WHAT IS ODOMETER FRAUD?

Odometer fraud, also known as “rolling an odometer,” “busting miles” or “clocking,” is a deceptive practice in which the mileage reading of a vehicle’s odometer is altered or manipulated to make the vehicle appear to have traveled fewer miles than it actually has. The purpose of odometer fraud is typically to increase the resale value of the vehicle or to hide its true wear and tear, making it more appealing to potential buyers. The NHTSA estimates that more than 450,000 vehicles are sold each year with false odometer readings. This crime costs American car buyers more than $1 billion annually.

WHAT DOES THE ODOMETER ACT PROVIDE?

The Act contains four main provisions related to odometers.

Firstly, it makes odometer tampering, advertising or selling fraud devices, and knowingly operating a vehicle with a malfunctioning odometer illegal (49 U.S.C. §32703).

Secondly, the Act establishes procedures for handling situations where a motor vehicle repair results in an odometer reading change (49 U.S.C. §32704).

Thirdly, the Act mandates that every time a vehicle is transferred, the transfer must disclose the odometer reading and indicate whether it is accurate (49 U.S.C. §32705).

Lastly, the Act prohibits any parties from conspiring to violate any of its provisions (49 U.S.C. §32703(4)).

WHO CAN BE LIABLE FOR ODOMETER TAMPERING?

Under federal law, several parties can be held liable for odometer tampering, fraud, or related violations. The Motor Vehicle Information and Cost Savings Act (Federal Odometer Act) identifies the following parties who can be liable:
  1. Individuals: Any individual who knowingly and willfully engages in odometer tampering, alteration, or fraudulent practices can be held liable under federal law. This includes sellers, buyers, or any other person directly involved in the tampering.
  2. Motor Vehicle Dealers: Auto dealers, both new and used, are subject to the provisions of the Federal Odometer Act. If a dealer engages in odometer tampering, misrepresentation, or fails to provide accurate odometer disclosures, they can be held liable.
  3. Automotive Auctions: Auction houses that deal with motor vehicles are also subject to the Act’s provisions. If they knowingly facilitate the sale of vehicles with tampered odometers, they can be held liable.
  4. Wholesalers and Distributors: Entities involved in wholesaling or distributing used vehicles may also be liable if they are aware of odometer tampering or fraud and continue to facilitate the sale of such vehicles.
  5. Other Parties: The Act’s prohibitions extend to any party that knowingly aids or abets odometer tampering or engages in conspiracy to commit odometer fraud.

HOW CAN AN ODOMETER BE ROLLED BACK?

Here's how odometer fraud is typically carried out:
  1. Rollback: The most common method involves physically rolling back the odometer to a lower number. This can be done manually or by using specialized devices or tools.
  2. Digital Odometer Tampering: With the advent of digital odometers in modern vehicles, the manipulation has become more sophisticated. Hackers or individuals with technical knowledge may alter the vehicle’s electronic systems to reduce the recorded mileage.
  3. Replacement: Sometimes, an entirely new or lower-mileage odometer is installed in place of the original one, making it harder to detect the fraud.
  4. Mileage Blockers: A mileage blocker, also known as an odometer blocker or odometer correction device, is a device or software that is designed to manipulate the mileage recorded on a vehicle’s odometer.

WHY IS ODOMETER FRAUD A PROBLEM?

Odometer fraud is illegal because it deceives consumers, distorts the vehicle’s true value, and can lead to safety issues. A lower mileage reading may make the vehicle appear to be in better condition than it actually is, leading buyers to pay a higher price. Additionally, inaccurate mileage can mask potential mechanical problems or maintenance needs, putting the new owner at risk for abnormal maintenance costs not originally anticipated by the buyer.
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Check Vehicle History Reports: Obtain a vehicle history report from a reliable source, which may include information about the vehicle’s mileage history. However, never rely on a history report alone.

HOW TO DETECT ODOMETER TAMPERING?

To protect yourself from odometer fraud when buying a used car, consider these steps:

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Examine Maintenance Records: Look for maintenance and service records that include mileage, and check forinconsistencies.

3

Inspect Wear and Tear: Examine the vehicle’s condition, especially the interior and mechanical components, to see if it matches the claimed mileage.

4

Ask for a Pre-Purchase Inspection:
Have a trusted independent
mechanic inspect the
vehicle thoroughly
before making a purchase.

5

Beware of Suspiciously Low Mileage: If the mileage on a used vehicle seems too good to be true given its age and overall condition, it could be a warning sign of potential odometer fraud. If its too good to be true, IT IS!

WHAT ARE THE CRIMINAL PENALTIES FOR ODOMETER TAMPERING?

Under federal law, individuals found guilty of odometer fraud can face the following criminal penalties:

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Imprisonment: Offenders can be sentenced to up to three years in federal prison for each violation of the Federal Odometer Act.

2

Fines: Criminal fines can be imposed on the offenders. The exact amount can vary depending on the number of violations and other factors.

3

Restitution: Offenders may be required to pay restitution to the victims to compensate them for any financial losses incurred due to the fraud.

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Statutory Damages: The Federal Odometer Act affords a consumer with up to $10,000 in statutory damages if successful in court. These damages are set by law and are not contingent on proving the actual financial losses suffered by the victim.

WHAT ARE THE CIVIL PENALTIES FOR ODOMETER FRAUD?

Civil penalties for odometer fraud in the United States can be enforced under the Motor Vehicle Information and Cost Savings Act (MVICS Act), which is also known as the Federal Odometer Act.
The Federal Odometer Act affords the following forms of relief for consumers:

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Punitive Damages: In cases of severe fraud or intentional misconduct, punitive damages may be awarded by the court to punish the offender and deter others from engaging in similar fraudulent practices. Punitive damages are not always awarded and are highly depend on the circumstances of the case.

3

Legal Fees and Costs:
A consumer that prevails under a
Federal Odometer Act lawsuit may
be entitled to recover reasonable
attorney’s fees, court costs, and other
expenses incurred in pursuing the legal action.
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