ACTAC plans major drive to counter mileage fraud across Arab World

Sulayem to tell Vienna General Assembly action is needed at regional level to fight illegal activity costing consumers billions US$ each year

Dubai, UAE, 3 November, 2014:  The Arab Council of Touring and Automobile Clubs (ACTAC) is to launch a major effort to counter the problem of mileage fraud which affects  up to 40% of used cars and costs consumers in the region billions of dollars each year.

Proposals, which include urging all Arab countries to take stronger legislative action against the widespread practice of  illegally lowering the mileage of a car, go before the ACTAC General Assembly in Vienna tomorrow (Tuesday, 4 November).

Discussions will centre on a mileage fraud policy guide by the Fédération Internationale de l'Automobile (FIA), of which ACTAC is a sub-region, and which will be circulated to all 24 FIA member clubs in the 18 Arab speaking countries. 

“Artificially lowering the mileage of a car today is a simple, cheap manipulation, which allows for the inflation of a vehicle’s value, in most cases by several thousand dollars,” said ACTAC Chairman Mohammed Ben Sulayem, the FIA Vice President.

“Countries go about addressing the issue in many different ways, allowing fraudsters to exploit the situation. In the EU, national approaches of single member states have shown that setting up national mileage databases merely shifts the problem to neighboring countries. 

“ACTAC, therefore, believes that further action should be pursued at a Pan Arab level, in a region with more than 300 million people and 1.7 million new car sales every year.” 
ACTAC says a coordinated international effort is needed to implement a series of measures that include:

• Encouraging all Arab States to consider the manipulation or tampering of an odometer as an offence and effectively enforce their legislation.
• Preventing tampering technically through revising type approval legislation or getting a voluntary commitment of the vehicle manufacturing industry in the Arab world.
• Setting up a Pan Arab electronic platform to exchange mileage data – in compliance with data protection legislation – making mileage data broadly available to Arab citizens buying motor vehicles, in particular cross border.
• Supporting specific campaigns by the ACTAC clubs and the respective Arab Member States aiming to raise citizens’ awareness about this issue when buying a used car.

ACTAC says awareness campaigns should drive home to consumers the message that up to 40% of used cars have tampered odometers.

The proposals, and a detailed background on the growing problem of mileage fraud, are contained in the FIA policy guide which ACTAC will now circulate to all member clubs, including the Automobile and Touring Club of the UAE, and national governments. Studies have shown that most tampering occurs when vehicles are still fairly new, largely before their first periodical technical inspection.

Currently, the mileage history of used cars is almost untraceable and prosecution for mileage fraud is extremely rare, especially when crossing national borders.

The Arab consumer pays the price, facing unforeseen and accelerated depreciation on cars with tampered odometers. They also face higher maintenance and repair costs. Furthermore, odometer tampering means cars may not receive the servicing and maintenance they require.

A 2010 study found that in Benelux, France and Germany, financial damage from mileage fraud amounts to €1.4 - €2.8 billion (US$1.76bn-US$3.53bn) annually. Cross-border trade was particularly affected, with 30-40% of all used cars being manipulated. 

Applying these figures to the entire EU puts it at a staggering €5.6billion - €9.6 billion (US$7.09bn – US$12.16bn), but ACTAC estimates that the pro rata impact in the 18 Arab countries it represents is higher than in Europe.