Mileage fraud is unfortunately a common practice in the used car market. Every year, because of them, not only defrauded buyers, but also states lose. In its research across 22 European markets and the US, carVertical, a company that deals with data from the automotive industry, found out how individual governments treat them and what anti-fraud laws they apply. The analysis showed that the approach to mileage fraud varies significantly from country to country. While in some countries there is no legislation against them, in France there is a maximum fine of 300,000 euros for manipulating kilometers. In Croatia, even up to 8 years of imprisonment.
According to Czech legislation, manipulating the number of kilometers traveled is illegal – offenders face a fine of up to 500,000 CZK, the withdrawal of their driver’s license, or even imprisonment for up to 2 years. In the event that they operate any activity related to the automotive industry, so does its prohibition. Even though the laws in the Czech Republic are strict, fraudsters are rarely prosecuted for falsifying mileage. The judge’s final decision can depend on many factors, and fraudsters usually avoid severe penalties. Unfortunately, this does not only apply to the Czech Republic, but also to other countries.
In neighboring Slovakia, local authorities can impose a fine of CZK 120,000 to CZK 1,250,000 on fraudsters. Here, too, offenders face a prison sentence of up to 2 years. Poland also has some of the strictest laws of all the countries surveyed. Driving kilometers vehicles is considered illegal in the country and fraudsters can be jailed from 3 months to 5 years.
Just to give you an idea, 5.1% of the cars that were inspected in the Czech Republic through the carVertical service had mileage on them. In neighboring countries, the numbers were slightly lower. In Poland it was 4.9% and in Slovakia 4.5%. The data thus suggest that even the current legislation does not deter mileage fraud.
Experts from the carVertical platform thus calculated that if all perpetrators were successfully prosecuted and a hypothetical fine of CZK 75,000 was imposed on them for fraud, the Czech Republic would collect up to CZK 2.5 billion in fines annually. Given that the actual fine for such a crime is more than eight times higher, this is a relatively modest example.
“Furthermore, cases of successful litigation could lead to a reduction in these frauds, which is crucial for the used car market. A good precedent is exactly what every country needs on these issues of used car market transparency.” says Matas Buzelis, head of communications at carVertical and automotive industry expert.
In addition, anyone who buys a car with a twisted tachometer usually overpays more than 20% of the actual value of the vehicle. The survey revealed that defrauded buyers in the Czech Republic alone pay up to 2.3 billion CZK more.
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There is no uniform legal system for mileage fraud
Most of the countries surveyed punish mileage fraud with fines or even imprisonment, but not all countries take this crime equally seriously. In Lithuania and France, fraudsters can receive a prison sentence of up to 2 years, in Spain 3.5 years, in Italy 3 years and in Germany 1 year.
However, the above mentioned are the maximum penalties that usually no one gets. Fines are a more common penalty. At the same time, stricter legislation does not necessarily lead to fewer cases, since mileage is a regional problem. It is more common in Eastern than Western Europe due to lower incomes and many imported cars.
For example, in Latvia, fines for running the speedometer are only 2,500 CZK for private individuals, and 25,000 CZK for legal entities. The country also holds an unpleasant lead when it comes to stolen kilometers – as many as 12.9% of all cars checked through carVertical have had their kilometers tampered with. And as of 2020, not a single person seems to have been prosecuted for it.
“There is no uniform legal system for mileage fraud. If all EU member states had the same legislation on this issue, it would lead to a long-term solution to the problem. So far, some countries do not take it as seriously as others, and this is one of the possible paradoxes that global organizations face.” said Buzelis.
Mileage fraud is difficult to trace
Although mileage fraud is illegal in many countries, proving it can sometimes be problematic. Cross-border transactions and information asymmetries between car buyers and sellers open up possibilities for manipulating kilometers in one country and then selling the car in another.
Since the laws of individual countries often fail to protect the rights of their citizens, buyers should always check the history of a used car before buying it. Otherwise, they may become one of the thousands of victims of these scams in Europe.
Tags: buying used, mileage, used cars, used cars, used cars, used car, scam, turning off mileage, twisted tachometer
Tags: Czech Republic loses hundreds millions annually uncollected fines kilometers traveled
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