Dealer cheats pinched

The bust is one of the biggest in the second-hand car industry in South Australia.

Among those caught by Consumer and Business Affairs last month were a brother and sister who used false identities to run a backyard dealership. Staff at various used-car yards - including one large dealership - were also discovered selling vehicles privately without warranties or a cooling-off period.

This is in breach of laws that require anyone who sells at least four vehicles in 12 months to be licensed, provide a cooling-off period, deposit refund and a warranty for cars worth more than $3000.

Minister for Business Services and Consumers John Rau said the man's sister was also “engaging in similar activities with other licensed dealers” who “must have known” of the couple's dodgy dealing.

The crackdown also uncovered instances of licensed dealers selling cars to staff members, who then on-sold them to the public without a licence.

“It appears licensed dealers wanting to dispose of unwanted stock found this method more profitable than wholesaling cars or sending them to auction,” Mr Rau said. “These practices are illegal and dealers could face losing their licences, and we are working with the Motor Trade Association to stamp it out.”

He said the crackdown was “a warning for dodgy dealers who tarnish the reputation of the vehicle sales industry's reputation”.

He said the investigation involved data matching and analysis of suspicious transactions. Consumer Affairs Commissioner Paul White said the investigation of illegal second-hand car rackets served as a warning for other unlicensed dealers. He said “investigations are continuing” into the cases.

“This has been a significant operation, one of the biggest second-hand dealer investigations carried out by CBS,” Mr White said. No charges have yet been laid. The maximum penalty for trading unlicensed is $100,000.