1.2.2 Odometer Fraud
Odometer fraud, although somewhat less common than in years past, continues to be quite widespread. One type of odometer fraud involves tampering with an odometer so that it reads less than the car’s actual mileage. Another type is failing to disclose that an odometer has exceeded its mechanical limits, for example, that the car really has traveled 150,000 miles, not the 50,000 shown on the odometer. Odometer fraud also involves related misrepresentations about a car’s mileage and any failure to correctly make federally mandated disclosures. This treatise extensively treats odometer fraud.
- • The nature of odometer fraud and how it works is described in § 2.1.2, infra.
- • How to investigate odometer fraud is examined in §§ 2.2–2.5, infra.
- • Automobile auctions are examined in § 2.6.4, infra.
- • Odometer fraud may violate the federal odometer statute, the Motor Vehicle Information and Cost Savings Act (MVICSA), which provides a federal cause of action for $10,000 minimum damages, treble damages, and attorney fees. See Chs. 5, 6, infra.
- • Special issues concerning MVICSA enforcement are examined in Chapter 6, infra.
- • States also have enacted their own odometer laws that parallel the federal Act. See Appx. C, infra. These state laws may provide certain advantages over a claim under the federal Act, and claims under these statutes should thus be considered in lieu of, or in addition to, a federal MVICSA claim. See Chs. 5, 6, infra.
- • Odometer fraud may involve common law fraud, which may lead to punitive damages. See Ch. 8, infra.
- • Odometer fraud will involve a breach of implied or express warranties which may lead to revocation of acceptance, withholding of installment payments, and a claim for damages, even if the seller had no knowledge of the odometer tampering. See § 9.2, infra.
- • A breach of an implied or written warranty in a odometer fraud case may also lead to a Magnuson-Moss Warranty Act claim, which would provide for attorney fees. See § 9.2, infra.
- • Odometer fraud may violate a state unfair and deceptive acts and practices (UDAP) statute, which will often provide attorney fees, minimum, multiple, or punitive damages, and which may not require proof of the defendant’s intent or knowledge. See § 9.4, infra.
- • Odometer fraud may violate a state’s automobile dealer licensing statute or regulations, which will either provide a cause of action, leverage with the dealer, or an indirect cause of action under a UDAP, warranty, or fraud claim. See § 7.7, infra.
- • Odometer fraud may also violate the federal or state racketeer influenced corrupt organizations (RICO) statute. The federal statute provides federal jurisdiction, attorney fees, and treble damages. See § 9.5, infra. The state RICO statute may provide similar remedies in state court. See § 9.6, infra.
- • If the seller claims ignorance of the odometer problem, rescission on the grounds of mistake may be available. See § 9.3, infra.
- • How to litigate an odometer fraud case is examined in Chapter 10, infra, including: advising the client, who to sue, what claims to plead, jurisdictional issues, res judicata, class actions, evidentiary issues (such as how to introduce evidence of the defendant’s misconduct against other consumers), trial of odometer fraud cases, damage issues, settlements, attorney fees, and collecting judgments against the defendant, the defendant’s surety, related lenders, and auction companies. See also the various sample pleadings found in the online version of this treatise, and summarized in Appendix G, infra, including, among others: sample odometer fraud complaints, sample discovery, sample voir dire, a sample opening statement, a sample closing statement, jury instructions, and class action pleadings in odometer cases, including a complaint, protective order, class certification motion, discovery, class notice, and settlement papers.