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Consumers face 452,000 odometer fraud cases annually: HTSA

November 24, 2010

More than 450,000 people every year buy used vehicles with mileage gauges rolled back, spending an average $2,336 more than they should, according to a federal study of odometer fraud. The National Highway Traffic Safety Administration study, released July 11, found the practice is most common with fairly new vehicles that accumulate significant mileage in a short period, such as rental and company cars and leased vehicles.

Most odometer fraud is committed by wholesalers who buy fleets of used vehicles and sell them to dealers, said Richard Morse, chief of the NHTSA's odometer fraud program. "You can take a 2-year-old car with 20,000 miles on it, roll it back to 2,000, and you just made $4,000," said Morse. "That's without doing anything else to it. You don't even have to wash it." Newer cars usually have digital odometers, but it only takes a laptop computer and equipment readily available on the Internet to change the mileage.

The NHTSA study, which was requested by Congress, examined the title transfers of 10,000 vehicles and the administration's own database of known odometer fraud. The researchers calculated that 3.47 percent of vehicles less than 11 years old have had their odometers rolled back, or about 452,000 vehicles sold each year. Odometer fraud costs owners $1.1 billion annually, compared with the $2.9 billion lost on stolen autos in 2000, the study found. The fraudulent mileage costs do not include inflated financing, insurance and tax costs, repairs, lower resale value and other damages. Congress tried to reduce odometer fraud in 1986 by passing the Truth in Mileage Act, which requires owners to disclose mileage on the title when a vehicle is sold.

Consumers can check a title history at their state's department of motor vehicles, usually for less than $5, but states surveyed by the NHTSA reported that an average of only 9 percent of consumers take that step. Few states have programs that effectively detect odometer fraud, the NHTSA study found. Only four of 46 states that responded to NHTSA's survey routinely identify odometer fraud, alert an applicant when a higher mileage was listed on a previous title and keep mileage records at inspections or times other than titling. The report recommended that HTSA get more money to help states investigate odometer fraud.