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Odometer Fraud: What Is It?

Odometer fraud occurs when an individual purposely changes the mileage on a vehicle’s odometer in order to make the vehicle seem like it has fewer miles than it does. When this happens, consumers often pay a purchase price for the vehicle that is greater than what the vehicle is worth. Consumers may then encounter repairs and maintenance needs that happen earlier than expected.

When purchasing a vehicle, it is important for consumers to check the vehicle for possible signs of odometer fraud. Consumers can do this by asking for maintenance records, inspection records, or any paperwork that may have documented the mileage of the vehicle. Consumers should also compare the mileage that is displayed on the odometer with the mileage that is printed on the vehicle’s title in order to see if the two are consistent. Additionally, consumers can pay a trained mechanic to conduct a detailed inspection of the vehicle and check if the stated mileage of the vehicle matches its current state and condition. Finally, consumers also have the option of buying a report of a vehicle’s history from the National Motor Vehicle Title Information System and then looking for any inconsistencies among the provided numbers in it.

The Massachusetts Odometer Law: What Is It?

In Massachusetts, Massachusetts General Law Chapter 266, Section 141, et seq. (hereinafter Massachusetts Odometer Law”) provides regulations surrounding odometers. The law provides three circumstances that result in odometer fraud: 1) when any individual uses, sells, or installs a device on a vehicle that causes its odometer to display a false mileage, 2) when any individual resets or changes the odometer of a vehicle with the purpose of changing its registered mileage, and 3) when any individual who has the intention of defrauding others knowingly drives a vehicle with a nonfunctioning or disconnected odometer. Under the law, the term “odometer” only refers to the vehicle’s primary mileage measuring tool and does not apply to any auxiliary odometers that are meant to be reset (e.g. odometers that measure mileage for a trip).

If the odometer on a consumer’s vehicle has been illegally altered, the consumer has the right to take legal action against the party that sold them the vehicle. A violation of the odometer law is considered to be an unfair method of competition and it constitutes a violation of Massachusetts’ General Laws Chapter 93A; which is Massachusetts’ basic consumer protection statute and states that a business is prohibited from doing anything unfair or deceptive.

What damages are consumers entitled to?

If a consumer brings a successful action under the Massachusetts Odometer Law, they have the right to collect an amount equal to three times the amount of actual damages, or $1,500, whichever is greater. Additionally, the seller would have to pay for the consumer’s attorney’s fees and costs.

Any seller that commits odometer fraud will also be punished with a fine between $500 and $1,000. They may also be subject to imprisonment for a length of time between 30 days and two years.

The Federal Odometer Law: What Is It?

The federal law that governs practices in regard to odometers is known as the Motor Vehicle Information and Cost Savings Act (49 U.S.C. §§ 32701, et seq.). This law is very similar to the Massachusetts law that is in regard to odometers, in that it creates civil liability on individuals who tamper with odometers and their readings. Before purchasing a vehicle, it is important for consumers to carefully check the vehicle’s title and paperwork as well as the vehicle itself for any mileage inconsistencies.

Under the federal law, sellers are considered to have committed odometer fraud if they 1) sell, use, or install a device that changes the odometer reading of a vehicle; 2) disconnect, reset, or alter an odometer for the purpose of changing the vehicle’s mileage; and 3) knowingly operate a vehicle with a faulty odometer with the intent to defraud.

Additionally, the federal law requires sellers to provide a disclosure to the purchaser when transferring ownership of a vehicle. This disclosure must include an accurate reading of the odometer’s mileage. If the seller does not know the actual mileage of the vehicle, they must disclose that the true mileage of the vehicle is unknown. An individual that acquires a vehicle for resale purposes can only accept a written disclosure if it is complete. A seller would be in violation of this law if they fail to provide a disclosure statement or if they provide a disclosure statement that is inaccurate or incomplete.

As of January 2021, the federal law states that odometer disclosures are required for all vehicles that have not yet reached 20 years of age. This amendment allows for more vehicles to be covered by the law and it begins with model year 2011 vehicles. This means that individuals who sell 2011 vehicles must provide odometer disclosures for these vehicles until 2031 (i.e. until the vehicle has reached 20 years of age). Vehicles that are model year 2010 and older are subject to the previous 10-year rule. Thus, individuals that sell model year 2010 and older vehicles do not have to provide any odometer disclosures to their purchasers.

The federal law also contains provisions that regulate odometer repairs, services, and replacements. The law allows for odometer repairs to be done if the mileage on the odometer remains unchanged. If the mileage cannot be kept the same, the individual must set the odometer to zero and attach a notice on the vehicle that states the date of the repair and the mileage of the vehicle before the repair occurred. The individual must not remove or alter any part of this notice.

If a consumer discovers that they are a victim of odometer fraud, they have the right to file a lawsuit against the seller of the vehicle.

What damages are consumers entitled to?

Pursuant to the federal odometer law, successful consumers are able to recover three times the amount of their actual damages, or $10,000, whichever is greater. Per the discretion of the court, consumers can also receive reasonable attorney’s fees and costs.

Claims under this law are subject to a two-year statute of limitations period, which is the maximum amount of time that a consumer can have to initiate legal proceedings under this law. The period begins on the date that the consumer discovers or should have discovered the occurrence of odometer fraud.