Blockchain could prevent odometer tampering, EU study reveals

Blockchain has been identified as one of the solutions that could help combat the unauthorised manipulation of mileage readings shown on odometers in the EU

What has happened?

The European Parliament has issued a research report that suggests that blockchain could be an effective means of combatting odometer fraud.

What does this mean?

The report, which was issued by the Directorate General for Internal Policies, says that odometer tampering is a widespread phenomenon in the EU, affecting almost all second-hand car markets.

The report highlights the technological developments and IT solutions that could help combat the problem, one solution being blockchain.

It states: "The blockchain technology currently proposed by the car engineering and electronics industry would allow downloading mileage and GPS data from vehicles, and securing it on a ‘digital logbook'."

It adds that the use of cryptography would provide users with a high level of protection, integrity, and control of data.

The study also suggests that blockchain could be supported by a "connected car" concept that allows cloud access to all relevant vehicle data in a future scenario involving automated vehicles.

Blockchain is one of three measures identified to prevent odometer tampering.

The second is a standardised common framework of reference based on international standards (ISO) and the third relates to equipping a vehicle’s electronic control units and components with specific technical solutions developed and implemented separately by individual car manufacturers.

According to the study, 10% to 50% of the cars traded in second-hand markets in the EU have had their odometers illegally adjusted and cars with rolled-back odometers account for between 30% and 40% of the total number of vehicles traded across borders.

The report blames a lack of effective co-operation at supranational level and an insufficient exchange of information on mileage readings of odometers in vehicles traded between Member States for the extent of the problem.

This tampering is estimated to cost EU car owners “several billion euros” annually.

More detail

Odometer tampering is a malpractice that involves an unauthorised manipulation of mileage readings shown on odometers.

Its aim is to create the impression that the motor of a vehicle has a lower mileage than it does in reality, which in turn leads to a higher resale price of the vehicle.

Next steps

If you want to take advantage of blockchain's huge potential and disruptive impact, while avoiding falling foul of ever-developing regulatory and legal requirements, visit our Hogan Lovells Engage Blockchain Toolkit.

Contacts
John Salmon
Partner
London

 

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