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Texas Auto Dealer Fraud Laws

Owning a vehicle can be one of the most liberating feelings in the world. The possibilities are endless once you have two or four wheels of your own. You can take road trips, drive to work, take the kids to soccer practice, or go on long shopping trips to your local grocery store to finally buy in bulk. Yet, sometimes things can go awry when purchasing a car or motorcycle. Texas auto dealer fraud laws are meant to protect consumers from deceptive and unlawful practices by dealers at any stage of the process. Below you will find key information about bait and switch, disclosure laws, odometer tampering, and much more.

Texas Bait and Switch Laws

A bait and switch scam occurs when a car dealer advertises a car in a newspaper, on television or radio, or online intending to lure the customer into the dealership based on an exceptionally priced car (the “bait”), and then gets the customer to purchase a similar car that is a better deal for the seller (the “switch”). This can also happen if the dealer advertises the car, knowing they actually don’t have it in stock. Penalties can include:

  • Actual damages
  • Three times the amount of actual damages if the advertiser acted intentionally
  • Injunction
  • The return of money or property acquired by the unlawful advertising
  • The cost of reasonable attorney’s fees and costs of the person suing, if you win the lawsuit

Odometer Tampering

Odometer tampering is more common than you might think and it happens in dealerships as well as private sales and car auctions. Odometer fraud is the illegal act of changing or altering the mileage readings on a car, truck, or motorcycle to make it appear to have a lower total mileage. There are a number of remedies available to you if this happens and the auto dealer may also be subject to criminal penalties.

Lemon Laws

You might have heard the phrase, “that car is a lemon!” Texas lemon laws protect consumers from unknowingly purchasing or leasing a new motor vehicle that develops a defect or condition that substantially impairs the motor vehicle’s use, market value, or safety. Car dealerships are required to make proper disclosures if a vehicle has been returned as a "lemon." Keep in mind; you will need to file your complaint with the Texas Department of Motor Vehicles (DMV). Speak with an attorney or review the lemon law section of the DMV’s Website.

Texas Auto Dealer Fraud Laws: The Basics

Below you will find relevant details about Texas deceptive practices and automobile dealer fraud laws. As always, if you have specific questions, it is best to contact a local attorney to learn more about Texas law and your options.


Who May Bring a Lawsuit

Remedies Available

  • Attorney General can seek a court order prohibiting further deceptive practices
  • Private citizens can seek civil compensation for damages caused by certain specific acts and practices listed in the DTPA.

Types of Lawsuits a Consumer May Bring (Depending on Circumstances)

Examples of Auto Dealer Fraud

  • Odometer Rollback;
  • Selling a salvaged or flood-damaged vehicles without disclosing to consumer;
  • New dealer returns (passing off a used car as “new”);
  • Undervaluing a car trade-in;
  • Concealing the cost of add-ons during the negotiation and purchase process (such as an warranty);
  • Bait and switch.

Federal Remedy

Note: State laws are always subject to change through the passage of new legislation, rulings in the higher courts (including federal decisions), ballot initiatives, and other means. While we strive to provide the most current information available, please consult an attorney or conduct your own legal research to verify the state law(s) you are researching.

Research the Law

Speak with a Texas Consumer Protection Attorney

Odometer tampering, deceptive trade practices, bait and switch scams – the list goes on and on. If you feel you’ve been deceived by a car dealer, you’ll likely want to know you rights and get compensated for any injuries you have received as a result. Consult with an experienced Texas auto fraud attorney today to learn more.

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