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What is the Scrap Metal Dealers Act 2013?

In 2013, the UK government passed new legislation that was designed to make it harder for criminals to make a profit from stolen metal. That legislation was the Scrap Metal Dealers Act, and it was the result of a growing number of cases of metal theft. Before the act was passed, the number of offences related to the theft of metals was steadily rising, and at the time, there were estimated costs to the UK of around £220 million a year. It wasn't just about the cost either, because the sale of stolen metal was also negatively affecting industries such as transport, telecommunications, and power. That fast-growing trend of selling stolen metal needed action, and tougher regulations were introduced that made it much more difficult for criminals to sell metal that they had stolen. For scrap metal dealers and local scrap merchants, the new scrap metal laws meant massive changes.

Essential Scrap Metal Dealers Act 2013 guidance

The scrap metal regulations that changed in 2013 means that every scrap metal merchant must own a scrappers licence, which they get from their local authority. That licence must then be displayed. Scrap metal dealers can opt for either a site licence or a mobile collector's licence, depending on the nature of their work. Having that licence means that some basic guidelines are in place. The first is that it gives local authorities the legal right to charge for granting a licence and gives them the power to close down a scrap yard that doesn't have the necessary licences. For that local authority, it also puts some of the onus on them because they have to provide information to the Environment Agency so that the national registers of licences are kept up to date.

To stay within the law, scrap merchants have to make sure that they have seen proof of the identity of every person that sells them scrap metal, and records must be maintained by the scrap dealer of every purchase that they make. One of the most important parts of the Scrap Metal Dealers Act is that it suddenly became an offence to pay for scrap metal in cash. This means if a scrap merchant tries to buy your old car and offers to pay in cash, they are breaking the law.

Finally, the new scrap laws also granted police and local authorities the power to inspect the premises of a scrap metal dealer.

Differences in England, Wales, and Scotland

While the Scrap Metal Dealers Act 2013 affects every scrap metal business in England and Wales, it's slightly different in Scotland. There, different licencing was passed called the Air Weapons and Licencing (Scotland) Act 2015. It is the equivalent of the Scrap Metal Dealers Act, in that it makes it illegal for scrap metal dealers to pay for scrap metal in cash. It also enforces the need to keep records of every purchase and to verify the identity of anyone selling them scrap metal.

Verifying your identity when selling scrap metal

Across the whole of the UK, if you want to sell your car to a scrap metal dealer, then you need to prove your identity. So when you're selling a car to a scrap merchant, you need to have a valid photo ID that also has your current address on it. Alternatively, you can provide a proof of address using a recent utility bill alongside a form of photo ID. So your passport and driving licence are generally good examples to use, and proof of address can be either a bill in your name, a letter from your bank or building society, or even a council tax document.

The need to prevent metal theft

The Scrap Metal Dealers Act 2013 was a vital piece of legislation. Metal theft is a very serious crime, and before the Act was passed, instances of metal theft were rising. The problem with metal theft is that it becomes a more common crime whenever the price of scrap metal rises. As you'd expect, gold and silver, as well as other precious metals, were originally the target for thieves on the lookout for metal to steal, but non-ferrous metals like copper, brass, and aluminium were also very profitable for criminals to sell illegally. As global scrap metal prices continued to rise, steel and cast-iron were also targeted. For local scrap metal dealers, it was becoming a huge problem. They buy scrap metal not for its extrinsic value but for its intrinsic value because scrap metal is a highly valued raw material and commodity. As the price of scrap metal goes up, criminals, even now, look for ways to get around the laws in place after the introduction of the Scrap Metal Dealers Act. It's not just cars that they'll try to sell to a scrap dealer. Drain covers, copper wiring that you find in a building, beer kegs, statues, and even metal crosses from churches and cemeteries were common targets. Some of the most famous metal theft cases in the UK included a bronze statue of the Olympic runner Steve Ovett, which was stolen from a park in Brighton, and a set of church bells in Devon. From the copper cable next to railway lines to a statue of Henry Moore, metal theft needed to be stopped, and the Scrap Metal Dealers Act 2013 was the result.

Displaying a scrap metal dealers licence

To keep up with the guidelines stated in the new scrap metal laws, local scrap merchants not only have to have a licence from their local authority to buy scrap metal, but they also have to display a copy of that licence in all of the sites that are covered by the licence. It must be displayed prominently as well, and in a location that is accessible to the public. What they don't have to do is display a copy of their scrap metal licence in their recovery vehicles. However, most professional scrap metal merchants will carry a copy of their licence in their business vehicles. That's because if they get stopped by the police who suspect them of being an unlicensed mobile collector, they can avoid any possible delays to their workday. The British Metal Recycling Association (BMRA) recommends that all members follow this practise and advise that even if a licence is not on display in a recovery vehicle, a copy should be kept close to hand.

For mobile scrap metal collectors, the act requires some slight changes to the display of a licence. Those scrap metal collectors must have a copy of the licence issued to them by the local authority, and it must be displayed prominently in any of the vehicles that those mobile scrap metal collectors use. That licence must be visible from outside the vehicle. Mobile scrap metal collectors also have to make sure that they don't collect scrap metal from an area not covered by the local authority that issued the licence. If they do wish to extend their range, then they have to apply for a scrap metal licence from every appropriate local authority.

When it comes to displaying a licence, if any scrap metal dealer fails to follow the guidelines laid out in the Scrap Metal Dealers Act, then they can be fined up to £1000.

Confirming the seller's identity

One of the most important parts of the Scrap Metal Dealers Act 2013 is the need for anyone selling scrap metal to a scrap metal dealer to prove who they are. The scrap merchant must verify identity before they buy your old car. This is one of the most important elements of the Scrap Metal Dealers Act, as it prevents people from selling stolen metal without having their details taken so that the police can then track them down. There are clear guidelines about the forms of ID that can be used by you to verify who you are before you try to sell anything to a scrap yard. You can use any of the following forms of ID by themselves, as long as they include your full name, a photo of you, and your residential address:

  • A valid UK passport

  • A passport that's been issued by an EEA state

  • A photo-card driving licence issued by Great Britain or Northern Ireland, as long as it is valid

  • A valid UK biometric immigration document

Some versions of these documents may not have all of the necessary requirements, however, and will need to be accompanied by additional documents that contain the relevant missing info. These can be:

  • A bank or building statement

  • A credit card statement

  • A council tax demand letter or a council tax statement letter

  • A utility bill (although a mobile telephone bill is not accepted as proof of identity)

All of these documents must be no older than three months, or they are invalid. It's important that the scrap metal dealer asks you to provide these documents before they agree to buy your car or any other kind of scrap metal from you. Proof of ID is a huge deterrent for criminals, and this section of the Scrap Metal Dealers Act is critical for keeping the risk of handling stolen metals down.

Getting paid in cash when you sell scrap metal

The act is very clear on the rules regarding how you can get paid when you sell to a scrap yard. There are no situations where you can get paid cash in hand when a scrap dealer is buying from you. From scrap yards with an established location to mobile scrap metal collectors, no cash payments can be made at all, under any circumstances. However, some local scrap metal dealers get around this problem by also registering as a Money Service Business. That means that they can pay you with a cheque, and then cash that cheque for you. This is not against the law, simply because to register as a Money Service Business means meeting a lot of stringent requirements, so there is still a high level of traceability if the police need to track down a seller that they suspect has sold stolen metal.

How the Scrap Metal Dealers Act 2013 affects council tips and recycling centres

It is a legal requirement for local authorities to offer recycling facilities to residents, and that means they have been granted an exemption from the Scrap Metal Dealers Act. It is the generally accepted view that the amount of profit that a tip or recycling centre will make from scrap metal is just a small proportion when compared to the overall budget of those locations. Unfortunately, there are always people willing to break the law. Therefore, local authority enforcing agents will always check that there is no 'informal' selling or buying of scrap metal by staff at these civic facilities.

How does getting paid in cash work when selling a second-hand car?

The one big problem with the Scrap Metal Dealers Act 2013 is that the government didn't want to restrict the thriving second-hand car market, which is largely based on cash sales. Without restricting that market, there is the potential for some confusion or some loopholes that dodgy scrap yards can try to exploit. For example, you might sell your car to a scrap metal dealer in the expectation that it will be scrapped, but they might instead repair the vehicle and then sell it as a second-hand car. A very common scenario to see is a scrap yard owner buying your car under the guise of buying a second-hand vehicle, but knowing all along that they will be scrapping it. In this type of case, it often comes down to the circumstances of the sale, and whether or not a Certificate of Destruction is issued (or not). Consider the fact that you can sell a car with a valid MOT that is perfectly legal and safe to drive, but you still sell it to a scrap yard as a second-hand vehicle instead of for scrap.

There are simply too many ways for the law to be exploited when it comes to selling a second-hand car for cash, and every case of a suspected breach of this element of the Scrap Metal Dealers Act will come down to the specifics of the case. It's clearly very challenging to define scrap when it comes to paying in cash.

Has the Scrap Metal Dealers Act 2013 worked to reduce metal theft?

The last big study on metal theft in the UK was carried out in 2015, two years after the Scrap Metal Dealers Act was passed as law. The Home Office released the findings of the report, which included an analysis of what prompted the act to be written in the first place. That study highlighted the fact that between 2009 and 2011, cases of metal theft were very much on the rise, predictably so thanks to the rising price of scrap metal around the world. However, in 2012, reported metal theft cases actually dropped, thanks to a series of interventions that specifically targeted metal thieves and scrap yards that were buying stolen metal. Operation Tornado was trialled in January 2012 and then rolled out across England and Wales in September of the same year. This was the beginning of the foundation of the Scrap Metal Dealers Act, and it required all local scrap metal dealers to both request ID documentation from sellers and to keep a copy of those records for at least one year.

Then, in December 2012, scrap yards were told that cash payments were to be stopped completely. By the time the Scrap Metal Dealers Act was passed as legislation in December 2013, the cumulative series of interventions were responsible for around a 30% reduction of stolen metal offences. Between 2012 and 2013, there were an estimated 62,000 cases of metal theft in England and Wales, but between 2015 and 2016, that figure had dropped to just 16,000 cases. In 2017, that figure had dropped even more to only 13,000 cases.

Strengthening the Scrap Metal Dealers Act 2013

The BMRA (British Metal Recycling Association) have repeatedly called on the government to make the legislation stronger to act as more of a deterrent to criminals and unscrupulous scrap metal dealers. Although the government did not implement any of the requested measures by the BMRA, it's clear that there are issues with the act. The BMRA were requesting that accepting cash for scrap metal, including for cars, became its own offence, which would entail higher penalties for anyone caught being paid in cash for scrap metal. The result would be a higher fine or even serving prison time. They also suggested that police were given more power to investigate and inspect mobile scrap metal collectors, and for local authorities to make the process of applying for scrap metal licence much tougher. However, the government concluded after their review of the act that they were confident that it was working well as it was and that it had achieved the target of reducing cases of metal theft.

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