A court in Columbus recently issued a ruling in a vehicle case that can help consumers with
vehicle title issues. I filed a case in Franklin County, Ohio, alleging that a dealer sold a car to my
client without disclosing that the vehicle had a salvage history notation, or brand, on the title.
One of our claims was that the dealer’s use of an unapproved power of attorney form to transfer
title violated the federal Motor Vehicle Information and Cost Savings Act.
Understanding Federal Car Title and Mileage Laws
The Motor Vehicle Information and Cost Savings Act, often referred to as the Odometer Act, has
provisions to prevent odometer tampering, as well as very specific requirements for how vehicle
title is transferred when sold. Under the Odometer Act, a seller has to disclose the mileage
reading to the purchaser either on the paper title, through electronic titling procedures, or with a
specific state-approved secure power of attorney that can only be used when the dealer does not
have the paper title in its possession.
Disagreement in the Courts on the Odometer Act
Courts across the nation have disagreed on how to interpret the Odometer Act. Some judges have
ruled that a car buyer can only sue under the Odometer Act if the dealer lies about the mileage.
Other courts have permitted buyers to sue if dealers break any of the law’s title transfer rules–
even if the mileage disclosure was accurate.
Ohio Court Allows Title Violation Claim Without Mileage Fraud
The dealer in my case filed a motion to dismiss our Odometer Act claim because we did not
allege that there was a mileage misrepresentation. I argued that the claim should not be dismissed
because the Odometer Act should be interpreted to allow suit for any violation of the Odometer
Act provisions and should not be limited to just mileage violations. The court agreed, holding
that the Odometer Act claim could proceed to trial even without an odometer misrepresentation.
This was the first time that an Ohio court had made a ruling on whether title violations could be
enforced under the Odometer Act.
How Improper Title Transfers Hurt Consumers
Allowing car buyers to sue over title transfer violations—even when the odometer is
correct—gives more protection against dealer scams. Dealers often use power of attorney forms
when they have the paper title, or use improper power of attorney forms that do not meet the
Odometer Act requirements.
When a dealer uses the wrong power of attorney form or uses one when not allowed, they can
hide important facts from car buyers. The paper title may list an insurance company as a
previous owner, which is a red flag that the car was a prior total loss and had substantial damage.
The paper title may show that a car rental company owned the car when the dealer said it was
privately owned. The paper title may reveal that the vehicle has an unpaid loan balance or has a
reconstructed/rebuilt, water damage, or lemon buyback title brand that would drastically reduce its value. The refusal to produce title could mean that the seller does not even have title, and the
car is stolen.
Why This Court Decision Matters for Car Buyers
When dealers are forced to follow the Odometer Act’s rules, many of these scams are much
harder to pull off. The cases that hold that the title transfer procedures of the Odometer Act can
be ignored without penalty gives a green light for dealers to cheat consumers. The recent court
decision in Ohio provides a powerful fraud prevention tool for car buyers when title transfer
rules are not followed.