Odometer Fraud

Odometer fraud is a type of consumer fraud with an estimated consumer loss of more than $1 billion annually. The National Highway Traffic and Safety Administration (NHSTA) also reports that car buyers unknowingly buy more than 450,000 vehicles with altered odometer readings each year.

Odometer fraud is a serious crime carrying penalties of up to a $1 million fine and prison time.

This article covers key information on odometer tampering, including

• How the law establishes liability
• Associated crimes
• What to do if you suspect odometer tampering
• Getting legal help if you believe a dealership or seller has committed odometer fraud

See FindLaw's Buying a Car section for more information and guidance on the vehicle buying process.

Odometer Fraud Defined

Odometer fraud is more common in used car sales as opposed to new car and new vehicle sales, despite used car lemon laws.

Both federal and state laws prohibit odometer tampering. While each state has its own statute, federal law prohibits disconnecting, resetting, or altering a vehicle's odometer with the intent to change the number of miles indicated.

When you're buying a vehicle, the seller must issue a written disclosure of the mileage registered on an odometer to the purchaser. If the odometer mileage is incorrect, the law requires the seller to furnish a statement to that effect on the vehicle title. This applies to used car dealers as well.

For example, California law requires car sellers to complete a Vehicle/Vessel Transfer Form (REG 262) and declare the correct mileage on the title. However, if the vehicle is over 10 years old, the seller is exempt from providing any written disclosures or disclaimers regarding mileage.

How Odometer Fraud Happens

These are a few ways car sellers commit odometer fraud. It occurs when a car dealer or seller alters or “rolls back" the odometer of a car before reselling it to a buyer.

Scammers attempting to sell consumers "newer" cars with high mileage at a higher purchase price do so by resetting the odometer. Sellers mask signs of normal wear-and-tear by reconditioning or detailing many outward appearances of long-term use on the vehicle.

Another way odometer fraud occurs is online or through classified advertisements. A seller buys a high-mileage vehicle, resets the odometer, and then attempts to resell it on popular sites like Craigslist or eBay.

It's not always the seller who commits odometer fraud. Some car owners attempt to roll back their odometers to cheat on their warranties or evade mileage penalties on their car leases. Either tactic can void your manufacturer's warranty, along with other penalties.

Odometer tampering is just one form of auto dealer fraud. Dealers also engage in fraud by using bait-and-switch tactics, add-on concealment, charging above the advertised price, and other deceptive practices.

Odometer Rollbacks and Associated Crimes

Odometer fraud crimes occur as part of a larger criminal operation that can span across states. Some common crimes associated with odometer tampering can include:

• Conspiracy
• Mail or Wire Fraud
• Counterfeiting
• Forgery (title)
• Money Laundering
• Other types of auto fraud, like curbstoning (misrepresentation of vehicle ownership or reselling a used vehicle for more than its worth)

Remedies and Penalties

Those who commit odometer fraud face criminal penalties. The law penalizes those convicted with fines of $10,000 per vehicle and up to three years in prison. Sellers can also lose their dealer's license, among other consequences.

For example, New Jersey's statute states that the Department of Motor Vehicles can revoke the license of any motor vehicle dealer's license due to an odometer fraud conviction.

Federal law also affords consumers the right to civil remedies against scammers. Civil penalties include treble damages or $1,500 (whichever is greater) and actual damages.

Avoiding Odometer Fraud

The best way to avoid odometer fraud is to do your research. Before signing the sales contract, check the vehicle history report through a reputable platform like CARFAX or AutoCheck.

Familiarize yourself with common car advertising scams to help you recognize red flags during the sales process. For instance, if the monthly payment seems to good to be true, there's a good chance it is.

For resources and information specific to defective vehicles or lemons, see FindLaw's Lemon Law Basics section.

What To Do if You Discover Odometer Tampering

There are ways to enforce your consumer rights if you suspect odometer fraud with your recent vehicle purchase.

First, check the vehicle's documentation. Look for odometer discrepancies on the sales contract and the title. Examine the odometer for signs of tampering, like scratches or other marks. Compare the odometer reading with the mileage listed on the vehicle's documentation. You can also consult a mechanic you trust to assess the odometer and inspect the vehicle.

If you find discrepancies, contact the seller or dealership and ask for an explanation. If you are unsatisfied with the seller's response and still suspect fraud, you can:

• Make a fraud report with the Federal Trade Commission (FTC)
• File a complaint with your state's consumer affairs agency or attorney general's office
• Report a scam and file a complaint with the Better Business Bureau (BBB)
• Report the suspected fraud to local law enforcement

If your issue remains unresolved, you may want to contact an attorney with experience in consumer law. An attorney can review the details of the car sale to determine if you have a fraud claim. If so, they can advise on the next best steps and advocate for a fair legal remedy.

Find Legal Help With Odometer Fraud

If you've noticed signs of odometer tampering with your recent car, truck, or motorcycle purchase, professional legal help is available. Use FindLaw's Attorney Directory to find a skilled consumer protection attorney in your area.

An attorney can help can help you gather evidence to support your claim, including reviewing contracts and consulting experts. They can also negotiate with the seller for appropriate compensation and, if necessary, represent you in a civil lawsuit.