How To Prove Car Dealership Fraud

Car dealers in the United States get a bad rap. Most car dealers are honest businesspeople trying to make a living and get along during these trying economic times while providing their customers with a positive purchasing experience. There are some dealerships, however, that defraud their customers in some way. Whether it is cutting corners during important processes for the sake of cost or laziness or wholesale fraud, laws exist to protect consumers from such malfeasance and empower them to get compensation in a court of law. An auto fraud attorney can help you take on your shady dealership in court and get you the justice you deserve.

Before you can prove car dealership fraud, you need to know how exactly you were defrauded. Your auto fraud attorney needs to know this, as it can affect how they prosecute your claim. State and federal laws protect consumers from car dealership fraud of all types. Texan consumers are protected by the Deceptive Trade Practices Act of 1973, which specifically defends against unfair business practices that harm or mislead. The Act provides a legal framework auto fraud attorneys use to sue bad dealerships and get just compensation for their clients.

Odometer fraud is overwhelmingly the most common type of car dealership fraud in the United States today. Odometer fraud is exactly what it sounds like: concealing a vehicle’s actual mileage by tampering with its odometer. Dealers can then sell the vehicle for a higher price by misrepresenting the vehicle’s true mileage. This is a federal crime in the United States; the Truth in Mileage Act of 1986 codified it in federal law. Not only does odometer fraud open a dealer to criminal penalties, it can be met with civil challenges as well.

Consumers who believe a dealer sold them a vehicle with fraudulent mileage information can look for certain telltale signs that the vehicle has more road mileage than the odometer indicates. Mechanical odometers with physical numbers can exhibit crooked digits with uneven spacing, indicating tampering. Unfortunately, most modern vehicles come with digital odometers and they can be altered with inexpensive tools found online.

One way to diagnose odometer fraud is by looking for wear and tear characteristic of a higher-mileage vehicle. One sign of heavy wear is a worn brake pedal. Often overlooked, a brake pedal showing metal underneath the worn away rubber shows the vehicle has more miles on it than the odometer indicates. Worn brake pads and discs, belts, pumps, clutches and flywheels can also indicate higher miles than what the odometer shows. Another way to find odometer fraud is finding direct signs the odometer was tampered with, including missing dashboard screws, scratches on or near the instrument cluster, or fingerprints inside the cluster itself opposite of the side facing the driver.

Another way dealerships can defraud consumers is by reselling a flood-damaged vehicle without disclosing that vehicle’s status. Cars pulled from flood waters can be cleaned and resold, but floodwaters can infiltrate important components and corrode vital systems. Rotted wiring and rusted metal can seriously degrade a vehicle’s safety and put its occupants at risk. Water-damaged vehicles tend to enter the market in large numbers after a major natural disaster, often hurricanes or catastrophic floods. These vehicles should be scrapped, but unscrupulous dealers will sometimes buy these damaged vehicles at bargain prices to resell to unsuspecting buyers.

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A disturbingly frequent way nefarious dealers will defraud consumers is by selling a previously wrecked vehicle without disclosing its status to the consumer. Auto fraud attorney Andrew Ross with Allen Stewart, P.C. said dealerships are not required by law to disclose if a vehicle was in an accident unless the buyer asks the seller about known prior accidents.

“Used vehicles are primarily sold ‘as is,’ meaning the vehicle does not have a warranty,’ Ross said. “However, this does not mean that a seller can lie to the buyer if asked about prior accidents. As such, lying about prior accident damage is significantly worse.”

Ross said if the dealership lied about past crash damage when asked, or provided a falsified vehicle history, you may have legal recourse and you should contact a lawyer as soon as possible.

“The buyer’s potential claims must be brought within a certain period of time after a date determined by law,” he said. “If the buyer does not bring their claim within that time, they will be forever barred from pursuing their claims by the statute of limitations.”

Allen Stewart P.C. recently resolved such a case in favor of their client. ASPC attorney Kendra Pfeil represented plaintiff Bushra Khan, who inadvertently purchased a salvaged vehicle from Motorsports Auto Group LLC. he dealership never disclosed the vehicle’s salvaged status and falsely told Khan the vehicle’s original factory warranty still protected it. When the vehicle started experiencing mechanical problems, Khan took the vehicle to a local Toyota dealership where she learned the vehicle was, in fact, a total loss and was no longer protected by its original factory warranty.

Pfeil said Motorsports Auto Group refused to respond to the suit filed by Khan, and thus Allen Stewart P.C. obtained a default judgement for liability and damages for her. Judge Mary Murphy of the 116^th District Court awarded Khan $58,638.75 in damages after the dealership refused to respond to the suit filed by Khan. The judge also ruled the defendant must pay Khan’s attorney’s fees as well.

Other ways bad dealers can defraud consumers include spot delivery scams, incorrect credit scoring or unnecessary credit pulls. Spot delivery scams happen when a consumer finances a vehicle through the dealership under a lower interest rate only to have the dealer claim the financing “fell through” after the consumer takes possession of the vehicle. The dealer then convinces the consumer to return and sign new paperwork under different, less favorable terms.

Incorrect credit scoring scams occur after a consumer finalizes price negotiations with the salesperson. The dealership’s loan officer then tells the consumer their credit score disqualifies them from financing, or financing at a specified promotional rate. Customers either must finance the vehicle at a higher interest rate or walk away entirely.

Scams that involve more paperwork than body work can be spotted by a qualified car dealership fraud attorney. The lawyers at Allen Stewart P.C. will closely examine your purchase documents and find any and all instances of fraud, and then use that evidence to bolster your claim in court. Whether your dealership sold you a defective, high-mileage, flooded, or salvaged car, or ripped you off in other ways, they will defend you in court and get you the compensation you deserve. Don’t wait any longer, contact Allen Stewart P.C. today. The sooner you reach out, the sooner you get justice.