P8_TA(2018)0235

Odometer manipulation in motor vehicles: revision of the EU legal framework

European Parliament resolution of 31 May 2018 with recommendations to the Commission on odometer manipulation in motor vehicles: revision of the EU legal framework (2017/2064(INL))

(2020/C 76/18)

The European Parliament,

— having regard to Article 225 of the Treaty on the functioning of the European Union,

— having regard to Article 91(1) and Article 114 of the Treaty on the functioning of the European Union,

— having regard to Directive 2014/45/EU of the European Parliament and of the Council (1),

— having regard to Directive 2014/47/EU of the European Parliament and of the Council (2),

— having regard to Commission Regulation (EU) 2017/1151 (3), Regulation (EC) No 661/2009 of the European Parliament and of the Council (4), Commission Regulation (EC) No 692/2008 (5) and Regulation No 39 of the Economic Commission for Europe of the United Nations (6),

— having regard to its resolution of 10 December 2013 on CARS 2020: towards a strong, competitive and sustainable European car industry (7),

— having regard to the European Parliamentary Research Service (EPRS) study from November 2017 entitled “Odometer tampering: measures to prevent it” (8) and its accompanying European Added Value Assessment “Odometer manipulation in motor vehicles in the EU” (9),

— having regard to the final report of the Association of European Vehicle and Driver Registration Authorities entitled “Vehicle Mileage Registration” (10),

— having regard to the Commission’s “Consumer Market Study on the Functioning of the Market for Second-Hand Cars from a Consumer’s perspective”,

— having regard to Written Declaration 0030/2016 of 11 April 2016 on combating mileage fraud in the second-hand car market,

— having regard to Rules 46 and 52 of its Rules and Procedures,

— having regard to the report of the Committee on Transport and Tourism (A8-0155/2018),

Current situation

A. whereas odometer tampering, namely the malpractice of deliberate and unauthorised altering of the real mileage of a vehicle shown on its odometer, is a serious and widespread problem throughout the Union, especially in the context of cross-border trade, and harms third countries which import second-hand cars from the Union;

B. whereas the economic profit of odometer tampering can be remarkable given the low prices of the equipment needed and the artificial increase of the value of the used cars; whereas studies estimate the share of tampered vehicles to be between 5 and 12 % of used cars in national sales and between 30 and 50 % of cross-border sales, accumulating to a total of between EUR 5,6 and 9,6 billion in economic damage in the Union;

C. whereas the number of kilometres driven is one of the most important parameters on the basis of which a buyer can assess the technical condition of a vehicle, and whereas the mileage reading has a significant impact on a vehicle’s market value;

D. whereas odometer readings are stored and shown digitally, while external access for the purpose of reconfiguration is easy as the protection level of odometers is lower than that of other components in the vehicle;

E. whereas odometer tampering harms consumers, second-hand car dealers, insurers and leasing companies, while financially benefiting those who commit this fraud, and technical solutions must be found in order to make it more difficult for non-professionals to tamper with odometers;

F. whereas the increased wear and tear on cars with odometers that have been tampered with, negatively affects road safety; whereas buyers of such cars can face more than expected maintenance and repair costs because the cars are not inspected on the basis of their real mileage;

G. whereas cars with odometers that have been tampered with, can show higher consumption and higher pollutant emissions than expected, thus violating durability requirements of the type approval legislation;

H. whereas the second-hand car market in the Union, which is two to three times larger than the market for new cars, has the lowest consumer trust among goods markets according to the Commission’s Consumer Markets Scoreboard – 2014 (11) and odometer tampering contributes significantly to the loss of consumer trust in second-hand dealers and thus distorts the functioning of the internal market and fair competition;

I. whereas consumers are not sufficiently informed about possible ways of preventing the manipulation of odometer readings in second-hand cars and about existing techniques for monitoring mileage and preventing fraud in this area, and ways of gaining access to those techniques;

J. whereas many Member States are still failing to provide consumers with the necessary tools that would enable them to verify the history of a used vehicle;

K. whereas mileage fraud disproportionally affects social groups and geographical areas with lower income, exposing customers in the Member States which acceded to the Union in or after 2004 and in countries in the immediate vicinity of the Union (particularly Western Balkan countries into which second-hand cars are imported from the Union duty free or subject to an insignificant amount of duty) to a higher risk of buying a car with manipulated odometer and thus they are more often harmed by that malpractice;

L. whereas in the absence of a common, integrated system for exchange of information between Member States, there is an increased risk of legalising a mileage reading already manipulated before its initial verification in the country in which the car will ultimately be registered and where there are already measures to register the vehicle and verify its mileage;

M. whereas tackling odometer fraud by swiftly establishing uniform rules to prevent manipulation will fundamentally enhance security and certainty in the cross-border purchases of vehicles hence reducing the scale of unfair practices and also bringing substantial benefits to millions of consumers in the Union;

Existing measures addressing odometer fraud

N. whereas some Member States have already introduced instruments to minimise odometer manipulation like “Car-Pass” in Belgium and “Nationale AutoPas” (NAP) in the Netherlands; whereas both those Member States use a database collecting odometer readings at every maintenance, service, repair or periodical inspection of the vehicle, without collecting any personal data, and both have almost eradicated odometer fraud in their domains within a short timeframe;

O. whereas the Belgian system is operated on the basis of law by a non-profit organisation and the system in the Netherlands is run by a government agency; whereas both systems operate at a reasonable cost and their success is accompanied and fostered by awareness and information campaigns as well as a strong legal framework establishing clear rules and dissuasive penalties;

P. whereas the significantly higher number of manipulated cars in countries without access to those databases shows that cross-border data exchange and cooperation between Member States are crucial to their success;

Q. whereas the European Car and Driving Licence Information System (Eucaris) already provides infrastructure and organisation for the exchange of harmonised data related to transport between Member States’ authorities and is used by all Member States to fulfil obligations under Directive 2011/82/EU of the European Parliament and of the Council (12) while its functionalities already include mileage recordings;

R. whereas there are also technical solutions, both regarding hardware and software, that could be integrated into vehicles by manufacturers and thus prevent odometer manipulation from the start, whereas “Hardware Security Modules” (HSM) and “Secure Hardware Extensions” (SHE) are already used to protect electronic control units (ECU) in vehicles against unauthorised access, manipulation or car theft and their cost per vehicle is estimated at one euro;

S. whereas Regulation (EU) 2017/1151 obliges manufacturers, in order to obtain type-approval for a vehicle, to implement systematic tamper-protection strategies and write-protect features to deter reprogramming of odometers, also taking account of remote data exchange features; whereas it only requires information and explications provided by the manufacturer and does not foresee any testing if the odometer is tampering proof while there are certified and internationally recognised processes, such as the Common Criteria for Information Technology Security Evaluation; whereas internationally recognised processes such as the Common Criteria (ISO/IEC 15408) can help safeguard against tampering;

Legislation and loopholes

T. whereas odometer manipulation is prohibited in 26 Member States but only ten Member States have additional measures to verify the mileage available to customers and only six recognise odometer manipulation as criminal offence (13); whereas the hardware and software used for tampering with odometers are freely available in the Union and that is not classified as a criminal offence and whereas more Member States are on the way to criminalising activities connected with the illegal manipulation of meter readings;

U. whereas odometer fraud represents a threat to roadworthiness, which is also referred to in Directive 2014/45/EU, which requires Member States to impose effective, proportionate and dissuasive penalties on such manipulations; whereas the Commission should further examine the feasibility of connecting national platforms in order to allow the cross-border exchange of information on roadworthiness which include odometer readings;

V. whereas Directive 2014/45/EU contains the obligation to record mileage readings during the periodical technical inspection (PTI) and makes these recordings available for the subsequent PTIs, but only addresses mileage recordings during roadworthiness tests from the first roadworthiness inspection onwards; whereas the first PTI might occur as late as four years after the first registration of the vehicle, leaving enough time for odometer manipulation before the first inspection as well as between inspections and might even result in an official recording of an incorrect mileage;

W. whereas neither Directive 2007/46/EC of the European Parliament and of the Council (14) and Commission Regulation (EC) No 692/2008 on type approval, nor Regulation No 39 of the Economic Commission for Europe of the United Nations (UNECE Regulation 39) refer to mileage fraud or tamper-proof odometers; whereas Regulation (EC) No 661/2009 refers to UNECE Regulation 39 regarding approval requirements for speedometers but does not provide for requirements with regard to, or the essential characteristics of, odometers;

Future development in the automotive sector

X. whereas the automotive industry has made huge progress in developing and producing vehicles that are connected, use ITS and communicate with their environment so that most cars entering the market are already capable of connectivity features thus progressively moving towards a connected car fleet on roads in the Union;

Y. whereas, according to various surveys, the average age of cars on roads in the Union is 7 to 11 years and is constantly increasing, while in the Member States which acceded to the Union in or after 2004, cars are far above average age, resulting in a fleet that consists of newer, highly connected cars and older cars without any connectivity features;

Z. whereas modern vehicles already regularly send datasets to manufacturers including actual mileage and total operating time delivering key data for the verification of mileage record plausibility;

AA. whereas blockchain technology could be one solution for future odometer data storage;

AB. whereas CarTrustChain is a successful project on how to use blockchain technology to eliminate odometer fraud that was co-funded by the European Regional Development Fund;

1. Requests the Commission to submit, on the basis of Article 91(1) and Article 114 of the Treaty on the Functioning of the European Union (TFEU), a legislative framework that requires Member States to create legal, technical and operational barriers in order to make odometer manipulations impossible, following the recommendations set out in this resolution and in the Annex hereto, within a timeframe of twelve months after the adoption by Parliament of this resolution; calls on the Commission to review the statutory requirements of Regulation (EU) 2017/1151;

2. Calls on the Commission to ensure that the same legal and technical barriers are also applied to imports from third countries;

3. Welcomes technical solutions such as HSM and SHE, which are already widely used to protect sensitive data in cars, and underlines the fact that odometer readings should enjoy the same level of protection in order to prevent odometers from being manipulated;

4. Calls on the Commission to strengthen type approval for in-car security, especially for the technical measures against odometer fraud but also in light of the increase of connected cars;

5. Welcomes that the Commission included requirements on technology security for odometers in Regulation (EU) 2017/1151; points out however, that there are no provisions on how to monitor these requirements and therefore calls on the Commission to establish clear criteria for effectively checking the safety of odometers, to adjust those requirements if necessary, within the shortest timeframe possible, and to report to Parliament about the effectiveness of that Regulation;

6. Notes that national solutions using databases of frequent odometer readings from PTI, garage visits and other vehicle inspections achieved great success in fighting odometer manipulation in the respective Member States, and therefore proposes that those Member States that have to date failed to act accordingly should establish appropriate solutions as quickly as possible;

7. Emphasises in this regard that all Member States should have national registers and engage in the cross-border exchange of data from those registers, since that is the only way in which mileage fraud can be tackled efficiently in the Union; therefore calls on the Commission to propose a legislative framework for Member States to set up comparable and mutually compatible national data collection mechanisms, based on existing best practices, that will provide frequent and reliable mileage data collection starting at the time of a vehicle’s first registration, and to allow for international exchange;

8. Stresses that cross-border access to odometer readings should be possible and that easy access to that information by a buyer of a second-hand vehicle would be a major contribution to consumer protection; underlines the fact that a buyer of a second-hand vehicle should be able to verify the accuracy of its odometer reading, regardless of the Member State in which it was previously registered; calls on the Commission and the Member States to inform consumers and stakeholders, in a proactive manner, about existing measures against odometer fraud and about ways in which to detect and prevent odometer manipulation;

9. Stresses that Eucaris offers an existing infrastructure for cost-effective exchange of odometer readings across the Union based on a database solution; regrets that in 2017 only Belgium, the Netherlands and Slovakia made use of the Eucaris platform to exchange information on odometer readings and therefore encourages Member States to participate in exploiting the opportunities provided by this system;

10. Calls on the Commission to make participation in Eucaris mandatory and to implement it as a vehicle information platform thus facilitating mileage verification throughout the Union with a view to reducing the possibilities for odometer manipulation;

11. Regrets the fact that the electronic register provided for in Directive 2014/45/EU has not yet been established and that Member States’ penalties are not dissuasive enough, as a result of which the data exchange objectives have not been met;

12. Calls on the Commission to provide for a legal framework enabling the Member States to register mandatory odometer readings from PTIs, from each inspection, service, maintenance operation and repair carried out, and from other garage visits, starting with the vehicle’s first registration;

13. Emphasises that a blockchain-based solution could be more cost-effective and calls on the Commission to conduct a cost-benefit-analysis for this solution within twelve months of the adoption by Parliament of this resolution, including security, transparency and protection of data; stresses that, until the potential uptake of this technology effective easy to use and rapidly operational solutions, in particular databases, should be implemented without delay;

14. Stresses that wider application of advanced cryptographic technologies, such as HSM or SHE based solutions, could provide additional protection against odometer manipulations, protecting odometers from non-authorised access by way of secured chips;

15. Emphasises that vehicles have become increasingly capable of connectivity and that this development will continue, thus allowing to automatically feed odometer data into a database or a blockchain network; welcomes the automotive industry’s efforts to develop a variety of technical safeguards against odometer tampering including data encryption, data protection and security but also calls on manufacturers to further improve the effectiveness of their technical solutions;

16. Highlights that all measures involving transmission and storage of data should follow the European data protection acquis , only be practiced for preventing odometer manipulation and with the highest level of cyber protection;

17. Calls on the Member States to create or amend legislation on odometer manipulation in order to make it a criminal offence – including the provision of hardware, software and the related services required for unauthorised manipulation – since tampering leads to the incorrect assessment of vehicle roadworthiness and thus has a negative impact on road safety; calls on the Member States to provide sufficient human and financial resources for the effective, non-discriminatory and proportionate enforcement of such legislation;

18. Believes that swapping a vehicle odometer for one with a lower mileage reading should be considered to be vehicle mileage fraud if the aim is to conceal the real mileage and thereby make a profit;

19. Requests the Commission to submit, on the basis of Article 91(1) and Article 114 TFEU, a proposal for an act on measures tackling odometer manipulation, following the recommendations set out in the Annex hereto;

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20. Instructs its President to forward this resolution and the accompanying recommendations to the Commission and the Council.

(1) Directive 2014/45/EU of the European Parliament and of the Council of 3 April 2014 on periodic roadworthiness tests for motor vehicles and repealing Directive 2009/40/EC (OJ L 127, 29.4.2014, p. 51).

(2) Directive 2014/47/EU of the European Parliament and of the Council of 3 April 2014 on the technical roadside inspection of the roadworthiness of commercial vehicles circulating in the Union and repealing Directive 2000/30/EC (OJ L 127, 29.4.2014, p. 134).

(3) Commission Regulation (EU) 2017/1151 of 1 June 2017 supplementing Regulation (EC) No 715/2007 of the European Parliament and of the Council on type-approval of motor vehicles with respect to emissions from light passenger and commercial vehicles (Euro 5 and Euro 6) and on access to vehicle repair and maintenance information, amending Directive 2007/46/EC of the European Parliament and of the Council, Commission Regulation (EC) No 692/2008 and Commission Regulation (EU) No 1230/2012 and repealing Commission Regulation (EC) No 692/2008 (OJ L 175, 7.7.2017, p. 1).

(4) Regulation (EC) No 661/2009 of the European Parliament and of the Council of 13 July 2009 concerning type-approval requirements for the general safety of motor vehicles, their trailers and systems, components and separate technical units intended therefor (OJ L 200, 31.7.2009, p. 1).

(5) Commission Regulation (EC) No 692/2008 of 18 July 2008 implementing and amending Regulation (EC) No 715/2007 of the European Parliament and of the Council on type-approval of motor vehicles with respect to emissions from light passenger and commercial vehicles (Euro 5 and Euro 6) and on access to vehicle repair and maintenance information (OJ L 199, 28.7.2008, p. 1).

(6) Regulation No 39 of the Economic Commission for Europe of the United Nations (UN/ECE) — Uniform provisions concerning the approval of vehicles with regard to the speedometer equipment including its installation (OJ L 120, 13.5.2010, p. 40).

(7) OJ C 468, 15.12.2016, p. 57.

(8) http://www.europarl.europa.eu/RegData/etudes/STUD/2017/602012/IPOL_STU%282017%29602012_EN.pdf

(9) http://www.europarl.europa.eu/RegData/etudes/STUD/2018/615637/EPRS_STU%282018%29615637_EN.pdf

(10) https://www.ereg-association.eu/media/1122/final-report-ereg-topic-group-xiii-vehicle-mileage-registration.pdf

(11) https://ec.europa.eu/info/files/consumer-markets-scoreboard-2014-edition_en

(12) Directive 2011/82/EU of the European Parliament and of the Council of 25 October 2011 facilitating the cross-border exchange of information on road safety related traffic offences (OJ L 288, 5.11.2011, p. 1).

(13) See European Consumer Centers Network (ECC-Net, 2015), Cross-border car purchases: what to look out when you’re bargain hunting, p. 236.

(14) Directive 2007/46/EC of the European Parliament and of the Council of 5 September 2007 establishing a framework for the approval of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles (Framework Directive) (OJ L 263, 9.10.2007, p. 1).