FREQUENTLY ASKED AUTOMOBILE FRAUD QUESTIONS

Automobile fraud occurs when a retailer seller misrepresents or fails to disclose material facts regarding a new or used vehicle. There are many categories of automobile fraud: sale of wrecked vehicles, sale of previously repurchased “lemon” vehicles, odometer fraud and various financial frauds that occur in the advertising or at the time of sale or lease of the vehicle. The following are some Frequently Asked Questions we receive about auto fraud during our daily interaction with vehicle consumers.

What constitutes fraud in the sale of a wrecked vehicle?
How do I know if I have been sold a previously wrecked vehicle?
What can I do if I think I was sold a previously wrecked vehicle?
What is odometer fraud?
How do I know that I have been sold a vehicle with an incorrect odometer reading?
What are some other ways that people are defrauded through the purchase or lease process?

What constitutes fraud in the sale of a wrecked vehicle?
Few things are more aggravating in the purchase of a vehicle than to find out that it has sustained prior material accident damage. It is illegal to sell a new vehicle with any unrepaired damage, any structural damage or even if repairs were made costing more than 3% of the vehicle’s value. Vehicles sold as Certified Pre-Owned vehicles, meanwhile, must live up to the dealership’s advertised certification standards. It is always illegal to sell an unsafe vehicle, and if you asked specific questions about a vehicle, new or used, the dealer is obligated to provide truthful responses (to the best of his knowledge).

So, for example, if you ask a dealer whether a vehicle has been in a prior accident and the dealer, that misrepresentation can be auto fraud. Likewise, if a dealership fails to disclose material damage, even if previously "repaired," this can also be fraud.

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How do I know if I have been sold a previously wrecked vehicle?
Consumers will typically begin to notice problems in the appearance or performance of their vehicle that may be tell-tale signs of a previous accident. Common examples of appearance items include: over-spray paint on portions of the vehicle, panels that don’t line up or fit correctly, and doors or trunk lids that don’t close properly. Common performance-related signs include accelerated or uneven tire wear and front-end pulling.

The best way to tell if your car was damaged is to have it inspected by a body shop. Signs of damage are usually fairly easy to detect, although a frame check may be required if structural damage is suspected. We routinely have clients’ vehicles inspected by a nearby, reputable shop.

You should be aware that Car Fax vehicle history reports often fail to reveal prior accidents or damage – and that dealers sometimes use these (often incomplete) reports to “prove” that a vehicle hasn’t been damaged.

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What can I do if I think I was sold a previously wrecked vehicle?
If you think you may have been sold a previously wrecked vehicle, the Auto Fraud Legal Center can provide a cost-free, objective review to determine whether you have a case, and what you may be entitled to.

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What is odometer fraud?
Odometer fraud occurs when a seller falsely represents the actual mileage of a vehicle. Common examples of odometer fraud include situations where someone has tampered with the odometer and rolled it back, someone has replaced the odometer and failed to provide the required notice on the vehicle, or where the odometer has rolled through all the digits and started over.

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How do I know that I have been sold a vehicle with an incorrect odometer reading?
The existence of possible odometer fraud can be determined by researching records from the California Department of Motor Vehicles, contacting former owners, checking Internet sites, such as www.carfax.com and conducting a mechanical inspection of the vehicle.

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What are some other ways that people are defrauded through the purchase or lease process?
There are numerous schemes automobile dealerships use to increase profits and defraud consumers during the purchase or lease process. These schemes include: misrepresenting discounts in advertising and not disclosing important limitations; altering the terms of the contract and forging signatures; inflating quotes of monthly payments and then selling add-on products (service contracts, paint sealant, alarms, etc.) as if they were part of the deal; and adding amounts owed on trade-in vehicles to a purchase or lease contract without disclosure to the consumer. These schemes are sometimes complex, and most consumers never realize they’ve been defrauded.

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