New rules to curb fake listings on used-car platforms

Fraudulent listings posted on used-car platforms without the owner's knowledge are set to decrease after a revised law takes effect requiring sellers to obtain the vehicle owner's prior consent — a practice already adopted by peer-to-peer platform Karrot.

The Ministry of Land, Infrastructure and Transport said Monday that a revised Automobile Management Act and its accompanying enforcement decree will take effect Wednesday. The changes require anyone advertising the sale of another person's vehicle online — whether selling it directly or brokering a deal — to first obtain the owner's consent.

Until now, used-car platforms had no verification process requiring owner consent, meaning a vehicle could be listed for sale without the owner's knowledge. The gap allowed fraudsters to solicit upfront payments from unsuspecting buyers, leading to repeated cases of financial harm.

Under the revised law, information and communications service providers that operate used-car platforms may only carry listings for vehicles owned by a third party if the poster — who is not a licensed dealer — has obtained the owner's prior consent, and must display whether that consent was given. Violations can result in fines of up to 10 million won (about $6,650) for platform operators and up to 500,000 won (about $333) for individuals.

Karrot began verifying whether users posting used-car listings are the registered owners in late February, and has since updated its system to require additional mobile phone identity verification before a non-owner can publish a listing.

The revised law also addresses the frequent omission of key details in used-car advertisements, mandating that listings include the vehicle registration number, major specifications and optional equipment, lien and mortgage information, the vehicle inspection and condition report, employee information, and the type of transaction. Advertisements missing required information can be fined on a graduated scale across up to three violations.

"This regulatory improvement will reduce false and unauthorized advertisements in online used-car transactions and create an environment where consumers can obtain sufficient information about a vehicle at the listing stage and make informed purchasing decisions," said Park Jun-hyung, director general of the ministry's Mobility and Automobile Bureau.