Immigration says that shouldn’t happen
The Cayman Islands Immigration Department said last week that it is aware of at least one instance in Grand Cayman where a foreign passport was held as collateral for a loan given by a pawnshop to an individual who needed cash.
In the situation, the Caymanian Compass has learned, the business held the passport for a period of time during which the original holder was supposed to pay back the loan given to them by the pawn shop.
Although immigration officials said they were not aware of any local law regulating the operation of pawn shops in this regard, they said it is typically against the law to transfer ownership of a passport to anyone.
“If your passport is held as part of an agreement that, if you forfeit the payments, it automatically becomes property of the lender; a passport cannot become someone else’s property,” said Assistant Chief Immigration Officer Jeremy Scott. “At no time can there be a transfer in ownership or a default in ownership.”
Immigration officials said the situation they were aware of in this instance did not involve any attempts to alter the passport or use it for some other purpose, which would be illegal. However, Deputy Chief Immigration Officer Gary Wong said most countries consider passports property of their respective governments, which cannot be traded or even given away.
“Let’s put it this way, not even your employer is supposed to have your passport,” Mr. Wong said.
Mr. Scott said he had spoken with the Royal Cayman Islands Police Service and was aware that authorities were looking into the matter. He declined to identify the particular pawn shop involved in the case.
A spokesperson with the police service also declined to discuss specifics of the matter, but confirmed that a passport cannot be sold or traded for other property.
Police said there are certain instances where a passport may be held for a brief period of time, such as a hotel requiring a guest to surrender a passport as a form of security during a stay.
“In respect of cash-for-gold type outlets retaining passports as a security for loans, it would depend on what is stipulated in their Trade and Business licences from the government,” police said.
Mr. Wong said the Immigration Department had spoken to the business involved in the transaction and warned them not to continue accepting such loan “collateral”.
“I’m sure with this article coming out now … it will bring awareness,” he said.