Consumer Fraud / Auto Fraud

There are a number of federal and state laws designed to protect consumers from the many deceptive and unsavory practices used in connection with purchasing and financing an automobile. Auto fraud is a very broad area. There are many different types of auto fraud, and the defendants include: insurance companies, car dealers and manufacturers, extended warranty companies, service contract companies and car finance companies.

Few things are more annoying in the purchase of a vehicle than to find out that it has sustained prior accident damage. In many states, it is illegal to sell a new vehicle that has sustained some form of body, structural, collision, or other damage up to a certain percentage of the manufacturer’s suggested retail price for the vehicle without first disclosing the prior damage to the buyer. It is also generally considered illegal to sell an unsafe vehicle, to make affirmative misrepresentations about a vehicle, new or used, or to lie to a consumer in response to questions asked about a vehicle.

So, for example, if you ask a dealer whether a vehicle has been in a prior accident and the dealer denies any knowledge while being aware of a prior accident on the vehicle, that misrepresentation can be auto fraud. Likewise, if a dealership fails to disclose material damage, even if previously “repaired,” this can also be fraud.

If you notice any problems in the appearance or performance of the vehicle, the best way is to have it inspected by a body shop.

If you think you may have been sold a previously wrecked vehicle, contact our experienced consumer fraud attorney’s who can provide a cost-free, objective review to determine whether you have a case, and what you may be entitled to.

Auto fraud can occur at any stage of the vehicle purchase process, from advertising to signing on the dotted line. Here are some common situations that can give rise to auto fraud.

Improperly inflating a vehicle’s invoice price: Improper inflation of the invoice price include making additions to the invoice figure, when those charges were originally included in the invoice price (i.e. destination charges)

Bait and Switch: A form of false or deceptive advertising or selling the advertised vehicle at a price higher than the advertised price.

Add-On Concealment: Concealing the inclusion of certain optional “add-ons” during the negotiation process, or the costs of those add-ons, but including those add-ons in the final vehicle price.

Vehicle Trade-Ins: Undervaluing and underpaying for a car buyer’s trade-in vehicle.

New Dealer Returns: Selling as a new vehicle that was actually returned to the dealer because of a defect or persistent mechanical problem or was returned shortly after purchase for some other reason.

Salvaged and Flood-Damaged Vehicles: Failing to disclose that a vehicle has been designated “salvaged” after a car accident, or has been flood-damaged.

Odometer Rollback: Odometer rollbacks are intended to conceal a vehicle’s actual mileage.

Fraud Prevention Tips for Consumers

Check the vehicle over thoroughly to see if the actual condition matches the mileage that is showing in the odometer.

If the vehicle has been repainted, look to see which parts have been replaced. Paint can be used by offenders to cover older parts, thus giving the vehicle a newer look.

Look in the left door frame, inside left front window, in the glove compartment, under the hood, or in the trunk, for maintenance and oil change/lube stickers that could contain accurate mileage information.

Be wary of a vehicle advertised or represented as part of a fleet that has especially low mileage.

The numbers should be aligned properly on the odometer gauge, crooked or misaligned numbers could be a sign of tampering;

You MUST be provided with a written statement of the actual mileage disclosed on the odometer at the time of purchase; if you are not given this document you may already have a claim under the Truth in Mileage Act.

Contact us for a Free Case Review if you are a victim of consumer fraud. You can Contact the Krohn & Moss, Ltd. Consumer Law Center® by calling our toll-free telephone number 1-800-USLEMON (1-800-875-3666), emailing us at, or completing our FREE case review. We will attempt to quickly resolve your claim with the manufacturer at no cost to you.

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