Odometer rollback fraud is an illegal scam used by unscrupulous car dealers to inflate the price of their pre-owned vehicles. Because mileage is a good indicator of a car’s wear and tear, a late model car with 20,000 miles recorded on its odometer commands a higher price than the same make and model with 50,000.
But a used car buyer doesn’t need to be a fraud victim. With a little detective work, a savvy shopper can spot the telltale signs of odometer fraud and avoid buying a lemon car.
How Car Dealers Commit Odometer Rollback Fraud
Whether a vehicle’s dashboard has a mechanical, analog odometer (the traditional kind with numbers printed on a gauge with rotating adjacent cylinders) or an electronic digital odometer, there are various ways a skilled mechanic can commit odometer fraud by rolling back the miles shown on the odometer to make a preowned vehicle appear “younger” than its actual age. It’s just one of the many types of auto dealer fraud.
Types of Odometer Fraud
- The used car’s original odometer can be replaced with a new one.
- A mechanical odometer’s housing can be opened, and the cylinders manually rotated backward.
- A digital odometer’s mileage reading can be altered or reprogrammed with software that’s widely available online.
How to Spot Odometer Rollback
There are various ways a potential used car buyer can detect the signs of odometer fraud:
- Visually examine the easily accessible parts of the car that show wear and tear (seats, floor mats, gas and brake pedals, tires) and make a rough judgment about whether their signs of wear are consistent with the car’s purported mileage
- Pay particular attention to the tires since a low mileage car should still have its original tires; not brand-new ones
- If maintenance or inspection records are available, compare the odometer’s mileage with the vehicle’s miles recorded at the time of each service
- If those records aren’t available, or if the car’s maintenance booklet is either missing entirely or has pages ripped out, that’s a red flag that the dealer is attempting odometer fraud
- Don’t forget that oil change and maintenance stickers are sometimes placed on door frames, windows, or under the hood; a dishonest dealer may forget to remove them
- If the vehicle has an analog odometer, carefully look for oddly spaced numbers, cylinders that jiggle easily, or a scratched or dented panel
- If the dealer hasn’t provided a vehicle history report, order one online at a site like Carfax or AutoCheck.
Odometer Rollback Violates State Law
State laws treat odometer rollback as a serious matter, and the commission of such fraud violates at least two statutory categories:
Vehicle Title Laws
If the seller knows that the odometer does not accurately reflect the vehicle’s actual mileage (for example, if the odometer was replaced or reprogrammed at some point prior to the sale), then they are required to disclose that fact to the buyer.
If a vehicle seller enters false mileage information based on a rollback on an odometer disclosure form or the vehicle’s title document, the state can charge the seller with a crime and require payment of a fine.
Consumer Protection Laws
Pennsylvania, New Jersey and New York each have a consumer protection, consumer fraud or unfair trade practices law that prohibits the sellers of consumer goods, including motor vehicles, from committing fraudulent, deceptive or dishonest acts in their transactions with purchasers.
A victim of odometer rollback can make a claim against the dishonest car dealer under the state consumer protection laws and recover damages. This is usually measured as the difference between the inflated price paid for the vehicle and its actual fair market value.
Damages can include the increased insurance premiums and finance charges related to buying a higher priced car. The fraud victim can require the dealer to reimburse the attorneys’ fees paid to pursue the claim.
If the vehicle buyer can prove that the car dealer willfully and knowingly committed odometer rollback fraud, he or she may be entitled to three times the actual damages incurred (so-called treble damages) plus reimbursement of attorneys’ fees.
Depending on the circumstances, a dishonest auto dealer that violates consumer protection laws can be charged with a crime.
Odometer Fraud Violates Federal Law
In addition to the various state law violations, odometer rollback fraud raises issues under two federal laws.
Magnuson-Moss Warranty Act
The Magnuson-Moss Warranty Act gives consumers a right to claim damages against sellers who breach the written or implied warranties associated with the products they sell.
Depending on the state’s law that applies to the vehicle sale, the dealer’s misrepresentation of the vehicle’s mileage could qualify as a breach of either a written limited warranty or an implied warranty.
The buyer can claim damages based on the difference between the car’s inflated value from the fraudulent lower mileage figure and its reduced value using the actual, higher mileage.
The Magnuson-Moss Warranty Act also permits a defrauded consumer to seek reimbursement of attorneys’ fees.
Federal Odometer Act
Tampering with an odometer for the purpose of rolling back a vehicle’s mileage and defrauding buyers violates the Federal Odometer Act.
In addition to being subject to federal felony charges, the dishonest car dealer can be sued by the odometer rollback victim for the following:
- Three times the defrauded buyer’s actual damages or $10,000 (whichever is greater)
- The buyer’s attorneys’ fees
Need to Discuss an Odometer Rollback Claim?
Robison Lemon Law Group represents the purchasers of pre-owned vehicles who have been victimized by odometer rollback fraud. We have years of experience pursuing car dealer fraud claims and a proven track record of recovering significant compensation for our clients.
To discuss a potential odometer rollback claim, call us at 833.422.7529 or contact us online to schedule a free consultation.