South Koreans pawn shiny tech for stress-free loans

Per month

Some snippets from the original article...

IT pawn shops like Kim’s lend around 50-70 percent of a device’s market price at a monthly interest rate of 3 percent and an annual rate of 36 percent.

I can’t stock the pawned devices for too long since new products quickly replace older ones,” said Kim, adding he generally keeps them for one month and extends the loans for up to a few months when necessary.

Most South Koreans buy their smartphones through two-year contracts with mobile carriers, which helps them pay for the roughly 1 million won devices through monthly installments.

“What’s funny is that this is all possible since we’re living in a time where you can buy a smartphone even if you’re broke,” Kim said.

... So it seems they use their subsidised S3 as collateral for a loan to help pay the monthly contract with their telecoms company, which is a fail right there.

no problem

Unfortunately, the persons who would buy these devices at pawn shops are probably not the most lucrative to spy on, but I have to wonder what one could learn by installing some malware on a mobile device and then leaving it with the pawnbroker.

so they polished a t*rd

exact same business model as the skeeviest of pawn shops, but put it in a shiny building with "young, savvy" workers, and suddenly the whole "take someone's stuff for pennies on the dollar with an obscene interest rate, then resell that stuff for twice what ya paid when the bloke fails to make good on the 'loan'" thing is okay. How do they factor in the massive, rapid devaluation of these tech goodies anyway? even more obscene interest rates? This will prove to be "interesting."

Still it must be nice to be so easily placated by a shiny faceplate, bright lights bringing comfort to the soul and bright kids making one able to ignore the ugliness underneath. Will this sort of thing be the one-stop shop for thieves to fence their ill-gotten gains at a better rate than the crabby old non-savvy guys give?

Before anyone says so, no, this was not intended to be a description of Apple business models, nor of the majority of the Silicon Valley's actual business dealings. Any similarities between companies living or dead are purely coincidental, though possibly Freudian in nature.

The tricky part

I can see one potential problem with this whole scheme - when does ownership pass to the end user when you buy a cell phone on contract?

Obviously there is the potential for each country to have its own rules about this, but I can see that if ownership remains with the service provider until the contract is completed and the subsidy repaid (a common sense idea?) then the pawnbroker is potentially not holding any form of security for the loan at all.