WHAT IS MILEAGE DISCLOSURE (A/K/A ODOMETER FRAUD)?
Odometer fraud occurs when someone gives a false statement in disclosing the mileage of a vehicle. According to the American Automobile Association (AAA) odometer fraud is a serious threat to used car buyers that can cost thousands of dollars in frustrating breakdowns and repairs. The difference in value of an average vehicle with 30,000 miles and 70,000 miles is dramatic. When increased finance and repair costs are added, the loss to a consumer who purchases a vehicle with an altered odometer is considerable.
AAA further notes that the very nature of the used car market makes it fertile territory for fraud. The vehicle can change hands several times before reaching the used car lot and fraud can happen at almost any step in the process. Unscrupulous operators can commit fraud by changing the odometer reading, cleaning the vehicle to make it appear to an untrained eye that the vehicle has been driven fewer miles, and sometimes washing the title (having a new, lower mileage title issued in a state which allows this to occur).
Used cars with five digit odometers which have rolled over can have mileage untruthfully disclosed at the number of miles appearing on the odometer (e.g., 50,000 miles) when the vehicle has in fact been driven one hundred thousand or more miles further (e.g., 150,000 miles).
HOW CAN I IDENTIFY ODOMETER FRAUD?
Unless you are trained, you probably cannot identify if the mileage shown on the odometer is accurate. Before purchasing a used car, take it to a mechanic for an inspection. If the seller will not allow you to do so, beware.
WHAT DOCUMENTS AM I ENTITLED TO SEE?
Before you decide to buy a car you want to learn as much of the history of the car as you can. Some used car dealers purposely keep their used car salesmen in the dark about the history of cars on the lot in that the salesmen may not even be provided access to the title file and/or inventory file which contain documents showing how the car was acquired.
Ask to see the title to the car before you negotiate a final deal. If the seller has possession of the title, there is some authority that the seller is required by federal law to disclose mileage to you on the title. However, that virtually never happens in Nevada as car dealers almost always use some other document to disclose mileage. By regulation in Nevada, you at least are entitled to see a photocopy of the title. Ask for it. Viewing the title enables you to learn the name of the previous owner (which may be important for a number of reasons), and to examine the mileage disclosure made on the title by the previous owner.
If the seller does not have possession of the title because it is held by a lien holder, then the seller is required by federal law to disclose mileage to you on a power of attorney printed by means of a secure printing process. This Secure Power of Attorney is essentially a title substitute. It shows the name of the previous owner along with the mileage disclosure made by him or her. Examine the title or Secure Power of Attorney, as the case may be, carefully.
You as the buyer also sign the title or Secure Power of Attorney, as the case may be, acknowledging you received the mileage disclosure. Do not sign this document if it contains any blanks. Also, ask for a copy because you will never see this document again (unless a title history is acquired from DMV), and without a copy you will not know whether it was altered after you signed it and before it was submitted to DMV.
Some dealers may attempt to disclose mileage to you on a Dealer Reassignment of Title form. You should nevertheless always insist on seeing the mileage disclosure made by the previous owner on the title or Secure Power of Attorney. If the dealer refuses to show you this document, refuse to buy the car.
ARE THERE ANY LAWS WHICH PROTECT ME AGAINST ODOMETER FRAUD?
Yes. The Motor Vehicle Information and Cost Savings Act, popularly known as the Odometer Act, may be found at 49 U.S.C. 32701 et seq. It is, of course, illegal to disconnect, reset or alter an odometer. But also, under this law, for every used car less than 10 years old a person transferring ownership shall give the buyer disclosure of the mileage of the car and it is unlawful to give a false statement in making the disclosure. Also, if the transferor knows that the odometer reading is different from the number of miles the vehicle has actually traveled, the disclosure must state that the odometer is not the actual mileage (e.g., rollback or driven with odometer disconnected or not operating) or that the odometer reflects mileage in excess of its mechanical limits (rollover).
It is also unlawful for a dealer to accept a mileage disclosure unless it is complete. In other words, it is unlawful for a dealer to accept a title or power of attorney containing blanks (for mileage, signature, date of transfer, name of transferor, identity of vehicle, etc.).
WHAT SHOULD I DO IF I HAVE REASON TO BELIEVE THAT I HAVE BEEN A VICTIM OF ODOMETER FRAUD?
You have several options if you believe that you've been victimized by odometer fraud. You can report the dealer to Compliance Enforcement at the Nev. Dept. of Motor Vehicles (Las Vegas) at 702-486-8626.
You may also complain to the Bureau of Consumer Protection of the Nevada Atty. General's Office (Las Vegas) at 702-486-3420. You may also file a civil lawsuit for damages against the dealer. You may recover three times your actual damages or $1,500, whichever is greater. See 49 U.S.C. 32710. You may also have a claim for punitive damages. You must sue no later than two years after your claim arises. You may also recover attorneys fees and court costs. You may sue in either state or federal court. You may also have causes of action for fraud and/or Deceptive Trade Practice.
Once you suspect that you have been victimized by odometer fraud you should contact an attorney promptly.
The following website may provide additional information or assistance regarding the history of used vehicles: