Don’t get caught out by used car scammers

11 May 2023  By: Ruth Callaghan

It’s one of the oldest tricks in the book — take a car that has plenty of kilometres on the clock and wind back the odometer so it looks like it was only driven to the local shops.

It’s a trick so old that in the days of mechanical odometers, crooks would connect a drill to the speedometer cable and set it to reverse or pry off the casing on the gauges and wind back the dials by hand.

But with the advent of digital odometers that practice looked to have vanished — until now.

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According to the Motor Trade Association of WA (MTAWA), the dodgy practice has had a resurgence as part of an uptick in organised crime involving used car scams, fuelled by a widespread shortage of second-hand vehicles.

With orders on some new cars still taking up to a year or more thanks to supply chain issues, some of that demand has been transferred to second-hand vehicles — as has a corresponding rise in the price of used cars.

That’s created an increased incentive for organised crime gangs to look for ways to fool legitimate buyers says Stephen Moir, CEO of MTAWA.

“Prices for used cars during the whole of COVID topped out at about 38 per cent higher than what they were pre-COVID, and obviously that’s an opportunity for bad people to take advantage,” Moir says.

“With that opportunity has come some remarkable scams, including odometer tampering, with cars being wound back 100,000 or 150,000 kilometres. It’s so bad that we’re actually holding crisis meetings with key players in the sector to address the matter.”

Odometer tampering is a growing problem

The odometer scam has become more common around the globe.

In December 2022, North American used car platform Carfax released research estimating 1.9 million cars on US roads were driving with altered odometers, a 7 per cent rise over the previous year. It estimated the average ‘cost’ to an unwary consumer of buying a car with more miles on the road than on the clock was close to $6000 USD [$8900 AUD].

Not only was the practice rampant, but the organisation argued it was easier now to tamper with an odometer using hacking tools than in previous decades.

In Queensland, a major bust of backyard dealers in 2022 found as many as 700 vehicles — mostly four-wheel drives — were being given mileage makeovers and primped for sale.

In one case, a $8000 Toyota Landcruiser had 400,000 kilometres wiped from its clock — the equivalent of travelling from Earth to the Moon — before being resold for $54,000.

And while such a scam might sound extreme, odometer tampering is just one of the brazen practices catching out Australian drivers.

The MTA’s Stephen Moir says WA still records cases where vehicles that have been in serious crashes and are written off as uneconomic to repair, will resurface with a new paint job and other superficial repairs but still with underlying structural issues.

“Unfortunately, a lot of them end up as ride-share vehicles because many people who drive for these services need an affordable car,” he says. “Again, consumers are the ones who are most impacted by these vehicles being on the road, when they really should be scrapped.”

Good deals can be deceptive

In cases where a vehicle appears to be a good deal, offered by someone the buyer might have met through a friend or online, there can be a reluctance to question too closely, he says. But even used car dealers have been caught out by car scammers looking to pass off a vehicle as something it is not.

“For most people, buying a car is an emotional thing. People get very excited and start to dream about their new car and forget about the practicalities,” Stephen Moir says.

“But we’re also seeing even very experienced dealers caught out because the other thing that's happening is that sellers are substituting service books that appear to prove the car has been well maintained.

“So we're seeing an increase in the level of theft of service books, or replication of service books, mimicking the service orders of the car, which makes it harder to detect the fraud.”

Consumer Protection WA recommends that buyers do a thorough check before buying any second-hand vehicle, including questioning whether a vehicle has previously been in a crash.

A $2 search on the Personal Property Securities Register of the VIN, the unique 17-character vehicle identification number, will show whether the vehicle has been used as security for a debt, has been reported as stolen or has been written off in the past.

Make sure you use the address ppsr.gov.au as there is a similar site using the .com.au suffix, which should be avoided, given it charges more to do the same thing. Without the check, a buyer might find the car can be legally repossessed if the former owner has used it for security but defaulted on a loan.

Consumer Protection WA also recommends anyone buying from a private seller examine the vehicle closely, looking for things such as signs of water in the glove box or water debris under the seat mountings and lifting the seat covers to inspect the original fabric.

It strongly recommends buyers get any vehicle they are considering checked first by a qualified mechanic.

During a recent pre-purchase vehicle inspection carried out by RAC’s Auto Services, a Toyota Landcruiser, which looked its age on the outside, had an immaculate, almost new interior. This seemed odd to the technician carrying out the inspection given the vehicle’s age.

Further investigation revealed the Landcruiser had previously suffered internal fire damage which had not been declared by the seller. This was confirmed in the vehicle history report, which was also part of the inspection service.

While cosmetically repaired, severe interior damage due to fire could affect the vehicle’s residual value when it comes to be sold again. The buyer decided to walk away from the sale.

Common used car sales scams

One common scam that continues to do the rounds is that of a female Defence officer about to head off on deployment, who is anxious to sell the car she was awarded in her divorce before she ships out.

The money, she says, will go to her mother, who will be caring for her two children — how can a buyer resist such a bargain that doubles as a good cause?

In recent years, vehicle scams like this have yielded more than $1 million annually, with ‘sellers’ sometimes co-opting legitimate advertising or sending buyers to fake car sites that are spoofed to look like a real trading platform.

In 2022, more than $200,000 was lost in WA alone on this kind of online vehicle scam.

RAC Vehicles and Fuels Manager Alex Forrest says the pressure many buyers feel to purchase a car before someone else does can lead to rushed decision-making.

“There's more at stake these days when people are trying to find vehicles that are now quite hard to get hold of,” he says.

“So when someone finally does find a suitable vehicle, they tend to put more stock in the opportunity and that raises the risk of them becoming involved in a scam because the scammers have more leverage and the buyer is more vulnerable.”

He recommends buyers be alert to red flags that might indicate something is not quite right.

“You can find people misrepresenting vehicles, often with low pricing that might get your attention, who are willing to discount it further and are often keen to get the deal done quickly,” Forrest says.

“We see scammers using messaging services to make it sound like a vehicle is nearby, appealing and well-priced. If it has a good history, but the seller doesn’t want to talk to you on the phone, that should raise a red flag.

“Further signs of shady dealings are if the seller is not a dealer but has several vehicles at a location, or if the location is not their home or they say they'll bring the car to you.

“There's no shopfront, no house and no address or phone number that you can chase up if you think you have been scammed.”

While less common, sellers can also be scammed, with fake buyers approaching them from other states, negotiating entirely online and then providing fake bank receipts or PayPal statements that seem to show an amount.

The seller is often required to pay for a ‘courier’ out of their own funds, only to discover later that no money has actually been transferred.

While cars are often a key target, Consumer Protection’s ScamNet website reports examples of the scam for the sale of motor bikes, caravans and even horse floats.

Alex Forrest says avoiding vehicle scams old and new can be challenging, but being alert and diligent remains the best defence.

“As hard as it can be to be vigilant when emotions are running high and cars are in short supply, more than ever, you need to be ready to walk away if it doesn’t seem right,” he says.

“As always, if it seems too good to be true, it probably is.”