Customers at risk as car clocking reaches epidemic proportions
The Local Government Association warns of surge in car clocking in the UK, with consumer groups warning clocking within the passenger transport industry has reached epidemic levels.
Motorists have never been at a greater risk of buying a clocked vehicle in the UK, according to the Local Government Association (LGA). The LGA which represents more than 370 councils in England and Wales, is urging people to check a vehicle’s history thoroughly before buying it to avoid becoming a victim of fraud.
With the UK voting to leave the European Union, the LGA is calling on the UK government to bring forward a proposed EU ban on companies providing “mileage correction” services from the current EU planned date of May 2018.
An existing legal loophole means that while knowingly selling a clocked car without disclosing it is fraud, ‘mileage correction’ services can act with impunity in the UK.
Industry experts and even the Office of Fair Trading have stated that their belief that legitimate instances of mileage adjustment appear to be rare, and were unlikely to be sufficient to keep in business the number of traders openly offering ‘mileage correction services’ throughout the UK.
As car clocking increases in the UK, gone are the days where winding the mileage back was predominantly associated with unscrupulous car dealers who passed off high-mileage vehicles as low mileage to make a fast buck. Today you are more likely to be a victim of car clocking if you buy a used vehicle from members of the public or businesses who run a fleet of vehicles.
According to the vehicle checking service HPICheck.com, latest statistics show you have a 1 in 20 chance of buying a vehicle with a mileage discrepancy. This is because car clocking has evolved over the past few years thanks in part to a combination of technology, low mileage leasing and PCP contracts.
The LGA is also calling for mileage correction devices – widely available for sale online for about £120 – to be banned to help reduce clocking. Even though this move should be welcomed why can’t the UK follow the example of the Irish and actually make the act of tampering with an odometers’ mileage a specific criminal offence?
The Department of Transport, Tourism and Sport from the Irish government told AngryPolicyholders.com: “The issue of car clocking had been under discussion for some time. In the course of passage of the Road Traffic Act 2014, the then Minister decided that there was a gap in the legislation as it currently stood, and therefore the Minister introduced the what is now section 14 of the 2014 Act.”
“Under section 14 of the Irish Road Traffic Act 2014, which came into effect as of 20 March 2014, has made it an offence to interfere or attempt to interfere with the odometer of a mechanically propelled vehicle. Previously, Ireland had dealt with clocking through the Consumer Protection Act 2007, as part of misleading commercial practices.”
The spokesman continued: “While there have been successful prosecutions against car dealerships for selling or offering the sale of motor vehicles in Ireland with altered odometer readings – clocked cars – under that law, it didn’t apply in cases of private sales, and did not make the act of clocking a vehicle in itself an offence.’
In the meantime trading standards teams across the UK have to bring cases to court using the fraud act by charging those involved in clocking with conspiracy to defraud which results in cases taking time and resources to bring to court. However, if the physical act of clocking was to become a specific criminal offence cases could result in more prosecutions and free up resources for councils and trading standards departments.
Clocking up time at her Majesty’s pleasure
But that is not stopping council trading standards teams’ nationwide bringing successful prosecution, helping to secure jail sentences for rogue car dealers and individual sellers in recent clocking prosecutions.
In October 2015, five men from the same family were jailed for a total of 18 years and three months for conspiring to clock more than four million miles off cars in a professional car clocking operation. Mileages on vehicles had been lowered by as much as 125,000 miles. The case is believed to be the biggest investigation into car clocking that Birmingham Trading Standards has carried out.
In March 2016 a used car dealer was jailed for a year after he admitted clocking, misdescribing cars and forging documents in a prosecution brought by Warwickshire County Council’s Trading Standards who received numerous complaints about his business practices. He admitted to arranging for the mileage reading to be wound back on an Audi TT from 101,369 to 72,299 before it was sold. He also admitted selling another Audi TT, knowing that the mileage was advertised incorrectly as 79,000, when it was actually 147,464. A mechanic he used was jailed for six months after he admitted fabricating or altering vehicle documents.
In May 2016, two Nottingham car dealers who clocked 13 cars by more than one million miles were each jailed for 15 months. The pair, who sold the cars with fake MOT certificates and service histories, were each ordered to pay £20,000 under the Proceeds of Crime Act. The case was sparked from a consumer complaint to Nottingham City Council Trading Standards. Their court case follows one in April 2016 when two brothers from Nottingham clocked cars, sold them on, often with fake MOTs, and used the bank accounts of their dead grandparents to get false tax discs. The pair were jailed for 18 months.
According to the LGA rogue car dealers and private sellers can increase a vehicle’s value by thousands of pounds by reducing the displayed mileage to make them look less well used and more desirable. For example, taking off 60,000 miles on a Range Rover Evoque or an Audi A3 increases their value by £4,000. Doing the same with a Nissan Qashqai and Volkswagen Golf increases their value by about £3,000 and £2,500, respectively.
The LGA warns that clocking can lead to safety problems, especially if a vehicle appears as if it isn’t due a service when it actually is. It could also disguise the need for a major mechanical repair, leaving buyers with a hefty bill if something does go wrong.
Cllr Simon Blackburn, Chair of the LGA’s Safer and Stronger Communities Board, said: “Car clocking is major fraud that can affect anyone who buys a used car with fake documents, and can have dangerous implications.
“Unsuspecting buyers can be duped into paying over the odds for a vehicle with false mileage and in poorer condition, which could put passengers’ safety at risk and lead to expensive repair bills.
“With incorrect mileage displayed, general servicing, which includes brake tests and oil changes, will not be carried out when it is due and may cause vehicle failure. The manufacturer’s warranty is also likely to be void if the car is discovered to have been clocked.
“With up to 1.7 million clocked and potentially dangerous vehicles on UK roads, anyone buying a second-hand car should make as many checks as they can to ensure that the vehicle is showing its true mileage.
“Clocking is harming both reputable used car dealers and consumers, and unless the proposed EU ban on mileage correction services is brought forward and made part of UK law, thousands more cars will continue to be clocked over the next two years, jeopardising the safety of cars on UK roads.
“The Government needs to address this and introduce legislation to ban the sale of mileage correction devices, which can only be fuelling the big rise in clocking.
“Trading Standards teams across the country often receive more complaints about used cars than anything else and spend time and resources helping traders comply with the law.
“But councils won’t hesitate to prosecute any car dealer or private seller who shows a blatant disregard for safety and consumer rights by clocking cars – they can face hefty fines and a prison sentence, as well as damaging their reputation.”
But it is not just “dodgy” garages selling clocked vehicles, according to consumer group LicensedTransportUncovered.com (LTU). An investigation by LTU has found hundreds of private hire, executive/chauffeur and limousine vehicles in the northwest of England operating with clocked mileage – estimated to have a minimum of 80 million miles removed from odometers’.
Uber vehicle with 114,000 miles missing from its odometer
In London LTU found multiple clocked vehicles, including one Uber driver had removed 114,000 miles from his Toyota. In another case, a Mercedes-Benz had 180,000 miles removed off the clock by a company in the passenger transport industry before a second hand car garage put it on sale for £19,850.
The vehicle was checked independently through vehicle checking service, HPICheck.com and showed a significant mileage discrepancy; however, the trader was still happy to sell the vehicle to an innocent member of the public with 40,000 miles on the odometer. According to Cap-HPI if the vehicle had its true mileage disclosed, the car would have only been worth £11,000. It’s also worth noting that the vehicle only has a record of one service at 38,000 miles, meaning the value could be even lower as there is no evidence it had been serviced throughout its life.
LTU claims to see regularly vehicles with substantial mileage removed – in the worst case 460,000 miles had been removed from one vehicle. Chris Hargreaves, founder of AngryPolicyholders.com, an investigative journalist and head of press and PR at LTU, said: “Clocking within the private hire industry has reached epidemic proportions. The 330 plus clocked vehicles we found had about 80 million miles removed, but that was just in the northwest. Across the country hundreds of millions of miles must have been wiped out.”
Mr Hargreaves believes the lease hire industry, used by many drivers or minicab operators, is turning a blind eye to the problem. “Reputable leasing companies are giving out lease agreements based on as little as 10,000 miles a year – 27.3 miles a day. In most areas a licensed vehicle has to be doing at least 1,000 miles a week to make any money. Suppliers to the industry are failing on an industrial scale to carry out even basic due diligence.”
It is clear that there are serious safety implications for members of the public who use passenger transport vehicles are immeasurable. Nick Lloyd, RoSPA’s road safety manager, said: “To ensure safe and reliable motoring, manufacturers set very specific time and mileage service intervals.
“Due to the high mileage driven by taxis, private hire vehicles and limousines, it is absolutely vital that they are serviced in accordance with the manufacturer’s schedule to ensure the mechanical safety of the vehicle. Any clocking of the vehicle where the mileage is tampered with is not only illegal but can place the driver, passenger and other road users’ lives at risk.”
Barry Shorto, head of industry relations at Cap-Hpi said: “Our valuation data conclusively shows the potential cost to dealers and motorists of the clocking problem. With clockers able to add thousands of pounds onto the value of a car, unsuspecting buyers stand to lose out, as do dealers. That’s why we advise retailers and consumers alike to conduct a vehicle history check to spot a mileage discrepancy before they buy.
“It can be almost impossible to tell a clocked vehicle just by looking at it, which makes a vehicle history check an even more vital form of protection for buyers. A clocked vehicle could be hiding serious levels of wear and tear, especially if it has been previously used as a high mileage private hire vehicle for a couple of years, meaning the additional cost of unexpected repairs or even a potentially serious safety threat to driver, passengers and other road users. An HPI Check can help protect consumers from buying a vehicle with something to hide, saving them cash and keeping them safe.”
A spokesman for Uber said: “The licensed drivers that use the Uber app supply their own cars. These cars have all been licensed for private hire and have been inspected by the local regulator and deemed safe. Cars also have to pass an MOT test every six months.”
LicensedTransportUncovered.com, head of intelligence and investigations, The Secret Squirrel, says, “We are repeatedly seeing mileage discrepancies on leased vehicles and ones that have been financed through a lease purchase or higher purchase agreement. In fact over 80 million miles have.
“These vehicles don’t belong to the passenger transport company or owner drivers whilst under these agreements and remain the property of the leasing or finance company. There is a misconception that it is not illegal to “clock” a vehicle as it only becomes an offence once the vehicle is sold-on with tampered mileage.
“This misconception is wrong. If you turn a blind eye to car clocking or are actively involved as an owner driver you are complicit in a conspiracy to defraud a leasing / finance company, insurer or manufacturer whilst that vehicle is under your control. Obviously, once the vehicle is sold-on you then commit further offences.”
The Squirrel concluded: “In the vast majority of cases where a passenger transport company own their fleet via lease or finance, clocking the odometer cannot be achieved without the drivers being complicit and agreeing to turn a blind eye. As a driver you need to consider not your own safety, but your liberty – maximum ten-year prison sentence for conspiracy to defraud up to £1 million fraud, with cases over £1m carrying a minimum ten-year sentence.”
Bill Bowling, The National Limousine Chauffeur Association (NLCA) legislation officer, said: “The NLCA believe that anyone found guilty of car clocking, especially with vehicles used for hire and reward should be automatically banned from being a private hire or public service vehicle operator or driver for life.
“It is inexcusable to put the lives of paying customers at risk for pecuniary advantage. This despicable practice should be stamped out. Would you willingly travel with an operator who clocks his cars, I think not.”
Taking on the clockers
Sometimes it can be difficult to know where to aim your anger and frustration. We talk about dodgy car dealer, rogue cab companies or individuals, but the problem of clocking has to raise major concerns about leasing deals offered in the UK. Sticking with the shocking findings of LTU it is clear that leasing companies do not consider the industry for which they are supplying these vehicles.
How many miles do you think a private hire or chauffeur vehicle would cover per annum, month, week or day? If I was to state that hundreds of vehicles under investigation on leasing deals have travelled as little as 15-45 miles per day – as low as 105 miles per week – what conclusion would you come to?
So, considering these “claimed” mileages, it’s shocking to discover that reputable leasing companies are giving out lease agreements to the industry based on as little 10,000 miles per year – 27.3 miles per day! Surely neither the vehicle manufacturers nor the leasing companies have to be in the industry to see the warning signs. In most cases a licensed vehicle has to be doing at least 1,000 miles a week to make any money. So why is any lease deal being done for less than, say, 50,000 miles pa? If any thought whatsoever was given to these transactions, the ridiculously low mileage lease deals would never be signed up. Therein lies the problem: ker-ching.
An industry insider said: “Considering an executive/chauffeur hire vehicle will cover a significant amount of miles within its lifetime in the trade, it has to raise serious concerns as to why executive/chauffeur hire programmes are being offered at such low mileages – Audi, Mercedes and Jaguar all offer 20,000 miles per annum to the chauffeur trade.
“Are leasing companies or manufacturers offering these ridiculously low mileage deals to increase sales and the turnover of vehicles before the safety of the public? You don’t have to be a rocket scientist to realise that agreements with such low mileage are unrealistic and open to abuse.
“The industry needs to up its game urgently as they risk being accused at best of being incompetent or worse complicit in the clocking of vehicles.”
And if you need further proof of the scale of the problem, licensing officials around the country are now overrun with clocked vehicles. One licensing official who didn’t want to be named, but was willing to go on record, said: “There is a major issue with car clocking within the taxi and private hire industry, an issue which is directly affecting vehicles under my control.
“Car clocking within the trade cannot be dealt with at local council level as the problem is just too big. Due to the serious safety implications posed to the public this needs to be taken seriously by the powers that be. This is a national problem that desperately needs an urgent multi-agency approach at national level before there is a serious accident or worse, a death.”
Another council said: “We are aware of car clocking within the trade, specifically companies and drivers under our jurisdiction. With resources restricted due to budget cuts we are finding it difficult to investigate these cases due to the resources needed.
“However, we take the safety of the public very seriously and will take immediate action against licensed operators or drivers using our powers under the Local Government (Miscellaneous Provisions) Act 1976, and revoke licences where operators or drivers fail to meet the “fit and proper person” test in relation to allegations of car clocking.”
Finally, the LGA highlighted to journalists in their press release that it’s not only dodgy motor traders who are being pursued and taken to court by Trading Standards for car clocking. Cheshire based chauffeur company, PCS Chauffeurs have been charged in connection with a “substantial” car clocking case brought by Warrington Trading Standards. The company, PCS Events Limited and seven individuals, including the Murphy family who own the firm appeared in court in March 2016 to deny the charges, resulting in a trial date being set for 9 January 2017.
PCS chauffeurs employs around 250 staff from their Runcorn operation, running a fleet of around 150 vehicles, predominantly Mercedes vehicles. The chauffeur company provides services to a number of blue-chip clients with their largest client being Emirates Airline.
Investigators and councils are trying to tackle the serious allegations of car clocking within the passenger transport industry, but has so far been a fragmented approach on a council by council basis. Investigators have realised that drivers play a major role in car clocking, with sources close to a number of investigations confirming a new approach. Not only are they targeting the clockers, but where staff or drivers turn a blind eye to clocking they are now building cases against them as well.
In fact, it has been claimed that drivers suspected of turning a blind eye have been put under covert surveillance, with investigators determined to hold drivers as well as operators to account, and where appropriate bring criminal proceedings against drivers.
Banning ‘mileage correction’ services is welcomed, but the only way the UK will ever tackle car clocking is for the act itself to be made a criminal offence and for those that provide leasing or PCP deals to be more proactive. One large leasing company conducted random checks on an unspecified number of vehicles returned after leasing or PCP agreements ended. They found 80 per cent of vehicles checked had been clocked, further showing the scale of the problem. Considering the ones that were not checked how many of these vehicles end up being sold-on to auctions and the public with clocked mileage on?
Finally, it is also clear that there is a misconception that selling a clocked is only when an offence is committed. This couldn’t be further from the truth according to industry experts. If you clock a vehicle you invalidate your insurance which can result in drivers of clocked vehicles being prosecuted for no insurance and any insurance claim would be fraudulent, so there’s another criminal offence. Fraud is also committed on leasing, PCP, finance, warranty, service and MoT’s all whilst you or a company lease or own that vehicle.
Turning a blind eye to clocking has to stop, and that includes those that provide vehicles and financial services to consumers.