Auto Fraud Prevention Tips for Buyers: Red Flags to Watch Out For

Every year, thousands of Americans inadvertently purchase vehicles with odometers that might not be entirely accurate. Odometer fraud continues to worsen in the United States, with the National Highway Traffic Safety Administration (NHTSA) estimating more than 450,000 vehicles sold every year contain tampered odometers. These odometers keep consumers from knowing how many miles the vehicle has actually traveled, which is often the best metric for determining wear and tear – and thusly, the vehicle’s value. This makes tampering with an odometer a form of fraud and is prosecuted as such.

Consumers looking for a new-to-them car should keep their eyes peeled for signs showing the car they’re considering has more miles than it seems. Despite fraudsters’ best efforts, there are often telltale signs a car has seen more time on the road than the odometer indicates. By knowing and spotting these signs before you sign on the dotted line, you can save yourself hours of headaches and potentially thousands of dollars.

Older, physical odometers can be rolled back by hand. This can misalign the numbers on the odometer, showing it’s been tampered with. Misaligned numbers on the odometer or irregular spacing between the numbers gives away an altered odometer. Other more general signs are mismatches between the odometer reading and the car history report. The single most telling sign of odometer tampering is if the car shows more visible wear than a vehicle with similar mileage and a confirmed accurate odometer. Often overlooked signs of wear include brake pedals showing more metal than rubber, replaced spark plugs, brake pads or calipers, and depending on the total mileage, whether the vehicle still has its original tires.

One sign of odometer fraud many overlook is service stickers on the inside of the vehicle. Many service stations and oil change technicians place stickers inside the vehicle somewhere indicating at what date or mileage the vehicle should return for its next service. A particularly bumbling fraudster may leave these records in the vehicle somewhere, exposing the vehicle’s true mileage for the consumer to see.

Many think digital odometers are more secure than physical ones, but that’s not the case. Digital odometers are easier to alter with tools criminals can purchase online for less than $100. Fraudsters can access the odometer digitally and flashes the chip controlling it, changing the mileage to something lower. Other methods include removing and replacing the odometer chip with one from a compatible vehicle with lower mileage, resoldering the new chip onto the circuit board. Other methods involve connecting devices to the vehicle’s on-board diagnostic ports to alter the odometer reading, eliminating the need to remove the odometer entirely.

Consumers can check their vehicle’s VIN online to find detailed information about the vehicle that the seller either didn’t know, or didn’t want to disclose. hese sites will not only show you the vehicle’s reported mileage, but also if the vehicle was involved in a reported crash or flood. Either can cause major problems for the vehicle owner in the future.

A vehicle’s historical mileage record must be provided to consumers when they ask for it. This is shown on the vehicle’s odometer disclosure statement, which the federal Truth in Mileage Act (TIMA) requires all vehicle vendors provide at the time of sale. It’s one of the many forms consumers sign when buying a vehicle; this one states how many miles are on the vehicle as a matter of legal record. The federal law requires such disclosures for all passenger vehicles, pickup trucks, motor homes, motorcycles, and trucks with a Gross Vehicle Weight Rating less than 16,000 pounds that are less than ten years old.

The law allows exceptions for certain vehicles including vehicles 20 years or older, vehicles with Gross Vehicle Weight Ratings over 16,000 pounds, snowmobiles, all-terrain vehicles, vehicles that are not self-propelled, or in the case of a title transfer in which at least one of the registered owners is staying the same, except when the title submitted is from out of state.

The law changed on Jan. 1, 2011, making vehicles 20 years old or older exempt from odometer disclosure statement requirements. For example, a 2011 model year vehicle won’t be exempt from odometer disclosure until 2031.

Rolling back an odometer, whether it’s an electronic odometer or older analog odometer, is a federal crime. Odometer fraud convictions can include fines up to $10,000 for each violation, with each altered odometer counting as a separate instance. A conviction also opens the perpetrator to civil lawsuits from anyone to whom they sold a tampered vehicle, with the law allowing damages three times the number of actual damages or $10,000, whichever is greater. Those found guilty of odometer fraud can also be sentenced to three years in federal prison.

Both state and federal authorities aggressively pursue odometer fraud cases. One notable odometer fraud case occurred in April 2021 when two Texas men pleaded guilty to conspiracy to make false odometer statements and commit securities fraud.

The U.S. Department of Justice issued a statement saying the two men, 61-year-old Nepthali Luna and 36-year-old Devon Luna of San Antonio admitted to selling high mileage used vehicles with incorrect mileage readings on the vehicles’ odometers titles and odometer disclosure statements. Court filings show the younger Luna purchased high-mileage vehicles and then caused those vehicles to show false, lower mileage before selling them for inflated prices.

The Lunas admitted, according to the DOJ statement, to selling 225 vehicles with “rolled back” odometers resulting in consumer losses surpassing $550,000. Nepthali Luna faces a maximum sentence of five years in prison, while his son Devon faces 10 years for securities fraud and three years for making false odometer statements.

If you think your vehicle has more mileage than the odometer says it does, take your vehicle to a trusted garage and ask them to check. If they confirm odometer tampering, you should immediately notify your insurance company and, if you are financing the vehicle, your bank or financing institution. You should also reach out to a qualified odometer fraud attorney as you can likely pursue an odometer fraud claim and get compensation either in or out of the courtroom.

State anti-fraud laws exist to protect consumers and give them the tools they need to get compensation through the legal system. Texas consumers, for example, are protected by the Texas Deceptive Trade Practices Act (DTPA). The act, signed into law in 1973, allows consumers to fight back against false or misleading business practices and get compensation for damages. These malicious practices can include odometer tampering or odometer fraud.

If you think you have a case of odometer tampering on your hands, contact the offices of Allen Stewart P.C. today. Our auto fraud attorneys have the knowledge, skills and experience to fight for justice on your behalf and get you the compensation you deserve.