Odometer Rollback Fraud: 5 Warning Signs
The National Highway Traffic Safety Administration estimates that more than 450,000 vehicles are sold each year with . . .
The National Highway Traffic Safety Administration estimates that more than 450,000 vehicles are sold each year with false odometer readings resulting in losses to consumers of more than $1 billion annually. Consumers facing losses from false odometer readings and attorneys looking to capitalize on statutory-provided attorney fees will look to transfer those losses to you; but, with the proper diligence you can make that job tougher.
First, be careful to record only the correct mileage on paperwork and always make sure any discrepancies are found, recorded and acknowledged in writing by the consumer. Federal law requires the disclosure of the mileage registered on an odometer to be provided on the title by the seller to the purchaser when the ownership of a vehicle is transferred. If the odometer mileage is incorrect, the law requires a statement to that effect be furnished on the title to the buyer. However, a vehicle is exempt from the written disclosure requirements if it is 20 years old or older, or a model year 2011 vehicle or older.
Other false odometer readings are the result of fraud, which is more difficult, but not impossible to avoid. Courts have found dealers liable in some instances without any showing of actual knowledge that odometer fraud has occurred. If the court determines you are liable, the court may award treble damages, punitive damages, and attorney fees, but even a favorable verdict could result in significant legal fees.
Herb Cowan of Herbie's in Austin, Texas shared his experience with an incorrect odometer reading for one of the vehicles his business had purchased.
“The title for the vehicle was accurate, but we started noticing parts were going bad, which seemed unusual based on the relatively new model year and mileage. Turns out the parts did not match the vehicle model year. After some digging, we found out the VIN and odometer reading were both incorrect, and eventually discovered the VIN had been swapped out for that of another vehicle.”
The Texas Department of Motor Vehicles recommends these steps to avoid odometer fraud:
- Ask to see the vehicle's title and compare the mileage listed on it with the value on the odometer. Inspect the title closely if the mileage notation seems obscured or is hard to read.
- Compare the mileage on the odometer with the mileage reported on the vehicle's maintenance or inspection records. When possible, also check the mileage listed on oil-change and maintenance stickers. These stickers can be found on windows or door frames, in the glove box, or under the hood.
- If the vehicle has a traditional mechanical odometer, check that the numbers on the odometer gauge are aligned correctly. If these numbers are crooked, contain gaps, or jiggle when you hit the dash with your hand, the vehicle may have been subjected to odometer tampering.
- Inspect the tires and measure the depth of the tread. If the odometer reads 20,000 or less miles, the vehicle should still have the original tires.
- Look at the wear and tear on the vehicle – especially the gas, brake and clutch pedals – to see if the wear seems consistent with and appropriate for the number of miles displayed on the odometer.
While there are steps to help dealers steer clear of odometer fraud, it is not always avoidable. In response to this, Cowan says that at his dealership, they make sure to have documentation at every stage, “at the time we purchase the vehicle, upon inspection, and when we sell it. Customer then signs the paperwork—we want to be able to show a full paper trail.”