South Australia Cracks Down on Fraudulent Used Car Dealers with Harsher Penalties

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South Australia has recently vowed to get tough on unprincipled used car dealers, ushering in extensive new fines and extended prison sentences in an attempt to curtail the fraudulent activities marring the industry of the state.

The announcement has specified that a dealer found manipulating an odometer with the intention to deceive potential buyers about the actual wear and tear of a vehicle, could face up to two years of incarceration or a fine of $30,000. This marks a threefold increase from the previous penalty of $10,000.

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Similarly, the act of dealing without a licence will now be met with doubled potential imprisonment, rising from one year to two years, and an escalated fine of $250,000, a significant increase from the existing $100,000.

These heightened penalties are the consequence of inspections carried out by the government’s Consumer and Business Services division which unearthed “concerning trends” in the industry.

Scrutiny of 170 used car dealers, both home-operated and in official car yards, revealed an expanding number of licensed dealers masquerading as private sellers in order to sidestep legal responsibilities. These include the provision of statutory warranties and disclosure if a car was salvageable after being declared a total loss.

The government division states they have noticed a surge in complaints regarding unlicensed dealers, engaged in dubious practices, operating from homes and utilising platforms like Facebook Marketplace. They have been reported to be making sales featuring deceptive documents and manipulating odometers to falsify lower mileages on the vehicles.

According to the agency, licensed dealers, too, have been implicated in these fraudulent practices, both at physical locations and from home.

The last fiscal year saw a total of six individuals penalised with an accumulated value of over $35,000 in fines and compensation mandates, following their convictions for meddling with odometers. Out of these, four were found to be unlicensed operators.

Consumer and Business Affairs Minister Andrea Michaels asserts that these measures aim to safeguard families resorting to used cars owing to the prevailing cost-of-living crisis. She condemns the unsavoury behaviour of dishonest dealers and promises continued and rigorous targeting of this sector with these stern penal laws.

South Australia’s stringent legislation follows closely on the heels of similar steps by NSW after it experienced a fourfold increase in odometer fraud incidents during 2021-22.

In a proactive initiative, the NSW government launched free odometer readings last June via the Service NSW app and website to aid buyers in detecting fraudulent transactions. Purchasers can now access a used car’s three most recent annual odometer readings if the vehicle was registered in NSW.