Consumer Law: Odometer Fraud
- What is odometer fraud?
- How can I identify odometer fraud?
- Are there any laws which protect me against odometer fraud?
- What acts are forbidden by the law?
- What should I do if I have reason to believe that I have been a victim of odometer fraud?
- Consumer links related to new car purchases
What is odometer fraud?
Odometer fraud occurs when illegal changes are made to the mileage shown on a used vehicle's title and odometer. This is usually done to mask high mileage on the late model used cars. According to the American Automobile Association (AAA) odometer fraud is a serious threat to used car buyers that can cost thousands of dollars in the frustrating breakdowns and repairs. The difference in value of an average vehicle with 30,000 miles and 70,000 miles is approximately $3, 600. When increased finance, insurance and repair costs are added, the loss to a consumer who purchases a vehicle with an altered odometer is considerable.AAA further notes that the very nature of the used car market makes it fertile territory for fraud. The vehicle can change hands several times before reaching the used car lot and fraud can happen at almost any step in the process. Unscrupulous operators can commit fraud by changing the odometer reading, cleaning the vehicle to make it appear to an untrained eye that the vehicle has been driven fewer miles and sometimes washing the title (having a new, lower mileage title issued in a state which allows this to occur).
Used cars with five-digit odometers which have rolled over can have mileage untruthfully disclosed as the number of miles appearing on the odometer ( for example, 50,000 when the vehicle has in fact been driven 150,000).
[Return to top] How can I identify odometer fraud?
Unless you are trained, you probably cannot identify if the mileage shown on the odometer is accurate. Before purchasing a used car, take it to a mechanic for an inspection. If the seller will not allow you to do so, beware.Before you decide to buy a car you want to learn as much of the history of the car as you can. Some used car dealers purposely keep their used car salesmen in the dark about the history of cars on the lot. The salesmen may not even be provided access to the title file and/or a inventory file which contain documents showing how the car was acquired. Ask to see the title to the car before you negotiate a final deal. If the seller has possession of the title, the seller is required by federal law to make mileage disclosure to you on the title. This enables you to learn the name of the previous owner (which may be important for a number of reasons), and to examine the mileage disclosure made on the title by the previous owner for evidence of alterations, erasures, or other marks.
If the seller does not have possession of the title because it is held by a lien holder, then the seller is required by federal law to make mileage disclosure to you on a power of attorney printed by means of a secure printing process. This power of attorney is essentially a title substitute. It shows the name of the previous owner along with the mileage disclosure made by him or her. Examine the title or secure power of attorney, as the case may be, carefully.
You as the buyer also sign the title or secure power of attorney, as the case may be, acknowledging you received the mileage disclosure. Do not sign this document if it contains any blanks. Also, ask for a copy. Unless a title history is acquired from the Department of Motor Vehicles(DMV), you will never see this document again. Without a copy you will not know whether it was altered after you signed it and before it was submitted to DMV.
Some dealers may attempt to disclose mileage to you on a Dealer Reassignment of Title form. You should nevertheless always insist on seeing the mileage disclosure made by the previous owner on the title or secure power of attorney, as the case may be. If the dealer refuses to show you this document, refuse to buy the car.
[Return to top] Are there any laws which protect me against odometer fraud?
Yes. In 1972 Congress passed the Motor Vehicle Information and Cost Savings Act, popularly known as the Odometer Act , which may be found at 49 U.S.C. 32701. The Nevada Legislature passed a similar law in 1973 which grants DMV the power to enforce the federal law in our state. Dealers and others who violate the law in face criminal charges, lawsuits by a District Attorney or the Attorney General to enforce the law and lawsuits for money damages by private individuals like yourself.[Return to top] What acts are forbidden by the law?Under both the state and federal Odometer Acts (at 49 U.S.C. 32703 and NRS 484.6061-6065), it is unlawful to:
- Advertise for sale, sell, use, install, or have installed, a device that makes an odometer register a mileage different from the mileage the vehicle with driven;
- Disconnect, reset, alter, or have disconnected, reset, or altered, an odometer intending to change the mileage registered by the odometer;
- With the intent to defraud, operate a motor vehicle on a street , road or highway, if the person knows that the odometer of the vehicle is disconnected or not operating; or
- Conspire with others to violate the odometer law.
Also under the federal Odometer Act, for every used car less than 10 years old a person transferring ownership shall give the buyer disclosure of the mileage of the car. It is unlawful to give a false statement in making the disclosure. If the transferor knows that the odometer reading is different from the number of miles the vehicle has actually traveled, the disclosure must state that the odometer is not the actual mileage. For example, the transferor may know that the odometer has been (a) rolled back, (b) driven with the odometer disconnected or not operating or (c) that the odometer reflects mileage in excess of its mechanical limits (rollover).
It is also unlawful for a dealer to accept a mileage disclosure unless it is complete. In other words, it is unlawful for a dealer to accept a title or power of attorney containing blanks (for mileage, signature, date of transfer, name of transferor, identity of vehicle, etc.).
[Return to top] What should I do if I have reason to believe that I have been a victim of odometer fraud?
You have several options if you believe that you've been victimized by odometer fraud. You can report the dealer to the Bureau of Enforcement of the Nev. Dept. of Motor Vehicles (Reno) at 688-2440. You can file complaint with the Consumer Affairs Div. of the Nevada Dept. of Business and Industry (Reno) at 688-1800 or1-800-326-5202 . You may also complain to the Bureau of Consumer Protection of the Nevada Atty. General's Office (Carson City) at 687-6300.You may also file a civil lawsuit for damages against the dealer. Under both the federal and state Odometer Acts you may recover three times your actual damages or $1,500, whichever is greater. See 49 U.S.C. 32710 and NRS 484.6068. You may also have a claim for punitive damages. You must sue no later than two years after your claim arises. You may also recover attorneys fees and court costs. You may sue in either state or federal court.
Once you suspect that you have been victimized by odometer fraud you should contact an attorney promptly. If you do not know an attorney or cannot afford one you may contact:
Washoe Legal Services, Inc.
650 Tahoe Street
Reno, Nevada 89509
(775) 329-2727
FAX: (775) 324-5509[Return to top] Consumer links related to consumer fraud
The following web sites may provide additional information or assistance regarding consumer law:American Bankruptcy Institute (ABI) Consumer Information Center
http://www.abiworld.org/consumer/A.htmlBetter Business Bureau
http://www.bbb.org/Consumer Law Page (Alexander Law Firm)
http://consumerlawpage.com/Fair Debt Collection (FTC)
http://www.ftc.gov/bcp/conline/pubs/credit/fdc.htmNational Association of Consumer Advocates (NACA) Home Page
http://www.naca.net/National Consumer Law Center
http://www.consumerlaw.org/[Return to top]