The Consumer and Competition Authority (CCA) estimates that complaints against imported used car dealers account for at least 90 percent of the grievances it receives from the public, underlining the troubles facing the sector.
Mmegi is informed that the Authority, which by law handles the protection of consumer rights, is even now engaged with a handful of cases involving about half a million Pula.
The latest data emerged this week as the CCA engaged with the Financial Intelligence Agency (FIA) and other authorities including the Directorate of Intelligence Security in a damning report exposing not just tax evasion in the car dealership industry but also money laundering and a litany of other vices.
The report, produced by a multi-sectoral team led by the FIA, estimates that more than a hundred offences with a value of P60 million were picked in the five year period between 2017 and 2021, involving various underhanded deeds by players in the car dealer industry and their partners in the public sector.
While the FIA, BURS and other law enforcement agencies step up their crackdown on the sector in order to improve compliance, the CCA is escalating its awareness programmes to better protect consumers who continue to fall victim to some dealers.
In many cases, unscrupulous dealers defraud consumers by taking their money and falsely promising to buy them vehicles in Durban. Other complaints revolve around vehicles being delivered below the quality promised by the dealer or being sold with significant undeclared defects.
“We are currently trying to come up with strategies to deal with these issues because we realise that Batswana are being defrauded and the economy is also being short-changed,” the CCA’s director of investigation, policy and research, Ernest Bagopi told a multisectoral workshop held by the FIA on the latest report on Wednesday. “We really struggle to resolve some of these cases and this report will help the Authority to start dealing with some of the issues that have been difficult,” he said.
In a recently published alert, the CCA noted the rising cases it was receiving and said it had discovered that most of the fraudsters involved were not properly licensed under the country’s trade laws.
“The fraudsters obtain money from unsuspecting consumers, by giving the impression that they would supply the required vehicle(s) at an agreed time. “The motor vehicle is either not supplied at all, or if is supplied, it has huge defects. “Consumers have been deceived into paying sums of money either as a deposit, or at times even the full cost to kick start the process of securing and delivery of the required vehicle(s). “During investigations, the CCA is unable to locate these fraudsters because they do not have legitimate documents to trade, and do not even have places of operation,” the Authority said.
Richard Harriman of the Consumer Watchdog told Mmegi that complaints about second-hand cars are “very common” with several received every week.
“Most of the complaints we receive about car dealers are about the quality of the cars people buy,” he said. “They're very often unreliable, break down very soon after delivery and consumers are often left completely unsupported by the dealers. “The dealers often say they offer either no warranty or a very short period when they'll take care of any problems.”
Harriman said the common issues leading to the complaints is the lack of history about the cars on sale.
“Very often they're imported and I know from some legitimate dealers that many shady dealers change the mileage on these imports, hiding their true history,” he said.
Harriman advised Batswana intending to buy vehicles to only stick with dealers who are trustworthy, who can produce company registrations and whose companies are actually registered with the Copyright and Intellectual Property Authority.
“Don't accept a vehicle, no matter how old, unless the dealer offers a warranty, even if it's just a short one. “Above all, always get an expert to check any second-hand car you buy before you sign anything or pay. “If you don't have the skills, ask a mechanic you know. “Finally, never pay cash. Always insist on paying by bank transfer. “A car dealer who only accepts cash is trying to hide something from you and probably from BURS as well,” he said.