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How to Avoid Odometer Fraud and What to Do if It Happens to You

by | Mar 30, 2022 | Dealer Fraud |

Odometer fraud is still a common occurrence, despite the switch from analog to digital odometers. With the increase in price and scarcity in used cars, dealerships are now taking more chances and selling more vehicles with rolled back and tampered odometers on their lots.

The federal Motor Vehicle Information and Cost Savings Act, more commonly known as the federal Odometer Act, provides monetary recovery for victims of odometer fraud in the amount of $10,000 or three times actual damages.

How does odometer rollback happen?

Dishonest repair shop and car lots alter odometers by connecting to computer modules in the car or replacing the entire instrument panel without proper disclosure. Private car owners accomplish the fraud through devices that roll back or freeze odometers purchased on the internet for less than $300.

Why are odometers rolled back?

Consumers will pay more for low mileage vehicles, so unscrupulous car lots tamper with the odometer to sell cars for a higher price. Private individuals roll back odometers before lease turn in to avoid excess mileage charges on leases, which can easily add up to over a thousand dollars. Private vehicle owners will also roll the odometer back to keep the mileage under warranty for an expensive repair.

Why does odometer rollback matter?

It is clear that a vehicle with a large odometer rollback has travelled more miles and has more wear and tear, decreasing the value of the vehicle. Unfortunately, even a minor rollback of the odometer can still have serious consequences. A vehicle manufacturer will refuse to perform any warranty repairs if any odometer rollback is detected, regardless of whether that rollback is 400 miles or 40,000 miles. Service contracts or extended warranties often cost $1500-3000, but almost every service contract or extended warranty is void if an odometer discrepancy is found.

Once a vehicle owner learns that the odometer was rolled back, they must disclose this to the next purchaser to avoid liability under the federal Odometer Act. This means the innocent owner who bought a vehicle in good faith without knowledge of a rollback will lose money on resale when they have to disclose the rollback.

Detecting odometer fraud

The best way to detect odometer fraud is to obtain a vehicle history report, but this is not foolproof. A vehicle history report will list the mileage reported at previous sales and service. Previous mileage readings higher than what is currently on the vehicle is an indicator of odometer tampering. Dealerships are not obligated to provide a free history report, but if a dealership advertises free vehicle history reports and then claims that it can’t give you a report because the computers are down, the printer is broken or some other excuse, walk away. That almost always means there is odometer fraud or some other negative information on the history report.

Used cars

If buying a used car, check the glove box and owner’s manual. Service records from the previous owner and handwritten service notes in the back of the owner’s manual should show higher mileage if there was a rollback. Look for inspection stickers on the windshield and oil change stickers on the windshield or door jambs, as these often list mileage.

An additional source of information is your internet browser. Just type the full Vehicle Identification Number into your internet search bar. If there are any previous ads for the vehicle, look to see what mileage was listed in those ads.

What happens if you don’t know who tampered with the odometer

The individual, dealership or repair shop who changed the odometer reading is liable for odometer tampering, but it is often difficult to determine who rolled the odometer back. Even if you find that company or individual, they may be in another state and difficult to sue.

The federal Odometer Act, however, does not limit liability to just the person who tampered with the odometer. Anyone who makes a false statement on an odometer disclosure with intent to defraud when selling a vehicle is liable, regardless of whether they tampered with the odometer.

Fighting back against dealership defenses

Dealerships often claim when confronted with odometer rollback that they didn’t tamper, so they are not responsible, but that is simply not true under the Odometer Act. A seller can’t just write down whatever number is on the odometer if the prior owner told them the mileage was rolled back, a lower odometer was announced at the auction where purchased, or the maintenance or service history showed a lower number if service was performed at that dealership or a dealership for the same manufacturer as the selling dealer. If a dealership knew or should have known that the odometer was rolled back but didn’t disclose that on the odometer disclosure statement, they still violated the law and are liable.

A dealership that truly did not suspect that the odometer was incorrect is generally not liable under the federal Odometer Act for failing to disclose a rollback, but they may still be responsible under other laws. If the dealership represented that a vehicle was sold with the balance of the manufacturer’s warranty or a service contract, and the warranty or service contract is invalid due to odometer rollback, the dealership can be liable for breach of warranty.

Odometer fraud cheats consumers by leaving them with vehicles worth far less than what they paid. Attorney Christina Gill Roseman at Roseman Law Firm at 800-745-5259 and or via email fights for the rights of consumers ripped off by odometer fraud.