A Wyoming jury found a used car dealer guilty of several felony counts.  Here is a link to a detailed article -

 http://ca.sys-con.com/node/1256584

Source: Wikipedia

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There is no way to guarantee that you will not be the victim of an odometer rollback scam.  Be sure to always check www.carfax.com and www.autocheck.com for any car you are considering purchasing.  These databases might not disclose a rollback, or even prior damage or a salvage title.  However, they are a good starting point for your research.

I just ran across an interesting site entitled “Cars for Girls.”  According to the site, ”Cars for Girls is designed to empower women by respecting and educating them in order to help them make smarter buying decisions.”  The most recent post gives six tips to avoid odometer fraud:

http://www.carsforgirls.com/index.php/6-tips-to-prevent-becoming-a-victim-of-odometer-fraud/

We have a case pending against a car dealer related to alleged odometer fraud.  The evidence we have obtained through discovery in the lawsuit indicates that the dealer knew the actual vehicle mileage when it sold the vehicle with an odometer showing far fewer miles.  The dealer apparently bought the car when it had over 200,000 miles and then sold it to our client with an odometer reading of less than 90,000 miles.  The dealer’s defense has been that he disclosed generally that the miles on the odometer were not the original miles.  Under Texas law, this disclosure is not enough.  I was reminded of this defense when I read about the following indictment:

“A federal grand jury in Casper, Wyo., Thursday returned an indictment charging Randy Lee (a/k/a Jimmy Lee) and Jay Lee (a/k/a John Marks, a/k/a Anthony Romero) of Cheyenne, Wyo., with odometer tampering, title fraud, securities fraud, mail fraud and conspiracy to commit these offenses. The indictment alleges that the defendants worked as used car dealers at Lee’s RV’s, Inc., a dealership in Cheyenne. According to the indictment, as early as 2002, and through at least 2006, the defendants devised a scheme to defraud buyers of used motor vehicles by misrepresenting the mileage of vehicles they sold.

As part of the scheme, the indictment charges that the Lees purchased high-mileage, used motor vehicles from various businesses in New Mexico and Wyoming, as well as from a wholesale motor vehicle auction in Loveland, Colo. The defendants are charged with altering the odometers in these vehicles to reflect false, lower mileage. The Lees then fraudulently altered the motor vehicle titles and sales documentation associated with the these vehicles to reflect the false, lower mileage. As a result, the state of Wyoming issued motor vehicle titles reflecting this false, lower mileage, which the Lees knew to be untrue.

The defendants subsequently sold the motor vehicles to local consumers, other used motor vehicle dealers and at wholesale auto auctions, sometimes without stating that the false, lower mileages were inaccurate. As a result, the Lees received higher sales prices for the vehicles they sold, the indictment alleges.

According to the indictment, some of the vehicles were sold with false, low mileage written on the title, but with a notice that the odometer reading was not accurate. The indictment adds that the defendants did not reveal the true mileage of the vehicle, which could be more than 100,000 miles more than what the title indicated.”

Obviously, I know nothing about the truth or falsity of the indictment.  Moreover, these gentleman are presumed to be innocent until and unless proven guilty.  However, a Texas car dealer cannot, with a wink and a nod, simply tell a consumer that mileage for a car or truck is not accurate without disclosing the dealer’s knowledge about the actual mileage.

The National Motor Vehicle Title Information System is now online.  It is a system that allows users to obtain information about branded titles.  Read about it, and its limitations, here – http://www.nmvtis.gov/

If you are considering purchasing a used car, you should always conduct some research before signing on the dotted line.  Aside from general research about the type of vehicle you are considering buying, you should consider using a commercial information database such as Carfax (www.carfax.com) and AutoCheck.  These databases can provide useful history about the background of a specific vehicle.  Here’s an interesting commercial for Carfax:

Source: Reuters

There are numerous laws and regulations that apply to car dealers.  Some laws apply to sales, others to leases, and yet others only to financing.  I address in this post only a few potential claims, or causes of action, against a car dealer for improper tactics used when selling or leasing a vehicle.

State “UDAP” Statutes – Each state is likely to have its own “UDAP,” or unfair and deceptive acts or practices, statute to protect consumers.  These UDAP statutes generally protect consumers from fraudulent, unconscionable, unfair, or deceptive consumer transactions.  They usually apply to a broad range of consumer transactions, including those related to vehicle sales, leasing, and financing.  The Texas general UDAP statute is the Texas Deceptive Trade Practices – Consumer Protection Act (“DTPA”).

Fraud – Fraud is a claim available for consumers when a car dealership essentially lies about or fails to provide sufficient information to a consumer regarding a material fact related to the sale or lease of a car or truck.  A material fact is generally a fact which would be important to the average consumer.  The mileage of a vehicle, a vehicle’s title being branded as “salvage,” and a vehicle previously being flooded are some examples of material facts.

Negligence – A car dealer owes certain duties to customers when selling or leasing vehicles.  If a car dealer breaches, or fails to fulfill, those duties, it can be liable to a car buyer for resulting damages.

State Statutory Finance Claims – Many states have laws in place to protect consumers from certain types of finance fraud, and also the charging of usurious (unlawfully high) interest rates.  Some such laws also protect consumers from “cash price violations,” or improper charges being included in the amount financed.

Federal Odometer Act – The Federal Odometer Act is is a narrow federal law that protects consumers from those who tamper with a vehicle’s odometer.  The Act provides for damages and attorneys’ fees for a consumer affected by someone rolling back the miles on a car or truck purchased by the consumer.

This is just a brief summary of some laws and causes of action available to consumers in the car fraud context.  Every case is different, and you should contact a lawyer regarding your specific situation.

Believe it or not, odometer fraud is still a widespread practice.  We have reviewed cases recently in which someone clearly “rolled back” odometers.  The worst case that we reviewed is one in which it appears that the actual miles on the car were rolled back over 100,000 miles.  There are many things that can be done to attempt to avoid odometer fraud.  For starters:

• Check out the vehicle you are thinking of buying at www.carfax.com and/or www.autocheck.com.  These sites are not fool-proof, but they might provide information that you might not otherwise know.
• Have the vehicle inspected by an independent inspector.
• Look closely at the condition of the vehicle, and note any performance issues, which might indicate that the car is older that it the odometer indicates.

These are just a few ideas.  Always approach a car purchase with as little emotion and as many facts as possible.