Recognizing Common Auto Fraud Scams 

Auto fraud affects thousands of American consumers every year. One of the most prevalent forms of auto fraud, odometer fraud, continues to grow throughout the United States. The National Highway Traffic Safety Administration (NHTSA) estimates more than 450,000 vehicles sold every year contain odometers showing false mileage information. This fraud keeps consumers from knowing their vehicle’s true mileage and how much wear and tear the vehicle’s endured. The vehicle’s mileage helps determine the vehicle’s resale value, and thusly false readings obscure the vehicle’s true value. As such, state and federal authorities consider odometer fraud a major crime – one punishable by both fines and potential prison time.

Inexperienced car buyers can easily miss signs of odometer fraud but knowing what to look for ahead of time can help avoid becoming an auto fraud victim. Though criminals try and hide evidence of their work, those in the know can spot signs of odometer fraud. Misaligned numbers on the odometer or irregular spacing between the numbers gives away an altered odometer. Older, physical odometers can be rolled back by hand. This can misalign the numbers on the odometer, showing it’s been tampered with. Other more general signs include mismatches between the odometer reading and the car history report.

Traditional odometers worked mechanically and can be rolled back with mechanical tools. Signs of tampering were easier to spot: crooked numbers with uneven spacing were a dead giveaway the odometer was messed with. Many think modern digital odometers are more secure, however they can be tampered with just as if not more easily. Bad actors can easily purchase tools for modifying or falsifying digital odometer readings for roughly $100 online.

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. If you see a used car on the lot with relatively low mileage but it’s on brand new tires, or the brake pedal is worn down to the steel, think twice about buying it: it might not be what it seems.

Another sign of auto fraud many overlook is the service sticker on the inside of the vehicle. Many auto shops and oil change garages 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.

Digital odometers are just as easy to tamper with as older mechanical odometers. In some ways, they can be even easier to modify. Digital odometers are easier to alter with tools criminals can purchase online for less than $100. Criminals 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.

Major floods or hurricanes can beget a different kind of fraud: flooded car frauds. Flooded cars (specifically, cars pulled from flood waters) can eventually be cleaned and resold, but internal flood damage lingers within the vehicle and can wreak havoc on important components. Flood water can rot wiring and corrode internal systems, making a vehicle a rolling death trap. Hurricanes and other natural disasters often generate many flooded vehicles that should be scrapped, or at least sold with titles branding them as flooded or salvaged vehicles.

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.”

Ross recommends getting any damage you suspect occurred before purchase verified by a third party mechanic and getting an estimate for the repair cost. He also recommends ordering a CARFAX vehicle history report as well.

Before purchasing a used vehicle, consumers should check the vehicle’s VIN online to find detailed information about the vehicle that the seller either didn’t know, or didn’t want to disclose. There are several websites, some paid and some free, that can 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 consumer who suspects odometer fraud should immediately notify their insurance company and, if they are financing their car, their finance company or bank. Soon after they should contact a qualified, licensed attorney to help pursue an odometer fraud case in court to recoup any losses.

American consumers have the right to see a vehicle’s historical mileage record on demand. 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.

If you believe your car has more miles than the odometer lets on, or you think your dealer lied to you to sell you the car, contact Allen Stewart P.C. today. Contacting a lawyer is the single most important step you can take for the health of your claim, and the attorneys of Allen Stewart P.C. have many years of successfully standing up for their clients in and out of the courtroom. They will work with you every step of the way and keep you updated throughout the lifespan of your claim. The sooner you reach out, the better your chances of success.