Victoria bans cash for scrap

New regulations strive to cut illegal activities and theft

The Andrews Ministry of Victoria has instated new laws that ban the sale of scrap metal for cash in an effort to combat illegal scrap dealing.

These regulations have come about as a result of a surge of vehicle thefts in Victoria, in which cars were being stolen and then simply scrapped – with disreputable recycling and dismantling yards paying cash for the stolen vehicles. 

Business involved in the scrapping and recycling of vehicles, as of 30 May this year, will now have to pay for scrap using a cheque or electronic funds transfer. This will create a traceable link between business and customer, allowing authorities to easily identify those involved.

Those dealing in scrap now also have to keep records of their transactions and register as a second-hand dealer by 1 September 2018. Substantial fines will be levied against those breaking the rules, with the penalty for buying scrap for cash alone standing at $A32,238. 

Adopting these regulations could serve to reduce the environmental impact of these end-of-life vehicles. A study by the National Motor Vehicle Theft Reduction Council (NMVTRC), published in September 2014, found that wreckers in Victoria could otherwise choose to operate without a license and dispose of fluids in any fashion without fear of reprisal – in part due to a lack of enforcement. 

The necessity to register and log transactions may consequently weed out some operating with a disregard for regulations, in conjunction with newly increased police powers. Victoria’s scrap metal licensing issues are echoed in the HVAC/R industry, which has a similarly patchwork regulatory structure that can lead to improper disposal of refrigerants at equipment’s end of life. 

The new rules also prohibit scrap dealers from buying cars on which the vehicle identification number has been damaged or removed, although there are a handful of exceptions – such as if the VIN has degraded with age, then the dealer may take it in provided no payment is made. Vehicles that are bought for dismantling can also still be paid for with cash.

Geoff Gwilym, the executive director of the VACC, said: “These tough new regulations make it that much less attractive for criminals to steal vehicles from hardworking Victorian motorists, as the ‘distribution’ loop has now been closed. 

“From now on, Victoria Police and Consumer Affairs Victoria have an audit trail available to them,” said Gwilym. “If disreputable dismantling and recycling businesses choose to make cash payments for vehicles then they are in breach of the law, and the authorities have greater powers to punish offenders.”