Consumer protection inspectors say the used car industry is rife with fraud and now one state is jacking up penalties to clean it up.
Shonky used car dealers will face increased jail time and massive new fines in a bid to crack down on the dodgy practices plaguing one’s state industry.
South Australia has just announced a dealer found winding back an odometer, which misleads a potential buyer into the true wear a car has gone through, will face two years in jail or a $30,000 fine, a three-fold increase from the original $10,000 penalty.
People caught dealing without a licence will face double the potential jail time, from one year to two years, and a fine of $250,000, up from $100,000.
The tighter penalties follow inspections from the government’s Consumer and Business Services division that found “concerning trends” in the industry.
Inspectors looked at 170 used car dealers operating from home and in car yards and discovered an increase in licensed dealers selling under the guise of being private sellers to avoid legal obligations, such as providing statutory warranties or disclosing whether a car was a repairable write-off.
“We have also seen an uptick in complaints about unlicensed dealers selling from home via sites such as Facebook Marketplace and engaging in dodgy practices, including selling with false papers and winding back the odometer to make it seem like the car has travelled fewer kilometres,” the agency stated.
South Australia’s tighter laws follows similar moves in NSW. Picture: NewsWire / Sarah Marshall
“Licensed dealers operating both from home and in car yards have also been caught winding back odometers.”
In the past financial year, six individuals were hit with more than $35,000 in fines and compensation orders after they were convicted of tampering with odometers.
Four of the six were unlicensed operators.
Consumer and Business Affairs Minister Andrea Michaels said the measures would protect families turning to second-hand cars in a cost-of-living crisis.
“While most dealers do the right thing, there are unscrupulous operators out there who’ll try to take advantage of people by engaging in dodgy practices,” she said.
“It’s disgusting behaviour, which is why we are continuing to target this area to better protect people with harsher penalties.”
South Australia’s tighter laws follows similar moves in NSW after a fourfold spike in odometer fraud across 2021-22.
The NSW government introduced free odometer readings in June to help buyers dodge fraud through its Service NSW app and website.
Shoppers can access a used car’s three previous annual odometer readings if the vehicle was registered in NSW.
Keyword: SA government announces crackdown on used car fraud