The fight is on to stop fraudsters from turning back the clock.
Tampering with odometers in second-hand cars is a problem across the EU. Studies estimate the cost of such fraud at between €5.6 billion and €9.6 billion a year. So the European Parliament is gearing up to demand new laws to clamp down on the practice — using Belgium as the role model.
There, a 2004 law mandating regular data collection on locally registered vehicles has drastically curtailed the practice.
But in Poland, the EU’s biggest second-hand car market, an estimated 70 to 90 percent of the annual 1 million cars imported each year have turned-back odometers — clocks measuring the distance a car has traveled — according to research published by the European Parliament.
“I think that most of the cars being bought outside Poland and imported have changed mileage,“ said Adam Adamczewski, who runs the Overland Motors garage in Warsaw. The trick is turning back the mileage on cars that have been driven mainly on highways, and so have less of the visible wear and tear associated with inner-city driving, Adamczewski said.
“I think that most of the cars being bought outside Poland and imported have changed mileage“ — Head of Overland Motors garage
Przemysław Borkowski, from the University of Gdańsk, helped draft the Parliament’s report on odometer tampering. He said a common problem is with second-hand German cars being sold in Poland — a business dominated by small traders moving one or two cars at a time.
It’s an easy con. With tools available online, an unscrupulous seller can add thousands of euros to the price of a used vehicle with almost no chance of being caught. In Poland, Adamczewski said, odometers on second-hand cars rarely show more than 200,000 kilometers on the clock as that’s the distance beyond which sales are tough to close.
“The chances of being caught are very low for these fraudsters and it’s very hard to prove who is [the] bad guy in these chains,” said Michel Peelman from Belgium’s Car-Pass in December. The company has collected data on vehicles for over a decade under the 2004 law and Peelman wants a similar system deployed elsewhere in the EU.
In Belgium, odometer readings from mechanics, body shops, tire companies and on-road maintenance teams are fed back into the Car-Pass database. That means every vehicle registered in Belgium has an easy-to-reference history of mileage readings for prospective buyers.
“The most crucial element here is to enable the cross-border exchange of those odometer readings” — Ismail Ertug, MEP
The catch is that imported vehicles aren’t part of the database, leaving an opening for fraud.
The European Parliament wants the European Commission to act. MEP Ismail Ertug has lodged an own-initiative report calling for legislation that takes the Car-Pass model, and a similar system introduced in the Netherlands, and makes it Europe-wide.
“The most crucial element here is to enable the cross-border exchange of those odometer readings,” said Ertug. “This will enable consumers to verify the mileage of a used vehicle they intend to buy. The examples of Belgium and the Netherlands show that those combined measures drive down odometer fraud close to zero.”
An EU-wide binding initiative for logging mileage in used vehicles would cost €97 million to set up and wipe out some 97 percent of all fraud, according to the Parliament report drafted to complement Ertug’s paper.
“The strength of the system depends on how often you get data from as many sources as possible,” said Peelman.
The alternative is getting carmakers to install tamper-proof odometers in new vehicles, while carrying out a retrofit program for the millions of cars already on the road. That would cost €19.6 billion, according to the Parliament’s study. And even that may not work.
“It is not realistic,” said Adamczewski. “Men cannot make something that another man cannot change. Someone will find a way to make a fraud.”
Another hope for better security is using blockchain technology, which could create a system that logs mileage on a shared ledger. But that poses a problem as, according to Borkowski, there needs to be some way to edit the odometer in the case of a fault, meaning producers will always need to leave a backdoor that con artists can also use.
“Any technical solution can be cracked, you just need time,” Borkowski told MEPs while presenting his report.