Dealer Fraud

Odometer is an instrument indicating distance traveled by a vehicle, but criminals are using various instruments to roll back the milometer to sell the vehicle at a higher price.

Odometer rollback schemes represent a high profitable car dealer fraud. In addition to an old machine with false mileage you also get a car which will most likely need more maintenance and repair, thus almost guaranteeing you a return to the car repair shop. And of course the result is more money to be paid by you. Only a low percentage of odometer fraud is executed by amateurs, usually this crime is associated with intelligent organizations or individuals who develop complicated schemes very difficult to detect and investigate. Not only the end consumers are affected by this car fraud, but also legitimate re-sellers.

Recently car manufacturers make use of digital mileage meters because they are cheaper to produce than a mechanical dashboard and easier to fit into the car as there is no mechanical speedometer cable.

Another reason for developing digital odometers was to alleviate the problem of odometer tampering. Electrical pulses in the car wiring may cause the dashboard data, which is stored internally on an EEPROM (Electrically Erasable Programmable Read Only Memory), to become corrupted due to a car accident or a simple mistake in electronics. Therefore, of course, also a tool exists to “correct” the mileage numbers who were displayed incorrectly.

Unfortunately just as quickly as the technology was developed, scam artists learned how to use it for the wrong reasons. It is similar to computer hacking, with the right software and hardware you can penetrate right into the system making the desired changes. You can purchase these tools anywhere in a car shop or online. Since digital odometers don’t have any visible moving parts they are even harder to detect than traditional mechanical odometers, so the vehicle’s condition and a detailed history report are the best clues a buyer has for determining whether clocking has occurred. Legally this service is displayed as “mileage correction”.

Generally customers need some knowledge to avoid becoming a dealer fraud victim. They need to know how to act and what to ask dealers when entering the car dealership. Here are some tips that will be rather helpful when dealing with car dealers to prevent odometer fraud.

1.    Inspect the vehicle carefully to make sure that its actual condition matches the mileage that is indicated in the odometer.

2.    If you think the vehicle you are going to buy has been repainted, search for the parts that have been replaced. Paint is sometimes used to cover the older parts, thus giving the vehicle a newer look.

3.    Look in the left door frame, as well as inside left front window, under the hood, in the glove compartment or in the trunk for maintenance and oil change/lube stickers that might contain accurate mileage information.

4.    If you consider buying a vehicle advertised or represented as part of a fleet than you should be twice careful. Be wary of these vehicles especially if the odometer shows low mileage.

5.    The numbers on the odometer gauge should be aligned properly. Misaligned or crooked numbers might be a sign of odometer tampering.

6.    Ask the car dealer to provide you with a written statement of the actual mileage disclosed on the odometer at the time of purchase. If they refuse to provide that document, you may already have a claim under the Truth in Mileage Act.

Odometer fraud is the practice of rolling back odometers to make it appear that vehicles have lower mileage than they actually do. Odometer tampering is not only illegal, but expensive. Because the buyer thinks the car has fewer miles, he/she pays more for the car - and more in insurance and repairs.

Things You’ll Need:

•    Compare the current mileage on the odometer with mileage shown on the vehicle’s maintenance or inspection records.

•    Check the tires. The car’s original tires should last for some 60,000 miles, so new tires on a car with low mileage should alert you to take a closer look.

•    Look for things that indicate the mileage of the car. Oil change reminder stickers, service receipts and warranty cards will usually have the mileage noted.

•    Have a reputable mechanic inspect the car. The mechanic should look for signs of wear on the engine, suspension and steering, as well as problems with the emissions system. These areas will show signs of high mileage.

•    Be especially alert when buying certain models. Popular models for odometer rollback include sport utility vehicles, Chevy Luminas, Ford Tauruses and Chrysler minivans.

•    Ask the DMV for the car’s title history and its previous owner’s name. You need to provide the DMV with the VIN (vehicle identification number). Reconsider buying this particular car if the title shows it was sold several times in a short period.

•    Be wary of retired, low-mileage fleet vehicles. Dishonest buyers will clean the car up, put on a new brake pedal cover, roll back the odometer and resell it for a tidy profit.

As the price of new vehicles increases, there is more and more interest in used cars and subsequently odometer tampering has become a very lucrative fraud. Here are the varieties of odometer fraud.

• False or Altered Titles – A clear title is much more valuable than a wrecked or damaged car title. This car scam occurs when a dealer purchases a high mileage vehicle and subsequently resells it with falsified, reduced odometer reading. This is accomplished simply by tampering the high-mileage figure noted or by obtaining a new automobile title with a false mileage figure before reselling the vehicle. A professional calligrapher can perform excellent quality title alterations, which are often invisible to the naked eye.

• Reassigned Titles – In most countries licensed automobile dealers are allowed to transfer vehicle titles without re-registering them. How? A car dealer’s reassignment of the title can be attached to the original title. Numerous title reassignments can accompany an original title, as well as the washed title. A car dealer may also discard the prior reassignments of title, making it difficult to trace ownership of the vehicle.

• Title Laundering – This car scam occurs when a wrecked car’s title is replaced by papers bought in another country. A car dealer discards the previous title, then registers his/her vehicle in another state with the altered odometer and assigns the title to a company, then reassigns it back to himself/herself, now having his/her car registered with the new mileage.

• Odometer Clockers – A dealer does minor labor to the car, replacing or changing the noticeable dings and dongs. Mats, gas, floor, brake pedals, tires can be replaced. A clocker turns back the odometer with common tools such as picks, wires, screwdrivers, electronic and digital tools. Cars odometers can be rolled back in masses, because a good clocker can do this job in a matter of minutes.

Odometer rollback may inflate the resale value of a high-mileage vehicle and increase repair costs down the road. Anyone buying a car checks the odometer since a vehicle’s mileage affects its value. The higher the mileage is the less you pay and vice versa. This makes tampering with the odometer rather tempting car dealers. Rolling back the odometer puts a little extra money in their pockets. Think about how much money a car dealership could make doing this. Several dishonest car dealers have been caught red handed engaging in odometer rollback scams. The dealer makes extra money and you are stuck with a vehicle that’s not as good as you thought it was.

Falsifying odometer readings can be very costly to you. The first is obvious; you will pay more than you should have for the vehicle. Another is that the maintenance will cost you more than you expected. Older cars with high mileage require frequent servicing. This is where an odometer fraud will hit you right in the pocketbook. Car repair costs add up quickly. That’s one reason dealers roll back odometers. Sometimes it’s the only way they can sell high mileage vehicles.

Odometer tampering is forbidden by state and Federal laws. In addition, law requires dealers and individuals selling cars to provide purchasers with accurate odometer information. For instance, car buyers have a right to know the full amount of miles on the odometer and must be told if that mileage reading is accurate to the best of the sellers’ knowledge. Tampering with the odometer to make it appear that a car has been driven fewer miles than it actually has is illegal. It’s also illegal to disconnect your odometer with the intention of deceiving. Disconnecting an odometer for maintaining car value is in violation of the law.

Odometer fraud continues to be a serious issue today. More than 450,000 vehicles, according to 2002 NHTSA estimate, are sold each year in US with false odometer readings.
Today almost all modern cars have electronic digital odometers which are supposed to make the tampering with the mileage more difficult. However, it turns out, that electronic odometers are even easier to roll back having a special software. So how can you discover odometer fraud?

• Check the car history records

Check the used car history report - even though it will not give you a 100% guarantee that the car is perfect, it’s well worth the money spent. The car may turn out to be not even worth a look. A car history report may help you to uncover not only the mileage rollback, but also the potential problems car might have had in the past such as accidents, flood damage, rental use, etc.

• Have a look under the hood.

There should be a paper record with mileage and date wrapped around some of the A/C lines, if the Airconditioning system has been serviced,
If the timing belt has been replaced, there should be a sticker that states when and at what mileage the timing belt has been replaced.

• Have a close look at the odometer

If the odometer is mechanical, take a close look at the digits. Are the digits straight? Do the odometer readings actually change when the car is driven? Try to look for fingerprints, scratches or any other signs of odometer tampering under the plastic cover (glass).

These are some of the tips that may help you avoid dealer fraud, however if you are already a victim of dealer fraud, don’t hesitate to contact a dealer fraud attorney in your state.

Rolling back car’s odometer to increase its resale value is one of the oldest tricks in the book but there are ways for consumers to detect this dealer scam.

Odometer rollback is harder today than it was thanks to computer technology and the availability of vehicle history reports. Some savvy individuals and unethical car dealers, however, are finding new ways to turn back the clock on the cars by rolling back their odometers and selling them for more than they’re worth.

To help consumers to detect signs of  their car’s odometer  tampering, we’ve put together a list of things to look for.

• First of all, use CarFax or AutoCheck to request a copy of the vehicle history report. This includes state registration and emission inspection data and much more.

• Examine the dashboard for scratch marks or loose screws. They could indicate that your odometer has been tampered with. However, it’s a sign of normal maintenance as well including light bulb replacement.

• If the odometer is of the older, analog variety rather than digital, then check to see if the mileage numbers are aligned. Give the 10,000 digit a careful examination.

• Pay attention whether during a test drive the car odometer sticks or not.

• Check for service stickers (tune up, oil change, etc.) that may have the vehicles true mileage. Check under the car’s hood and inside the door.

• Check the owner’s manual for maintenance records. If it appears that pages were removed, ask about it. This is a red flag.

• If you’re purchasing the car from a dealership, ask whether they have done a computer check. In case they have done, find out whether they have found any warranty records.

• Ask for a moment to look at the vehicle’s title. Look closely for signs the mileage has been altered.

• Note the title’s issue date. Was the vehicle sold soon it was issued? Be careful if it was. This is a common way curbstoners mask a vehicle’s actual mileage.

• Are there signs of wear? Check the carpet, arm rests, steering wheel, and pedals. A lot of wear could be a sign the car has more miles on it than the odometer indicates. If any of these parts look new, too new, it could be a sign the owner is trying to hide something, that is a sign of odometer fraud.

• Ask a trusted mechanic to do a vehicle inspection. The inspection includes looking for signs of odometer tampering.

One of the reasons that vehicle odometer fraud is so common today is that a lot of car buyers hear the term odometer fraud, but in fact, are not overly concerned if the numbers on the odometer have been altered.

However, there are a few important reasons why car buyers should be concerned about odometer fraud. First of all, a prospective purchaser should know that if the odometer reading on the vehicle was altered, this generally means that more costly repairs will be necessary in the future. A car which is used more often has a much greater likelihood of having mechanical problems sooner than a newer vehicle.

Another reason to avoid odometer tampering is the price of the vehicle. When the car dealer changes the odometer reading on the vehicle, the price of the car also changes and car buyers most likely have to pay more for an older car.

Odometer fraud occurs when the mileage on a used vehicle’s title and odometer are altered. Odometer tampering is illegal. The car buyer thinks the car has fewer miles and is eager to pay more for the. According to the National Highway Traffic Safety Administration odometer fraud costs buyers about $10 billion every year. There are a few ways you can detect odometer fraud, when buying a used car.

• Check the tires. The car’s original tires should last for about 60,000 miles, so new tires on a car with low mileage should alert you to take a closer look.
• Compare the current mileage with the odometer statement of the vehicle when car dealer bought the car.
• Look for things that indicate the mileage of the car. Oil change reminder stickers, warranty cards and service receipts will usually have the mileage noted.
• Always have the car inspected by a qualified mechanic. Ask the mechanic to look for wear on the engine, suspension and steering, as well as problems with the emissions system. These could be signs that the car has high mileage. The mechanic should also check if the odometer cover has been removed.
• Gather information about the car’s title history and previous owner’s name. DMV can provide you with this information if you give them the vehicle identification number (VIN). Don’t buy a vehicle if the title shows it was sold several times in a short period.

Check the vehicle over thoroughly and make sure the actual condition matches the mileage that is showing in the odometer.

If you think the vehicle you intend to buy has been repainted, look to see which parts have been replaced. Paint is sometimes used to cover older parts, thus giving the vehicle a newer look.

Look in the left door frame, as well as inside left front window, in the glove compartment, under the hood, or in the trunk, for maintenance and oil change/lube stickers that could contain accurate mileage information.

If you consider buying a vehicle advertised or represented as part of a fleet than you should be especially careful. Be wary of these vehicles especially if they have low mileage.

The numbers should be aligned properly on the odometer gauge, crooked or misaligned numbers could be a sign of odometer tampering.

Ask the car dealer to provide you with a written statement of the actual mileage disclosed on the odometer at the time of purchase. If you are not given this document you may already have a claim under the Truth In Mileage Act.