or the opportunity to make a few bucks on the side by selling the combination.

There are simple ways to help overcome this method of attack. Use an inanimate object to depress the keys of the electronic combination lock. Hold your hand over the keypad either before or after (or both) to warm all the keys. Use a number twice to make the actual combination harder to detect. Scrambling keypads are also available for high security instances.

Electronic locks are becoming more popular in safes these days and often allow for each individual with access to have their own access code, which then allows for tracking (for security purposes) to determine who was the last one who may have opened a safe. Sophisticated models have a built-in date and time stamps that may record up to the last 200 users and combination entries.

Advances in technology are not usually far behind innovation. J.D. Hamilton of the Mas-Hamilton Group, innovators in electronic locks, have developed a safecracking software that interfaces with electronic locks and will run a sequences of numbers until it finds the proper combination to open an electronic lock. There are reported to be a number of clones of this software on the market.

In these types of scenarios, I see the keypad to your alarm system most susceptible to these threats. Gaining access and deactivating the alarm is step one.

Does your safe or alarm’s electronic keypad have white keys? If so, keep them clean. Dirt from your fingers will eventually build up on the keys and make it easy for anyone to observe which keys are regularly depressed and which are not. 

A Short History of Combination Locks

Linus Yale Sr. (you’re probably familiar with the name) invented a pin-tumbler lock in 1848. His son, Linus Yale Jr., a mechanical engineer and also a lock manufacturer, improved upon his father’s lock using a smaller, flat key with serrated edges and patented a cylinder pin-tumbler lock in 1861, which became the basis for modern pin-tumbler locks.

He designed and patented the Yale Infallible Bank Lock in 1851 and his factory in Massachusetts became famous for its innovative bank locks, the Yale Magic Bank Lock and the Yale Double Treasury Bank Lock in 1861.

Yale Jr. is also credited with inventing the modern combination lock in 1862. Always trying to improve upon his past work, Yale realized that the key holes in conventional locks made them susceptible to thieves who could use picks (yes, even back then they picked locks the old-fashion way), explosives (gun powder being the most popular) and heat, which were all used to defeat locks.

Such techniques and efforts to defeat keyed locks convinced Yale Jr. to turn his creative efforts to the use of a permanent dial and shaft design – today’s combination lock.

This concept was not totally original. The majority of combination locks are based off of the Pin Tumbler or Ward designs. Typically, multiple numbers or letters will form a combination to open the lock. The idea for such a design was originally recorded by Gerolamo Cardano of Italy in the 1500s.

In 1862, Yale Jr. introduced the Monitor Bank Lock which soon revolutionized the banking industry with the changeover from traditional keyed locks to combination locks on bank safes.

In 1873, James Sargent (another name still important in the lock industry, Sargent and Sargent & Greenleaf, a Stanley Security Solutions company) patented a time lock mechanism that became the prototype of those being used in contemporary bank vaults. The time mechanism was concealed, utilizing as many as three clocks to cover a total of three days. The bolt was released, for the time the clocks were set to, and the safe then opened to the correct combination.

Joseph Loch of Germany is credited with making improvements to the combination lock in 1878 for Tiffany’s in New York City. These improvements focused on changes in the tumbler design to increase security of the lock mechanism and to further restrict compromise.


How to Choose a Combination

7. Combination Locks

(2) Safeguarding Combinations.

(a) Selecting a Combination. When selecting combination numbers avoid multiples of 5, ascending or descending numbers, simple arithmetical series, and personal data such as birth dates and Social Security Numbers. Use numbers that are widely separated. This can be achieved by dividing the dial into three parts and using a number from each third as one of the high-low-high or low-high-low sequences. The same combination should not be used for more than one container in the same office. Carefully follow any manufacturers’ instructions in installing combination numbers.

(b) Protecting Combinations.

• Combinations should be known only by those persons whose official duties require access. The written combination should be protected at the highest classification level of material in the container or be protected in a manner commensurate with the value of the protected material.

• Combinations should be memorized. They must not be carried in wallets or concealed on persons or written on calendars, desk pads, etc.

• When opening any kind of combination lock, be sure that no unauthorized person can learn the combination by observing the sequence of numbers being entered or dialed. It may be necessary to position your body so as to block the dial from the view of anyone standing nearby.

Reprinted from; U.S. Geological Survey Manual, Physical Security Handbook 440-2-H, Chapter 7, Safes and Storage Equipment, 7. Combination Locks

Ric Blum is a vice president of Ohio Loan Co. in Dayton, Ohio. He has served as president of the Ohio Pawnbrokers Association, secretary/treasurer of the National Pawnbrokers Association and as a member of the board of directors and the board of governors of the National Pawnbrokers Association. Please feel free to e-mail your comments  to or mail them to Ric Blum, Ohio Loan Co., 3028 Salem Ave., Dayton, OH 45406.

Pawnbrokers Act to Protect Gold Assets

Posted on 09. Jan, 2012 by in Winter 2011

Pawnbrokers Act to Protect Gold Assets


All pawnbrokers have ever asked for was a fair and level playing field.

For hundreds of years we’ve been treated like second class businesses. A pawnbroker is usually required to record personal identification, and maybe take pictures and collect fingerprints of any person pawning or selling any item. This is mandated by state and local laws. We fill out police reports; we hold all pawns and purchases for a certain number of days. And on and on.

We can’t buy a couple of ounces of gold today from a complete stranger (no questions asked) and sell it before the market closes tonight.

But what about the guy who rents an empty store front, a hotel room, a vacant mall store room, or sets up a kiosk in a mall? He puts out a crude, hand-painted tent sign saying “WE BUY GOLD” and can do as he pleases with little or no regard for the state and local laws others need to abide by. It seems as though the public turns its head the other way when it comes to precious metal buyers.

We’re not even going to touch on reporting the buying of precious metals (or watches and other jewels) to local or state law enforcement, or the reporting of anything to local, state or federal taxing authorities.

Not to mention the fact that pawnbrokers need to use Legal for Trade scales, certified by a state or local government agency, when buying from the public. The corner gold buyer does not have any kind of licenses or permits and may not exist on paper.

Maybe I should correct that last statement. The corner gold buyer may actually have a license; a barber’s license, a liquor license, a vendors license to sell flowers or maybe for auto repair, but not always the required license to conduct his current business.

Even the so-called reputable jewelry stores in your area may not be operating within the confines of the law. We’re not talking about the occasional trade-in. Jewelry stores are finding it harder to make a dollar or two in today’s economy. With soaring gold prices, gold sales are declining or non-existent. The only way many small jewelry stores have been able to survive is through over-the-counter buying. They have their “WE BUY GOLD” shingle hanging out, too.

While many state and local jurisdictions do have laws for second-hand purchasing, most are not enforced. This is what the local buyers of precious metals and traveling hotel buyers are counting on: the lackadaisical attitude of local or state authority. These buyers also know to set up shop in an un-incorporated jurisdiction to further reduce the likelihood of local intervention.

This has gone on long enough. Pawnbroking groups around the country are starting to rebel.

They are doing it the right way. New laws are being passed in states around the country that establish enforceable guidelines for those who wish to purchase precious metals from the public. Quite often these new laws are amendments or additions to the current state pawnbroking statutes. And every now and then, we find that law enforcement shares our views on the subject.


In Illinois, HB 4854 amended the Pawnbroker Regulation Act to include a new section to license and regulate precious metals buyers.  Effective 7/14/2010. A complete copy of HB 4854 may be found at:

FINANCIAL REGULATION (205 ILCS 510/15) Pawnbroker Regulation Act


Sec. 15. Temporary buying locations; unregistered buyers.

(a) For purposes of this Section:

“Temporary buying location” means a location used by an unregistered buyer, including, but not limited to, hotels and motels.

“Unregistered buyer” means an individual business, or an agent of an individual business, engaged in the business of purchasing from the public, scrap precious metals, including, but not limited to, jewelry, precious stones, semi precious stones, coins, silver, gold, and platinum, that conducts transactions at a temporary buying location but is not registered under this Act.

(b) An unregistered buyer that seeks to conduct business at a temporary buying location in this State must comply with all of the following:

(1) An unregistered buyer must register with the sheriff of the county at least 30 days prior to its intention to conduct transactions in that county.

(2) An unregistered buyer must submit by 6 a.m. each day to the sheriff of the county in which he or she is located detailed transaction records for the previous day, which must include purchaser, seller, and inventory information pursuant to subsection (b) of Section 5 of this Act.

(3) An unregistered buyer must pay a registration fee to the sheriff of the county in which it seeks to conduct business. This fee shall be used to defray the cost of reviewing the records required under this Section and may be apportioned as the sheriff sees fit.

(c) The Department of Financial and Professional Regulation may adopt rules necessary for administration of this Section, which must include a fee schedule for counties to follow.

(Source: P.A. 96 1038, eff. 7 14 10.)

Even cities are getting into the act. Chicago Heights, IL has passed a local ordinance, No. 2011-02, An ordinance amending the City of Chicago Heights, Illinois Code of Ordinances and regulating the transfer or conveyance of precious metals and gems to amend the City of Chicago Heights, Illinois Code of Ordinances and regulate the transfer or conveyance of precious metals and gems. The ordinance was passed on February 15th, 2011 and went into effect immediately upon passage. Referenced in City Council meeting:





WHEREAS, the City of Chicago Heights is a Home Rule Unit pursuant to the Constitution of the State of Illinois of 1970, and may thereby promulgate rules and regulations for the benefit of its Citizens; and,


WHEREAS, in order to promote the health, safety and welfare of its citizens, the City of Chicago Heights may from time to time adopt and enact ordinances to achieve those goals; and,


WHEREAS, in order to effectively monitor and regulate businesses which by their nature may facilitate the transfer or disposal of stolen property, and which by their presence may inherently attract a criminal element to this community; and,


WHEREAS, the police department will be better enabled to prevent and investigate crimes involving the theft and disposal of stolen property if written procedures are established regulating the licensing of and record keeping maintained by those involved in the commercial business of buying and selling precious metals and gems;


NOW, THEREFORE, BE IT ORDAINED by the Mayor and City Council of the City of Chicago Heights, Cook County, Illinois, as follows:


Section I: The recitals above are hereby restated and incorporated herein as section I of this Amendment to the City of Chicago Heights Code of Ordinances as though specifically set forth again.

Section II: Chapter 31 of the City Code of Chicago Heights is hereby amended by adding newly created Sections 31-80 through and including 31-90 to be entitled “Precious Metal and Gem Brokers” (hereinafter referred to as “Broker or Brokers”).

Mississippi has instituted HB 1195, an act to regulate the business of purchasing gold and precious items for the purpose of reselling those items in any form. Effective July 1, 2011. A complete copy of HB 1195 may be found at:

HB 1195: Gold and precious items; regulate business of purchasing for resell purposes.

An act to regulate the business of purchasing gold and precious items for the purpose of reselling those items in any form; to define certain terms; to exclude certain businesses from the provisions of this act; to require dealers engaged in the business of buying precious items to obtain a privilege license before engaging in the business, to maintain certain information relating to individual transactions, and to make weekly reports regarding to individual transactions, and to make weekly reports regarding items purchased to local law enforcement agencies; to require dealers to keep purchased items in their original form for fifteen business days; to require dealers to prominently display a copy of this act on their premises; and for related purposes.

The State of Maryland enacted HB 318 to license and regulate secondhand precious metal object dealers. It went into effect October 1, 2010.   A complete copy of HB 318 may be found at:

Business Regulation – Secondhand Precious Metal Object Dealers

FOR the purpose of repealing a certain provision of law authorizing a secondhand  precious metal object dealer to transact business for a certain period of time at a  certain event; providing that a license to do business as a dealer may be used only to benefit the licensee; authorizing only licensed dealers to make certain advertisements; requiring a certain advertisement to include certain  information; requiring dealers to retain the original copy of a certain record at a certain location; authorizing a dealer to request a certain extension; requiring the Secretary of Labor, Licensing, and Regulation to distribute certain information to licensed dealers or post the information on the Department of Labor, Licensing, and Regulation website; and generally relating to regulation of secondhand precious metal object dealers.

In Arkansas, they introduced HB 1841 to amend their state law concerning pawnbroking, precious metal dealer licensing, and the purchase of gold, silver, and other precious metals. Approved 4/11/2011. A complete copy of HB 1841 may be found at:

HB 1841

For An Act To Be Entitled

An act to amend the law concerning pawnbrokers, precious metal dealer licensing, and the purchase of gold, silver, and other precious metals; and for other purposes.



To amend the law concerning pawnbrokers, precious metal dealer licensing, and the purchase of gold, silver, and other precious metals.


Alabama came forward with SB 530 to provide for permit requirements and recordkeeping that would prevent the transient operation of a gold or precious item buying business and to establish criminal codes for violations. Effective July, 2010. A complete copy of SB 530 may be found at:

Transient gold buying businesses, permits, record keeping, penalties


To provide for permit requirements and record keeping that would prevent the transient operation of a gold or precious item buying business; to provide that a violation of this act is a Class B misdemeanor; and in connection therewith would have as its purpose or effect the requirement of a new or increased expenditure of local funds within the meaning of Amendment 621 of the Constitution of Alabama of 1901, now appearing as Section 111.05 of the Official Recompilation of the Constitution of Alabama of 1901, as amended.


Senate Bill 530 as amended by the Committee on Government Operations requires dealers of precious items to purchase a $100 business license annually from the State and a $50 business license annually in each county where business will be conducted. This could increase fee receipts into the State General Fund and to county general funds by an undetermined amount dependent upon the number of businesses that would now be required to purchase the business licenses. In addition, this bill increases the administrative obligations of local law enforcement agencies by a small undetermined amount by requiring that the local law enforcement agencies provide forms for dealers to itemize purchases and by further requiring that those forms showing the itemized purchases be delivered to the local law enforcement agencies at least weekly.

In addition to manufacturers, retail merchants and wholesale dealers, this bill will also exempt pawnbrokers licensed by the Alabama Banking Department.

Lastly, this bill could increase receipts to the State General Fund and municipal general funds from fines; increase receipts to the State General Fund, county general funds, municipal general funds, and other funds to which court costs are deposited; and could increase the obligations of local jails by an amount dependent upon the number of persons charged with and convicted of the offenses provided by this bill and the penalties imposed.

The state of Washington recently passed HB 1716 to regulate secondhand dealers who deal in precious metals. Effective July 22, 2011. A complete copy of HB 1716 may be found at:

Washington Engrossed Substitute House Bill 1716

HB 1716 – 2011-12

Regulating secondhand dealers who deal with precious metal property.

Expands the definition of “secondhand dealers” to include transient secondhand


Requires secondhand dealers to maintain specific detailed records for transactions

involving precious metals for a total of three years.

Prohibits the removal of any previous metal property bought or received in pledge or

by consignment by a secondhand dealer from the place of business for a period of 45

days after the receipt of that property, except when redeemed by or returned to the


Makes it an unranked class C felony to commit a second or subsequent offense that

involves property consisting of a precious metal.
Effective 7/22/11

AN ACT Relating to the regulation of secondhand dealers; amending RCW 19.60.010, 19.60.020, and 19.60.055; reenacting and amending RCW 19.60.066; adding new sections to chapter 19.60 RCW; creating a new section; and prescribing penalties.


NEW SECTION. Sec. 1. The legislature finds:

(1) The market price of gold has increased significantly in recent years and there has been a proliferation of secondhand dealers, including temporary, transient secondhand businesses, engaging in “cash for gold” type precious metal transactions. Frequently, these “cash for gold” type operations are operated by persons desiring to exploit unsuspecting consumers based on current market conditions;

(2) The increasing number of “cash for gold” type transactions in communities and neighborhoods throughout Washington has been linked to increased crimes involving the theft of gold and other precious metal objects, including home burglaries, robberies, and other crimes,

resulting in depressed home values and other threats to the health, safety, and welfare of Washington state residents; and

(3) With the growing number of precious metal transactions, there is a corresponding significant increase in the number of “cash for gold” type storefront businesses, including temporary, transient secondhand businesses, in Washington state which may not be consistent with the growth goals and quality of life sought by communities and neighborhoods and the state as a whole.

Therefore, to better protect legitimate owners, consumers, and secondhand dealers, the legislature intends to establish and implement stricter standards relating to transactions involving property consisting of gold and other precious metals.

While many states have existing laws that regulate precious metal buying (like South Carolina’s Code of Laws, Title 40 – Professions and Occupations, Chapter 54, Dealers in Precious Metals and Ohio’s Ohio Revised Code, Chapter 4728: Precious Metals Dealers), these older statutes do not address the real concerns of the industry today and are often very loosely enforced, if at all.

For example, in Ohio, Chapter 4728: Precious Metals Dealers of the Ohio Revised Code outlines the rules and requirements for Precious Metals Dealers in the state of Ohio. The statute was drafted in the early eighties following the first big gold rush.

This section of law is old, outdated, has too many loopholes and is unenforced. The Ohio Jewelers Association lobbied at the time for exemptions that would exclude all jewelry stores from this statute. These exemptions also make the statute unenforceable for other businesses at the same time. For example, a business is exempt if “the total value of the person’s purchases of jewelry from the public represents less than twenty-five per cent of the person’s total retail sales of articles of jewelry to the public during the immediately preceding year.”

This exemption may have been questionable, in theory, even back in the early 1980s. But today, with gold in the $1,700 an ounce range, jewelry purchases from the public often exceed retail sales for these jewelry buying operations.

The Ohio Pawnbrokers Association has drafted a new bill that is currently being introduced to amend this section of law updated for today’s standards for licensing, reporting and holding of precious metal purchases, much like the Ohio Pawnbrokers Act now requires for pawnbrokers. No bill number has been assigned yet. Hopefully, it will be introduced just after the November elections and passed this session.

If your area is over-run by gold buyers who are not following the laws and ignoring the standards you are required to meet, and if you are tired of playing second fiddle in the returns-on-investment area of precious metals buying because of holding periods, you may have to be the one to take the first step to correct things.

Don’t be shy. Get copies of all the laws and ordinances mentioned in this article and sit down with your local state representative or senator. Ask how you can get a similar law instituted in your state. You may find that many political leaders are willing to jump at an opportunity that will actually benefit their constituents.

Granted, it might not hurt to drop a few gold coins into your rep’s campaign fund, but you will find that any money spent on this endeavor will be returned to you many times over when 80 percent of the unlicensed metal buyers are shut down and others, after finding they need to hold their purchases for seven to thirty days, may change their business model.

It takes a few dollars in the bank to have your money (metals purchases) sitting in limbo for a holding period before you may sell it. And then, you find out gold has dropped $200 an ounce since you bought it. Welcome to our world!

Ric Blum is a vice president of Ohio Loan Co. in Dayton. He has served as president of the Ohio Pawnbrokers Association, secretary/treasurer of the National Pawnbrokers Association and as a member of the board of directors and the board of governors of the National Pawnbrokers Association. Please feel free to e-mail your comments to or mail them to Ric Blum, Ohio Loan Co., 3028 Salem Ave., Dayton, OH 45406.

No Private Right To Sue Title Lender

Posted on 09. Jan, 2012 by in Winter 2011

No Private Right To Sue Title Lender


When a state legislature creates a set of laws that govern title lenders, can a customer use those very laws to sue the lender? Recently a title lender asked the Tennessee Supreme Court to decide that very question.

A group of customers brought a complaint as a proposed class action on behalf of those who had a title pledge loan with a title lender in Tennessee.

According to the customers, in the title pledge transaction, the lender loaned money to each customer in exchange for a security interest in his or her motor vehicle. The customer delivered the certificate of title for the vehicle to the lender while retaining possession of the vehicle for the duration of the loan agreement.

Upon paying the total amount due within a specified period of time, the customer had the right to redeem the vehicle title. If the customer defaulted on the loan, the lender had the right to take possession of the vehicle and to sell it after the expiration of a grace period.

The customers claimed that they and the proposed class members were charged interest in excess of the statutory maximum set forth in the Tennessee Title Pledge Act or were charged fees that were not allowed by the TTPA.

Specifically, they claimed that the lender allegedly charged a prohibited “redemption premium fee” for redeeming the loan, calculated according to the date the loan was paid, which they said violated the TTPA because the redemption premium fee was not allowed.

They also alleged a violation of the Tennessee Consumer Protection Act, because the lender misrepresented to them that the redemption premium fee was lawful under the TTPA.

The customers asked the court for class certification, to rescind the title pledge loan agreements, and to award them punitive damages for the lender’s fraud.

The lender originally moved to compel arbitration, citing identical clauses in the title pledge agreements signed by each customer. The trial court granted the motion to compel arbitration and then granted the customer’s request to file an appeal.

The Court of Appeals ultimately reversed, holding that the arbitration clause was unconscionable and unenforceable because it reserved access to a judicial forum for the lender but restricted the customers to arbitration.

The lender then filed a motion to dismiss for failure to state a claim. It argued that the facts alleged by the customers, including the contents of the loan agreements that the customers attached, established that the lender did not violate the TTPA by charging prohibited fees or excessive interest.

Although the parties had not originally raised the issue, the trial court subsequently requested them to address the question of whether a private right of action existed under the TTPA. The trial court then dismissed the individual and classwide TTPA claims, ruling that the TTPA provided no private right of action.

The trial court also dismissed the class allegations under the TCPA in light of the Tennessee Supreme Court’s ruling that TCPA claims were inappropriate for class certification.

The trial court, however, didn’t dismiss the individual TCPA claims and it gave the customers permission to appeal the issue of whether the TTPA provided a private right of action. The Court of Appeals decided that the TTPA did create a private right of action in favor of pledgors for violations of the TTPA and reversed the trial court ruling.

State Supreme Court

The case was then appealed to the Tennessee Supreme Court, which agreed to hear the appeal to answer a single question: whether the TTPA permitted a private right of action on behalf of pledgors against title pledge lenders who allegedly charged excessive interest and prohibited fees.

The State Supreme Court noted that a motion to dismiss a complaint for failure to state a claim admits the truth of all of the relevant and material allegations contained in the complaint, but asserts that the allegations have failed to establish a cause of action.

Thus, noted the court, it would initiate a fresh review of the trial court’s legal conclusions, including the determination that the TTPA did not contain a private right of action.

The Supreme Court said that determining whether a statute creates a private right of action is a matter of statutory construction. A court’s essential duty in statutory construction is to determine and implement the legislature’s intent without limiting or expanding the statute’s coverage beyond what the legislature intended.

When the existence of a private right of action depends on the contents of the statute, the courts are not privileged to create such a right under the guise of liberal interpretation of the statute. The authority to create a private right of action under a statute is the province of the legislature.

To determine whether the legislature intended to create a private right of action for excessive interest and prohibited fees, the Supreme Court said it would begin with the specific statutory language.

Here, said the court, there was no dispute that the express language of the TTPA, at the time, did not create a right of action on behalf of a title pledgor against a title pledge lender, whether in the specific section prescribing the interest and fees that title pledge lenders may charge or elsewhere.

By contrast, noted the court, the legislature expressly granted a private right of action in the TCPA. Under that statute, “any person who suffers an ascertainable loss … as a result of the use or employment by another person of an unfair or deceptive act or practice declared to be unlawful by this part, may bring an action individually to recover actual damages.”

If a statute doesn’t expressly create a private right of action, a court’s next inquiry is whether the legislature otherwise indicated an intention to imply such a right in the statute.

In this case, the Supreme Court said it would look at the statutory structure and legislative history, including (1) whether the party bringing the cause of action was an intended beneficiary within the protection of the statute, (2) whether there was any indication of legislative intent, express or implied, to create or deny the private right of action, and (3) whether implying such a remedy would be consistent with the underlying purposes of the legislation. The burden in this case, ultimately would fall on the customers to establish that the statute created a private right of action.

Overview of Statutory Scheme

The TTPA was amended in 2005. The court said that the customers and the lender did not dispute that, in determining whether a private right of action existed when the customers filed their action, the court would look at the pre-2005 version of the TTPA and use it in its overview of the statutory scheme.

The General Assembly, said the court, originally enacted the TTPA in 1995, after a United States Bankruptcy Court decision holding that a title pledge loan did not satisfy the requirements of a “pawn transaction” under the Tennessee Pawnbrokers Act. According to the TTPA’s original statement of purpose:

The making of title pledge loans vitally affects the general economy of this state and the public interest and welfare of its citizens. It is the policy of this state and the purpose of this chapter to:

(1) Ensure a sound system of making title pledge loans through licensing of title pledge lenders;

(2) Provide for licensing requirements;

(3) Ensure financial responsibility to the public; and

(4) Assist local governments in the exercise of their police power.

These purposes are regulatory and penal in nature.

The TTPA legalizes loans by licensed title pledge lenders on pledges of personal property, certificates of title and pledges of titled personal property.

Among other provisions, the TTPA sets forth the eligibility requirements necessary to obtain a license and prescribes the contents of the petition for the license that the would be lender must submit.

Lenders must record all loan agreements they execute, making those records available for inspection and must record all liens on the certificate of title in a title pledge transaction.

The TTPA further caps the length of pledge agreements at 30 days, permitting renewals for 30 day periods in most circumstances; allows the lender to take possession of titled property if the pledgor defaults; and prescribes a 20 day holding period before the lender may sell the unredeemed property.

The customers claimed that Section 45 15 111(a) of the act was violated in this case. That section capped the interest that title pledge lenders could charge at 2 percent per month but allowed lenders to charge “a customary fee to defray the ordinary costs of operating a title pledge office.” That fee could not exceed one fifth of the original principal amount of the loan, or of the total unpaid balance due at the beginning of any renewal. The TTPA separately spelled out other prohibited actions by title pledge lenders.

At the time the customers filed their action, the TTPA provided for enforcement of its provisions entirely through criminal and administrative penalties. A knowing violation of the TTPA was a class A misdemeanor. Amendments in 1996 also provide that the license of a title pledge lender would be suspended for knowingly violating department rules that required the lender to issue a standardized notification and disclosure form before to executing a loan agreement. A repeated, persistent pattern of knowing violations of those rules would result in a longer suspension and potentially a revocation of the license.

Accordingly, said the court, before the department’s regulations under the 1996 amendments were added, the TTPA “contained no civil sanctions for a violation” of the statute, but was enforced entirely through criminal prosecution for knowing violations of its provisions.

The Supreme Court noted that where an act as a whole provides for governmental enforcement of its provisions, it would not casually engraft a means of enforcement of one of those provisions unless such legislative intent was manifestly clear. The court turned to the three factors relevant to deciding whether the legislature intended to imply a private right of action in the TTPA.

Plaintiffs as Intended Beneficiaries

The first factor is whether the party bringing the action was an intended beneficiary within the protection of the statute. Pledgors such as the customers were within the protection of the TTPA and stood to benefit from its provisions. The TTPA prohibits the title pledge lender from accepting any waiver of any right or protection accorded a pledgor under the statute.

The legislative history confirmed that pledgors were the intended beneficiaries of the TTPA. In particular, the sponsor of the 1995 Act explained that the cap on the interest and fees that lenders could charge incidental to the loan was intended to protect the pledgor consumer.

The mere fact that the legislature enacted the TTPA to protect and benefit pledgors, said the court, was not alone sufficient to imply a private right of action. The court said it must also consider the remaining two factors.

Legislative Intent

The second factor is whether there was any indication of legislative intent, express or implied, to create or deny a private right of action. The customers bore the burden of establishing the evidence of legislative intent to create such a right.

The Supreme Court said it had reviewed the TTPA’s entire legislative history and found nothing that would support the customers’ contention that the legislature intended to imply a private right of action in the TTPA.

According to the sponsor of the act, the cap on fees came about after district attorneys general had threatened prosecution of title pledge lenders for price gouging if the lenders did not “clean up their act.” Nothing in the sponsor’s comments suggested that, in addition to the criminal penalties for knowing violations of the TTPA, the legislature intended to allow private enforcement of the fee cap. Therefore, the customers could point to nothing in the legislative history that would make it “manifestly clear” that the legislature intended to engraft a private right of action onto the governmental means of enforcement that the TTPA provided.

The court noted that nonaction by a legislative body may become significant where proposals for legislative change have been repeatedly rejected. The title lender directed the court’s attention to at least eight bills introduced since the enactment of the 2005 amendments that would have expressly granted a private right of action to title pledge borrowers against title pledge lenders but that did not become law.

As a representative example, House Bill 1984, originally introduced in the 105th General Assembly on Feb. 15, 2007, would have added a new provision that began as follows:

“In addition to the administrative remedies provided in the preceding section, any title pledge borrower aggrieved by a violation of any of the provisions of this title by a title pledge lender shall be entitled to bring a civil lawsuit against such title pledge lender in a court of competent jurisdiction within two (2) years of the reasonable date discovery of such violation.”

Speaking before two committees, the drafter of the model legislation that became House Bill 1984 stated his understanding that the TTPA lacked an express right of action. He further offered the opinion that the TTPA was ambiguous about whether such right of action existed because the TTPA “doesn’t speak to that at all.”

Another bill that failed was introduced in the 106th General Assembly in 2009. It contained identical language on the express private right of action.

Therefore, the court noted that, after the enactment of the 2005 amendments, despite the legislature’s knowledge of the ambiguous silence in the existing statute, it repeatedly considered and ultimately refused to adopt a provision that would expressly create a private right of action under the TTPA and establish a two year statute of limitations for a title pledgor to bring a civil action against a title pledge lender for a TTPA violation.

The proposed language was similar to what the legislature included in the TCPA and other statutes. The court noted that such language had been available to the legislature even before it originally enacted the TTPA in 1995.

Despite being presumptively aware of the language that it has used to create express private rights of action in other statutes, the legislature did not include that language in the TTPA.

Ultimately, the Supreme Court said it concluded that the TTPA’s history did not indicate a legislative intent to create a private right of action for excessive interest and prohibited fees. The court turned next to the third factor.

Underlying Purposes

The final factor, said the Supreme Court, was whether an implied right of action would be consistent with the purposes of the statute.

The TTPA was enacted to establish a “sound system of making title pledge loans through licensing of title pledge lenders,” which included the creation of “licensing requirements.” Although the TTPA sought to “ensure financial responsibility to the public,” it achieved that financial responsibility, at that time, by assisting local governments in the exercise of their police power.

In addition to criminal penalties, a knowing violation of rules concerning the issuance of standardized forms before a lender executed a pledge agreement would result in the suspension and potentially the revocation of the lender’s license.

In short, the TTPA was designed to regulate the title pledge lending industry, especially through the licensure of lenders, and was governmentally enforced through criminal and administrative sanctions.

The courts in Tennessee have refused to imply a private right of action in regulatory statutes enforced through governmental remedies. The court said its philosophy of law reflected the United States Supreme Court’s maxim that it is an elemental canon of statutory construction that where a statute expressly provides a particular remedy or remedies, a court must be cautious of reading others into it.

The TTPA is a regulatory statute enforced through governmental remedies, said the court. Accordingly, the implication of a private right of action would be inconsistent with the TTPA’s purposes as set forth by the legislature.


Pawnbrokers who would like a free copy of this case sent electronically should send an E-mail to with “Private Right” in the subject line.