Pan-European battle to fight odometer fraud

November 18, 2016

A pan-European effort to tackle the problem of odometer fraud is under discussion by companies in the used car market.

The practice of altering a vehicle’s odometer, known as clocking, reduces the registered distance a vehicle has covered, which can increase its residual value. There are fears it could undermine confidence in the used car market, particularly when it comes to accurate valuations of cars.

The Car Remarketing Association of Europe (CARA) identified fraud as one of its key priorities during its 2016 general assembly.

Members heard that the Car-Pass system used in Belgium has led to a drastic reduction in fraud in the past decade.

Car-Pass is a document that provides a guarantee of an accurate odometer. It shows the odometer history of a vehicle and, when a vehicle is sold, the seller is legally required to provide a Car-Pass to the buyer.

In 2006, it was estimated that about 60,000 odometers had been tampered with out of a total of 750,000 used cars and LCVs traded in Belgium. Fraud was estimated to inflate the value of used vehicles by €150–200 million.

With the system in place, by 2015 only 1,197 new cases of odometer fraud were registered, no more than 0.16 % of all used cars registered in Belgium.

There are calls for Car-Pass to be adopted internationally, with a survey showing that  the industry supports pan-European legislation requiring mileages to be submitted to a central database.

The problem of odometer fraud has become so serious that an international conference was held in October 2016 to discuss strategies to tackle the issue.

During the event, nearly 90% of companies rated the issue of mileage fraud as ‘very serious’ or ‘extremely serious’.

In the UK, there have been ongoing calls for action to combat fraud and the government is currently considering steps to outlaw the use of devices used to wind back odometers.

Currently, it is not illegal to adjust the odometer on a vehicle, or to sell the devices that make it possible, but it is a criminal offence to sell a vehicle to someone without notifying them that the odometer has been changed.

The National Franchised Dealers Association has written to the UK Government asking for odometer adjustment to be criminalised, saying it is now a ‘huge problem’ for the automotive industry that requires urgent action.

The British Vehicle Rental and Leasing Association has also called for action.

As part of its role, CARA has established links with EU lawmakers and has begun talks on a range of issues that affect the used car market.

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