KUALA LUMPUR: The NST Focus exposé on the proliferation of vehicle repossession syndicates, backed by secret society groups that led to the birth of a black market, has prompted authorities into a concerted effort to overhaul the industry.
A pivotal meeting was initiated by the federal police's Criminal Investigation Department's Intelligence, Operations and Records Division (D4) last month, with relevant agencies involved to deliberate on the challenges and find solutions to address the menace.
Among those involved included representatives from the Domestic Trade and Cost of Living Ministry, Bank Negara, the Road Transport Department (RTD) and police departments.
Their collective stance was unequivocal: a comprehensive reevaluation and enhancement of the management of the repossession industry was imperative.
D4 principal assistant director Datuk S. Shanmugamoorthy Chinniah offered insights into the strategic plan devised to address the systemic issues at play.
ONLY 80 REPOSSESSORS NATIONWIDE
Shanmugamoorthy said one of the main issues plaguing the repossession industry was the imbalance between licensed repossession agents and job opportunities.
He said up to June 2023, the Domestic Trade and Cost of Living Ministry had issued 1,786 licences to repossessors. However, of this number, only 80 were panellists and granted the authorisation to repossess vehicles on behalf of banking institutions, leasing and heavy machinery companies.
This, he said, would force more than 95 per cent of repossession agents in the industry to work under these panellists and repossess vehicles without authorisation.
"The problem with them working under these panellists is that the repossession orders are not issued under their names, but under the panellists', meaning they don't have the authorisation to repossess the vehicles.
"Technically, it is wrong (to repossess vehicles with an order under someone else' name), but we have to help them.
"There is an imbalance of workforce and jobs in the industry. So the ministry will have to solve this issue, together with the banks and leasing companies. They need to make sure that every licence holder has job opportunities."
He said police also suggested a standardised authorisation card for repossession agents.
Shanmugamoorthy said a task force, led by the ministry in collaboration with relevant departments, would conduct a review of matters concerning repossessors.
ADDRESSING THE ABUSE OF POLICE REPORTS
NST Focus revealed that one factor contributing to the industry's growth was the manipulation of police reports by syndicates.
These reports, crafted by the syndicates and signed by loan defaulters, created a false sense of legitimacy for new buyers regarding the "legal" acquisition of the vehicles.
Admitting the issue, Shanmugamoorty said police would refine their standard operating procedures when receiving reports of repossessed vehicles.
This included ensuring the physical presence of repossessed vehicles at police stations and verifying that the identification of the individual lodging the report corresponded with the person stated in the repossession orders.
Inspector-General of Police Tan Sri Razarudin Husain has also suggested that notifications be issued to banking institutions whenever police reports are made by repossessors.
Shanmugamoorthy said a directive would be issued to police manning counters to ensure they accepted only a standardised report from repossession agents to avoid manipulation of the document.
This standardised report should have details, such as the repossession agent's name, authorisation card details and particulars of the repossessed vehicles, and it is to be filed only for banks' records.
"Loan defaulters who have their vehicles repossessed should not file any police report. Let the repossessors do it. It is their responsibility.
"We are saying this because we have discovered a few reports filed by registered owners saying that they were handing over the vehicles' ownership to the repossessors. This is wrong because the car belongs to the bank.
"Also, this is where the manipulation happens because these cars will not be sent to storage.
"Instead, they are sold to others (using the police report to convince new buyers), either as kereta jalan terus or sambung bayar.
"So that is why now we want to make sure that it is repossessors who lodge the reports, and we have suggested that notifications be issued to banks to ensure that these black markets can no longer flourish."
DISMANTLING THE BLACK MARKET CHAIN
Shanmugamoorthy acknowledged the significant scale of the black market involving repossession agents, pointing to a chain of illicit activities leading from one scheme to another.
Repossessed vehicles, he said, would be sold online. However, worn-out vehicles would be sold as second-hand parts.
Addressing online selling, he said police would seek assistance from the Malaysian Communications and Multimedia Commission (MCMC).
Police will also conduct checks on second-hand shops.
"This black market is a huge industry, and the manipulation begins with repossession, extends to theft, and ultimately may involve falsely reporting the vehicles as missing.
"Depending on the brands, some of the more expensive vehicles end up being sold online.
"So we will engage the MCMC to control the illegal selling of these vehicles.
"Sometimes, these vehicles end up in spare parts shops.
"We have the Second-Hand Dealers Act 1946, where the seller is obligated to check and record the source of the parts.
"Failure to do so can result in charges under Section 29 of the Minor Offences Act 1955."
CLEANING-UP THE INDUSTRY FROM SECRET SOCIETY INFLUENCES
In its series of reports, NST Focus also underscored the involvement of secret society organisations that supply protective stickers to be used on repossessed vehicles that were unlawfully resold.
Some of the protection stickers were also sold to loan defaulters when the repossession agents visited them to repossess their cars.
The stickers, costing between RM100 and RM2,000 per month depending on the model, served as a warning to honest repossessors to dissuade them from legally recovering these vehicles for banks.
The NST reports, said Shanmugamoorthy, had prompted these syndicates to remove these stickers from their cars.
He added that information on these stickers has been forwarded to the police's Anti-Vice, Secret Societies and Gaming Division for action.
He said the traffic police and the RTD would conduct roadblocks to check these stickers.
"My advice to repossessors is to stop it.
"Do not issue these stickers or use them anymore.
"Remove them immediately, or action will be taken under the Secret Societies Act."