VEHICLE ODOMETER FRAUD JEOPARDIZES SAFETY . . .
AND POCKETBOOKS

When we think about car safety we usually consider the obvious features – seatbelts, air bags, brakes, rear view visibility. But some less obvious equipment, like a vehicle's odometer, can be just as important.

Making sure your new cars are safe is certainly a big part of our safety mission at the Department of Transportation. But within the National Highway Traffic Safety Administration’s Office of Odometer Fraud Investigations, DOT professionals are working hard to protect the safety and wallets of used car buyers.

Odometer Fraud Cheats Car Buyers - Odometer tampering continues to be a serious crime and consumer fraud issue. In 2002, NHTSA determined this crime allows more than 450,000 vehicles to be sold each year with false odometer readings milking American car buyers out of more than $1 billion annually.

From 2002 to 2005, the Office of Odometer Fraud Investigations has seen a definite escalation in fraud. New car prices, coupled with the increased demand for late model, low mileage used cars, has made odometer fraud more profitable than ever. Strong enforcement of the federal and state odometer laws, i.e., prosecutions with stiff sentences, appears to be the most effective deterrent.

Automakers often recommend part replacements based on a car's mileage. So a vehicle's odometer is one of the easiest ways to judge expected wear and tear on parts that can affect your safety like ball joints, suspension and timing belts.

If an unscrupulous seller rolls back the odometer you could end up driving a car that is considerably less valuable and less safe than you thought. Some sellers even roll back the odometers on recent models so buyers think they're getting a brand new vehicle. You can imagine the extra cost consumers pay for that fraud. The most dangerous odometer rollbacks occur on vehicles that have been in serious crashes and should no longer be on the road at all.

The Office of Odometer Fraud Investigations has been working hard to track down crime rings that repeatedly buy high mileage vehicles, tamper with their odometers, and resell them as lower mileage cars to unwitting drivers. Fortunately, the office has tools to help investigators see patterns and trends and to sort through piles of records.

Recently, for example, came news of federal charges against four members of an organized crime ring involving at least 75 vehicles. NHTSA agents worked on the joint investigation with the Seattle Police Department, the IRS and the U.S. Attorney’s office to track down the men accused of buying cars from private parties, rolling back odometer mileage readings, and then selling those cars for a profit.

One way NHTSA's Odometer Fraud unit can protect consumers is by arming you with information before you make a purchase. They can help you determine the vehicle fraud laws in your state. And they offer helpful tips so buyers can identify the signs of odometer tampering.

This is particularly important with newer models because, with digital odometers, you can’t tell if the mileage has been rolled back just by making sure the numbers are aligned correctly. But even with digital odometers there are several things consumers can be on the lookout for when purchasing a vehicle:

Compare the odometer mileage with maintenance and inspection records,
Look at wear and tear on the vehicle and make sure it seems consistent with the stated mileage,
Run a free CARFAX Odometer Check and consider requesting a Vehicle History Report to check for odometer discrepancies in the vehicle’s history.

I’m proud of all the hard work our odometer fraud investigators put into the job of keeping America's drivers safe. But remember, when buying a vehicle, your own observations may be the best safety feature on the market.

Odometer Information Overview for Consumers

The Federal odometer law, 49 U.S.C. Chapter 327 (Public Law 103-272), prohibits the disconnection, resetting, or
alteration of a motor vehicle's odometer with intent to change the number of miles indicated thereon. The law requires that a written disclosure of the mileage registered on an odometer be provided by the seller to the purchaser on the title to the vehicle when the ownership of a vehicle is transferred. If the odometer mileage is incorrect, the law requires a statement to that effect to be furnished on the title to the buyer. However, vehicles ten years old and older are exempt from the written disclosure requirements.

Violations of any of the above requirements may subject the violator to civil liability if it is determined that his/her actions were intended to defraud the purchaser. The law makes available to the buyer a remedy in the amount of $1,500 or treble damages, whichever is greater, together with attorney's fees. To obtain this remedy, Section 32710 of the law permits the buyer to bring a private civil action in State or Federal court. He may do this by contacting his own attorney or the State Attorney General. The Federal Government has the authority to bring actions for civil and criminal penalties; however,
it cannot bring actions on behalf of consumers. We strongly recommend that you consult your own private attorney to determine your legal rights and remedies in this matter.

Performance and condition of the vehicle alone are not necessarily indications of odometer tampering. Factual evidence, i.e., statements from previous owner(s), receipts for repairs, service station stickers, or other documents showing a variance in odometer readings must be obtained. If your vehicle was previously owned, we recommend that you contact your state motor vehicle titling and registration office and obtain all title and title transfer documents pertaining to your vehicle. You should then contact previous owners to establish and document the true mileage of the vehicle.

Consumer Outreach Program

This program provides assistance to consumers who suspect that they have been victimized by odometer fraud. It covers various areas such as responding to general inquiries to specific questions related to odometer fraud violations.

We provide consumers with odometer laws, odometer Disclosure Requirements and other information if they suspect odometer fraud tampering; also, other sources are suggested that can assist them in their pursuit. In addition, they are strongly recommended to consult a private attorney to determine their legal rights and remedies in the matter.

Although we do not have the authority to prosecute on behalf of consumers we appreciate any information they provide us since it may aid us in our overall law enforcement efforts. To provide information, consumers may call this office on 202-366-4761, or the NHTSA Toll-Free Hotline at 1-888-327-4236 (TTY: 1-800-424-9153).

Odometer Fraud: Civil Remedies for Victims
Federal Odometer Laws and Regulations

Title 49 U.S.C., Chapter 327 (Formerly Title 15, Sections 1981-1990)

49 C.F.R., Sections 580.1-580.16 - Odometer Requirements

Violations:

Making false odometer disclosure statement.
Failure to provide buyer complete odometer disclosure statement.
Resetting or altering odometer with intent to change mileage.
If acquiring vehicle for resale, failure to obtain complete odometer disclosure statement from seller.
Conspiring to violate any of the Federal odometer statutes.

Civil Recovery:

$1,500, or
treble damages (three times), whichever is greater, plus reasonable attorney's fees.

Assessment of Actual Damages - Combination of:

Value of vehicle with fraudulent mileage minus value of vehicle with actual mileage. (Several industry mileage deduction guides are available.)
Lessened resale value of vehicle with altered odometer.
Increased finance charges on fraudulently inflated value.
Increased insurance costs on fraudulently inflated value.
Increased taxes on fraudulently inflated value.
Cost of unanticipated repairs and maintenance.
Time spent resolving problems created by fraud.

State Odometer Laws

Laws vary widely from state to state, however, odometer fraud is covered in most states.
State laws may provide access to dealer bonds or other coverage.
Some state laws provide for recovery of damages under state law in addition to damages recovered under Federal law.