Odometer Fraud Alert

by Don Elliott on September 29, 2011

The National Auto Auction Association (NAAA) has notified member auto auctions to be on alert for odometer fraud via electronic mileage adjustment tools. While odometer fraud is not a new crime, the use of low cost, readily available electronic equipment adds a new spin to the crime.

Frank Hackett, Executive Director of the NAAA, states, “The law regarding odometer fraud was written before the current electronic age. The statutes have not been revised by Congress since odometers have gone electronic. A gap in the law exists pertaining to these programming devices.”

Odometers are the devices on the dashboard of cars and trucks that measure the miles or kilometers a vehicle has traveled. An accurate odometer reading is important to assure that service is maintained at the proper intervals. It provides a realistic measure of a vehicle’s depreciation and directly impacts the vehicle’s used car value and safety.

Odometers come in two types, mechanical and digital. Older cars used a mechanical reading that was easily manipulated. An Electronically Erasable Programmable Read Only Memory (EEPROM) device that rarely malfunctions protects electronic digital odometers. However, malfunctions or accidents may cause the requirement of odometer reprogramming. Legitimate tools have been hacked to make fraudulent changes to the digital odometer reading.

In Frank Hackett’s alert, he cites “ongoing problems” at car auctions with illicit use of “odometer mileage programming devices.” Illicit devices are manufactured outside of the United States, but the devices are readily available online for a few hundred dollars or less.

The National Highway Traffic Safety Administration’s Office of Odometer Fraud Investigation tracks odometer fraud activity. “Unscrupulous wholesalers practice their craft at auto auctions in order to quickly turn inventory and insulate themselves from public and legitimate used car dealers,” NHTSA noted in a recent article in “Automotive Remarketing” magazine. “Reports have surfaced concerning the use of these devices in the leasing market, in fraudulent warranty claims, and in classified advertisements.”

Odometer fraud is difficult to spot and even more difficult to resolve. Consumers are advised to check for obvious signs of unusual wear or performance issues. Obvious mileage checks are sometimes overlooked. Oil change stickers and service records will show mileage and dates of service. Vehicle history reports will show the progression of mileage. If the current mileage is not in line with the records, beware!

If you suspect odometer fraud, NHTSA recommends that you “report the incident to state motor vehicle enforcement authorities. If a dealer is involved, report the incident to the state level entity that issues licenses to sell vehicles.” A good first step is to contact a private attorney who is familiar with automotive fraud issues to review your options.

As technology changes, so do the criminals. The National Auto Auction Association and member auto auctions work closely with local, state, and federal agencies including NHTSA and the National Odometer and Title Fraud Enforcement Association to spot violations and prevent the crimes.

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