Odometer fraud, also known as odometer rollback, involves tampering with a vehicle’s odometer to make it appear as though the vehicle has traveled fewer miles than it actually has. This deceptive practice can artificially inflate a vehicle’s value and mislead buyers about its condition and longevity.
Prevalence of Odometer Fraud
- National Scope: Odometer fraud has historically been a significant issue in the United States, with estimates suggesting that approximately 1-2% of all used cars have odometers that have been tampered with. The National Highway Traffic Safety Administration (NHTSA) has estimated that hundreds of thousands of vehicles are affected annually.
- Detection and Reporting: Fraud is often underreported because it can be difficult to detect without proper inspections or documentation. Many cases go unnoticed or unreported.
Economic Impact and Costs to Consumers
- Estimated Annual Cost: The Federal Trade Commission (FTC) and other industry sources estimate that consumers lose billions of dollars each year due to odometer fraud.
- Impact on Price and Value: Vehicles with rolled-back odometers are often sold at higher prices than their true value, leading to financial losses for buyers who purchase vehicles with more wear and tear than indicated.
Motor Vehicle Information and Cost Savings Act, 49 U.S.C. § 32701
The Motor Vehicle Information and Cost Savings Act imposes liability for odometer fraud, tampering, and for false statements concerning a vehicle’s mileage. The law makes violations a felony punishable by significant jail time and imposes damages of the greater of three times actual damages or $10,000, per violation, whichever is greater.
- The National Highway Transportation Safety Administration (“NHTSA”) enforces laws against odometer tampering, and violations can lead to substantial fines and penalties. Additionally, state agencies and local law enforcement often investigate reports of odometer fraud, and the law allows for private enforcement by individual attorneys.
