Cash for scrap ban comes into effect - News alert

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30 May 2018
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New laws banning cash for scrap metal, designed to curb organised crime, came into effect on 30 May.

Under reforms to the the Second Hand Dealers and Pawnbrokers Act 1989 and the Second Hand Dealers and Pawnbrokers Regulations 2018, scrap metal dealers and auto wreckers are now:

  • banned from paying or receiving cash payments
  • banned from possessing or trading an unidentified motor vehicle, and
  • required to keep detailed records of all transactions involving scrap metal.

Scrap metal dealers will also be required to be registered as second-hand dealers through the Business Licensing Authority (BLA) by 1 September 2018.

This means that anyone dealing in scrap metal who is not already a registered second-hand dealer will be assessed by the BLA to determine whether they are suitable to be registered. Factors such as criminal history and previous insolvency will be among circumstances taken into account. 

Police now have expanded search and entry powers that will allow them to enter business and storage premises without a warrant if they reasonably believe that dealing in scrap metal is taking place there.

New offences have been introduced, with penalties of more than $30,000 for buying or selling scrap metal for cash.

Police will be able to issue on-the-spot fines to scrap metal dealers not adhering to the new laws, with penalties of more than $1,900.

The new laws were developed after Victoria Police and the Victorian Law Reform Commission identified that the scrap metal and vehicle recycling industries are vulnerable to infiltration by organised crime.

Consumer Affairs Victoria has worked closely with the Australian Metal Recycling Industry Association, the Victorian Automobile Chamber of Commerce and Victoria Police, to develop the reforms.