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Operators terminate VESA membership

With effect from 12th May 2004 the three major vehicle tracking and recovery companies (Matrix, Netstar and Tracker) have resigned from the Vehicle Security Association of South Africa (VESA).

They account for about 95% of the market and were members of VESA’s stolen vehicle tracking and recovery (SVR) sub-committee, which was established chiefly at the request of the insurance industry to provide an independent and unbiased body to approve and monitor operators according to set standards of quality and service.

Explains MD of Netstar, John Edmeston, “The end objectives were not only to enable insurers to rely confidently on the service provision by approved operators, but to protect the consumers against ‘fly by night’ operators who may not be properly structured to provide an appropriate service and their consequent demise.”

To achieve the objectives certain approval criteria acceptable to the insurance industry were laid out by VESA and continued compliance of approved SVR systems was monitored. Essentially, the criteria outlined that an SVR operator must demonstrate through a reasonable number of installations and real stolen vehicle recoveries that the system was capable of functioning within industry norms and that the organisation remained viable.

Pierre de Clerk MD of Tracker, says the process sufficed for a number of years, but the approval criteria had since drawn criticism from potential new entrants to the SVR market. “They believed that the criteria were anti-competitive.” In response, the matter became subject of long-standing discussions and review. “But it is our opinion that no satisfactory alternatives have yet been identified, and so we have terminated our membership.”

The tracking companies say they do not want to be associated with any ‘anti-competitive behaviour.’ In the absence of meaningful regulations for approval, they believe it is preferable to have the market decide for itself which SVR operators to support. Any dilution of the criteria for VESA approval merely to accommodate the allegations of anti-competitive behaviour will not provide any protection to either the consumer or the insurance industry.

Hence, the original objectives of establishing the SVR committee is no longer valid.

In the meantime, the SA Insurance Association says it is confident that the resignations were not as a result of the tracking companies failing to meet the VESA standards, “but rather as a result of difficulties with the structure and approach of VESA.”

Explains SAIA’s Caroline da Silva, “The association has been holding discussions with the tracking companies and other VESA members as well as VESA itself, in an effort to resolve various issues.

“In the interests of insured clients and potential customers, we recommend that insurers continue to approve Tracker, Netstar and Matrix systems on an interim basis, despite their resignation from VESA, until such time that these issues are resolved, or alternative approval mechanisms are put in place.”

The SAIA anticipates that these discussions or alternative initiatives could take as long as three months and trusts that members will support the SAIA in its efforts to resolve these difficulties.

Comments Mr Edmeston, “Netstar fully supports the objectives of maintaining a healthy and viable SVR industry and the provision of a high quality and effective service to consumers and insurers. At this stage we believe that to remain a member of VESA SVR imparts credibility to the approval system that it can no longer justify in terms of diluted approval process.”