Privacy gone mad? Finance industry balks at new vehicle law

A new law comes into effect on 1 April 2011 restricting access to the Motor Vehicle Register. Andy Shand, CEO of Fair City Finance questions whether this increase in privacy comes at the cost of our rights as consumers.

"It puts the brakes on information.  Currently anyone can look up, for free on www.carjam.co.nz, all general motor vehicle information such as make, model, year, engine size etc, for any vehicle registered in New Zealand."

To find out the current owner and ownership history, whether the vehicle has been reported as stolen, or whether the odometer is suspicious, one must pay money to the NZ Transport Agency or Carjam. From 1 January 2011 the NZ Transport Agency is stopping the provision of the free information.

From 1st April next year access to personal details, held on the motor vehicle register, will be restricted because of concern that public access was being abused by people such as direct marketers or criminals. Personal information will still be available for law enforcement, maintaining national security, collecting fines, and the administering transport law and policy.

Some organisations, such as car dealers and finance companies, may be prepared to satisfy the Ministry of Transport requirements and pay a $1,000 application fee so they can continue to get personal information for specific reasons. Anyone else wanting access to names and addresses held on the register for other reasons must make an Official Information Act request to the New Zealand Transport Agency (NZTA). The public will be able to confirm ownership/registration on a yes/no basis by matching the numberplate and the correct name of the supposed owner.

Will the amendment cause problems?

“I think so!” says Fair City Finance CEO Andy Shand. “With 55,000 illegally sold vehicles occurring each year1 , we believe verifying ownership and ensuring the vehicle is dept-free, is essential. To buy a car, or lend money on a car, there may be a problem finding the exact owner. eg: Is it Antony Smith or Anthony Smith? Buying on Trade Me will be difficult without knowing the seller. Registration does not prove ownership. True ownership will be much harder to prove.”

Currently, if there is suspicion of fraud one can go back to the previous owner, but from 1 April 2011 no history will be available. There is a big difference between a 2-owner car and a 10-owner car. Currently one can follow through the mileage progressively with each owner. However, speedometers can be replaced (was it faulty?), wound back, be genuinely miss-recorded or even disconnected for a period. Will people be able to tell how long the current owner has had the vehicle for? One would look carefully at ownership of only two weeks. Was the car faulty? Is it an unreported theft? A prospective purchaser, buying privately, often relies on the finance company to do the research. Useful information will no longer be available.

Legislation creates unnecessary road blocks

“Some finance companies and car dealers are wondering whether this new legislation has gone too far”, says Mr Shand. “It’s a bit like a parent not allowed access to children's school reports, or medical reports where the child/friend has diminished capacity to give informed consent. We do know that between year 2000 and 2009 public service staff increased from 46,000 to 70,000 full-time equivalents. Perhaps some of them have been employed to think of answers to problems that do not exist.

What problems were there? The whole motor vehicle database has been available for people to use for direct marketing purposes. People with three-year-old Mazdas must be due for a new one. Rules could simply have been altered to put restrictions on the use of this database. Stolen identity or stalking? I am yet to hear of somebody's identity being stolen from the MVSR or of young ladies with Porsches being pursued through the MVSR. This must make them feel doubly safe.”

“These changes will become just another tax on the public, who will be unnecessarily charged for what is now free. It will put barriers in the way of people going about their perfectly legitimate business buying or selling cars. A case of a sledgehammer being used to crack a nut? Was there a nut in the first place?”

About the Author: Loan expert Andy Shand is CEO of Fair City Finance. His 30+ years of expertise in the lending industry has helped thousands of people achieve their personal goals through car loans and personal finance. You can contact him at Fair City Finance on 0800 340 350 or at loans@faircity.co.nz


1 In 2003 the Ministry of Consumer Affairs prepared a discussion paper on the Review of Consumer Information Standards (Used Motor Vehicle Regulations) 2003 highlighting problems with security interests and illegal sales and pointing out the importance of motor vehicles in the lending industry. To quote: “Motor vehicles are frequently used as a security interest. Every year there are more than 250,000 debts registered on vehicles. At any one time, there could be 255,000 debts hidden on past plates. In addition, each year there are 23,000 vehicles stolen and 55,000 vehicles sold illegally. These figures suggest a large part of the used vehicle market involves the sale of vehicles with security interests.”