Editorial | Cheating consumers and skewing the market

Criminality skews markets because it undermines legitimate businesses and erodes confidence in fair practices if left unchecked.

This is why the authorities have a duty to act fast and hard on reports that two used car dealerships tampered with the mileage of imported vehicles from Japan.

The revelations, first made in MaltaToday, showed how the racket was facilitated by the lax controls adopted by at the Valletta port and at Transport Malta.

For starters, tampering with a vehicles odometer is a criminal act as is the forgery of Japanese inspection certificates presented to the transport regulator at the point of registration. These are crimes that have to be prosecuted and it would be a big let-down if this fraud on a massive scale – hundreds of consumers have been cheated – is not punished appropriately.

But investigations must also focus on sins of omission by TM officials to determine whether this was the result of incompetence or bribery.

This racket could have been easily uncovered by the authority had the paperwork presented by the dealers when registering the cars been cross-checked with the JEVIC online database. JEVIC is the Japanese company that issues the certificate of inspection while the vehicle is still in Japan and includes the mileage at point of export.

By not cross-checking the paperwork with the database, Transport Malta became complicit in this fraud because it eventually gave its stamp of approval for the vehicles to be put on Malta’s roads with the tampered mileage.

Another problem flagged in the news report was the lack of proper inspection at Grand Harbour where the police officer filling in the paperwork leaves the mileage field empty to be filled later by the dealer.

These loopholes, intentional or not, have allowed these rogue traders to scam consumers with impunity.

An overhaul of the administrative control systems is required to ensure consumers are protected from rogue traders, as Opposition spokesperson Adrian Delia said. But this must not come at the expense of criminal action against the two dealers.

The criminal acts perpetrated by these two second-hand car dealerships have not only cheated consumers but also skewed the market.

Criminality creates an uneven playing field that harms businesses operating by the book. Second-hand car dealers who were importing similar vehicles from Japan but with lower mileage were paying more to acquire them unlike the rogue dealers. The margin of profit the bona fide businesses had was much lower than that enjoyed by the fraudsters, who could then sell their tampered vehicles at a cheaper price in Malta and still make a healthy profit.

This leader has often remarked on the need for enforcement, coupled with prosecution in cases where businesses go rogue. Complacency and attempts to ‘arrange’ things will only create an environment of impunity that fosters further abuse.

This is why investigations in this case must come down hard on the traders and if need be on public officials who aided and abetted, willingly or unwillingly, this racket.

And this does not even start to look at the potential environmental damage that has been caused by second-hand cars that are much older than they were actually marketed.