Odometer Fraud News...
Odometer Fraud: A
Crime That's Spinning Out Of Control
Feds Say Mileage Is Rolled
Back On 450,000 Cars A Year
You open your
favorite newspaper or log on to your favorite online service and spot what you
think is a great car deal: a 3-year-old Toyota Camry with only 30,000 miles for
$13,000.
The seller insists on driving the Camry to your house, hands you the keys and
lets you take it to your mechanic for a checkup. Later, after you agree to the
asking price, you get the title.
A few days after, you have a question and phone the seller. You get a recorded
message saying the phone has been disconnected. The seller has vanished.
You've been had
You check Carfax or another information service and learn the Camry you bought
actually has 50,000 miles on its odometer, not 30,000. According to the Kelley
Blue Book, an industry bible, the price should have been about $10,000. You've
been taken for $3,000.
Used car scams is one of the modern era's oldest professions and is among the
biggest of the scams is odometer fraud. In the New York metropolitan area, the
crime is almost out of hand, say federal investigators, who complain they don't
have enough manpower to deal with the problem.
"It's just rampant," Richard Morse, chief of odometer fraud investigation for
the National Highway Traffic Safety Administration in Washington, D.C., said of
odometer fraud in the metro area. What makes the crime so prevalent in this
region is the large number of high-priced cars in New York City, Long Island and
elsewhere, he said.
"My staff is small," Morse said, explaining that he has only one investigator to
work on cases in New York, New Jersey and Pennsylvania. "We can only do so
much."
Widespread problem
Indeed, the problem of odometer fraud is daunting. Morse estimates that at a
minimum, about 450,000 cars a year across the country have their odometers
"spun" by criminals, some acting on their own and some who are members of gangs.
The NHTSA estimates that odometer tampering costs U.S. consumers as much as $10
billion annually in inflated car prices.
It might seem that, with digital odometers so prevalent these days, such fraud
would be harder. But, Morse said, it's even easier.
"A lot of mechanical odometers had some tamper resistance built into them," he
said. "If you were not careful, you would break them. With a digital odometer,
all you need is an interface between a laptop computer and a control module,
where the [odometer] information is stored. Then, you type in the right codes,
and that reprograms the odometer," said Morse, who has been managing the federal
government's odometer program since its inception in 1978.
Federal regulators say that big, organized rings that "spin" odometers work in
this area. Each one, government investigators say, turns over thousands of autos
each year. A particularly hardworking criminal may turn over as many as 80 to
100 cars annually, government investigators say.
Organized rings that purchase, say, a 2-year-old car with 80,000 miles on the
clock and roll it back to 20,000 miles can then sell the car for $4,000 more
than its actual market value, the investigators say.
The American Automobile Association says the very nature of the used car market
in the United States makes it fertile ground for fraud. Cars can change hands
several times before they reach a used car lot, and fraud can occur at almost
any step in the process, AAA said.
A federal crime
"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," AAA said, referring to a practice of having new, lower mileage
titles issued in states that allow this to occur.
Only in America
The United States is believed to be the only country in the world that has
federal criminal penalties for odometer fraud. It is illegal to reset or alter
an odometer with the intent to change mileage or to file a false odometer
disclosure statement, federal regulators say. One recent law, the Truth in
Mileage Act, requires the seller to disclose the vehicle's mileage on the title
when a car's ownership is transferred. The title, the law says, must be printed
by a secure process to decrease the possibility of counterfeiting or altering
titles.
But people do get caught. Last year, regulators say, there were 14 convictions
nationwide for fraud. "These are cases where everyone went to prison," Morse
said.
One of the most famous cases last year involved an Tulsa, Okla., man, William
Satterfield, who pleaded guilty to conspiracy and odometer tampering. What made
the case unusual is that Satterfield was chairman of the Oklahoma Used Motor
Vehicle and Parts Commission from April 1995 until November 1996. He was
responsible for law-enforcement activities for the state involving car
dealerships. He was sentenced to a 50- month jail term, and was ordered to pay a
$7,500 fine and $1,337,000 in restitution.
Fast-growing crime
Federal officials say odometer fraud is on the rise nationwide because sales of
used cars are increasing, the result of the fast-rising prices of new cars and a
growing number of late-model used cars coming off leases.
The rising prices of used cars make the crime of odometer tampering a lucrative
one. But what makes federal investigators' jobs more difficult is that some
odometer criminals are expert at "washing" titles.
Morse said washing is sometimes done by changing the mileage on the title
certificate, then reregistering the car in a different state where motor vehicle
officials sometimes ignore alterations, even obvious ones, and issue titles with
the new, lower mileage. Some of the scammers are expert at altering titles,
turning a 7 into a 2, an 8 into a 3 or a 9 into a 4.
And the hunt for criminals is made none the easier by scarce manpower.
How to tell if mileage has been spun
How can you tell if your odometer has been rolled back? It's not very easy, but
there are some telltale signs:
-
The mileage shown on the odometer is low but the tires already have been
replaced.
-
Screws in the dashboard are missing or are misaligned, mostly around the gauge
cluster.
-
Traces of fingerprints are visible in the dust that accumulates on the
odometer's numbers.
-
The numbers are scratched, particularly near the edges.
-
Numbers are misaligned, particularly those showing larger denominations.
-
You have a mechanic check out the car, and he tells you he doubts the mileage is
accurate.
Are there any steps you can take before you buy to make sure the odometer
reading is accurate? You can:
-
Look for oil stickers, service records or warranty cards that may reflect the
true mileage.
-
Ask to see the odometer statement, which the seller received when he bought the
vehicle.
-
Try to contact the previous owner, even if you're buying the car from a dealer.
-
Get hold of the previous owner's name by contacting a state Department of Motor
Vehicles office and providing it with the vehicle identification number (VIN),
which is visible through the front windshield on the driver's side of the car.
-
James Bernstein, Newsday, Wednesday, June 8, 2005
This page was last updated on
06/11/05
.
