Search
Automobile Fraud: 5.6.5.7.2 Prior NHTSA state approvals
Before NHTSA developed these standards for state electronic titling and disclosure systems, NHTSA had authority to approve alternative methods of odometer disclosure proposed by a state, provided that the proposal was consistent with the purposes of the Act’s disclosure requirements.226 Florida and Oregon’s requests in the 1990s were denied,227 but starting in 2009 NHTSA approved requests by Florida, New York, Texas, Virginia, and Wisconsin to adapt their method of making odometer disclosures to
Automobile Fraud: 5.6.6.1 General
The content of the required mileage disclosures is essentially the same, whether made on the title, on a power of attorney, on a reassignment document, on a separate disclosure statement, or electronically.236 Model disclosure forms for these different situations are found in Appendices B, C, and E of the National Highway Traffic Safety Administration (NHTSA) regulations, reprinted in
Automobile Fraud: 5.6.6.2 Disclosure When Odometer Has “Turned Over”
Since at least 2000, car odometers have had six digits, so that an odometer will not “turn over” (that is, exceed its mechanical limits) until a million miles are reached. But, for older cars, odometers contained only five digits, so that the odometer would turn over at 100,000 miles. As these cars from the 1990s are exempt from disclosure requirements because of their age, the disclosure that an odometer has turned over is today only applicable when a transferor waives the exemption by making the disclosure.246
Automobile Fraud: 5.6.6.3 Disclosure When Transferor Indicates Inaccurate Odometer Reading
If a transferor certifies the odometer reading is inaccurate,252 the transferor must still disclose the actual mileage indicated on the odometer.253 The regulation states that “in addition to” the odometer reading at the time of the transfer, the transferor shall also make the certification as to whether or not that reading is accurate.254
Automobile Fraud: 5.6.6.4 Dealer Must Have Sufficient Basis to Claim That Odometer Is Not Accurate
Some dealers, in an apparent attempt to avoid liability under the Act, routinely mark all their disclosure forms to indicate that the odometer reading is not the actual mileage. In a series of opinion letters dating back to 1976, NHTSA has taken the position that such disclosures violate the regulation.261 A NHTSA opinion states: “[T]he practice of routinely certifying that the odometer reading is not the actual mileage and should not be relied upon, significantly inhibits enforcement of the federal odometer law.
Automobile Fraud: 5.6.6.5 When Lessor Transfers Ownership Without First Recovering Possession from the Lessee
A lessor, at either scheduled or early termination, may sell the leased vehicle to the lessee, in many cases without an opportunity to inspect the odometer at the time of transfer.
Automobile Fraud: 5.6.6.6 Cars Sold for Salvage
NHTSA originally took the position that when vehicles were sold for parts or salvage no odometer disclosure need be made.278 The determination that a vehicle was sold for parts or salvage depended on the good faith of the transferor. NHTSA then discovered that vehicles declared a total loss and sold for salvage were sometimes repaired and resold for use on the road.
Automobile Fraud: 5.6.6.7 When a Used Vehicle Is Assembled from Parts or Restored
To minimize the possibility of fraud, NHTSA requires that the actual mileage be disclosed even when a major part, such as an engine, has been replaced.284 When a vehicle has been reconstructed from several parts, the odometer should be set to that of the major mechanical or structural part with the highest mileage, if that is known, or to the mileage on the chassis.285 The Arkansas state odometer act has been interpreted even more strictly, requiring mileage disclosures not only for the front pa
Automobile Fraud: 5.6.6.8 When a Repair Shop Resets the Odometer
The Act requires that, after servicing, if the odometer does not reflect the same mileage as before, then the odometer must be adjusted to zero, and a written notice must be attached to the left door frame specifying the date of service and the mileage before service.289 In that case a transferor, in disclosing the mileage at transfer, does not indicate the sum of the mileage on the door frame sticker and the mileage on the odometer.290 The transferor instead discloses the mileage shown on the r
Automobile Fraud: 5.6.6.9 When Vehicles Have Been Towed
Owners of large recreational vehicles taking long trips may tow automobiles behind them to use while the recreational vehicles are parked at campgrounds. Some commercially available towing devices cause the odometers on the towed cars not to register. In fact, the disconnection of the odometer is advertised as a feature of these devices.
Automobile Fraud: 5.6.6.10 When Odometer Formerly Measured Kilometers Instead of Miles
Many odometers can be set to measure either kilometers or miles. NHTSA allows odometers that have measured kilometers to be reset to measure miles, with the resulting number being certified as the actual mileage, as long as the kilometer reading is accurate and the kilometers are correctly converted to miles.298
Automobile Fraud: 5.6.7.1 Content of Non-Mileage Disclosures
In addition to the disclosures about mileage, NHTSA regulations require the disclosure of additional information:
Automobile Fraud: 5.6.7.2 Signature Requirements
Every time a vehicle is transferred, both the transferor and transferee must sign the assignment, whether it is on the title, a reassignment form, a power of attorney, or an electronic disclosure. When there are multiple sellers or multiple buyers, NHTSA has stated that any one buyer and any one seller may sign the disclosure statement on behalf of all the buyers or sellers.304
Automobile Fraud: 5.6.7.3 NHTSA Authority to Require Non-Mileage Disclosures
NHTSA’s authority to require non-mileage disclosures is based on the congressional mandate to NHTSA to specify the “way in which information is disclosed,”311 which includes the authority to require additional, related disclosures to assist in the disclosure of the mileage information.312 A purpose of the Act, and the stated purposes of the disclosure regulations, is to help the buyer use an odometer reading to evaluate a vehicle’s condition and value as well as to prevent odometer tampering.
Automobile Fraud: 5.6.8 Acceptance of Incomplete Disclosures
The Federal Act prohibits anyone acquiring a motor vehicle for resale from accepting a disclosure unless it is complete.315 If a dealer provides an incomplete disclosure to a consumer, the consumer has not violated the Act. But if a wholesaler or a consumer selling a trade-in provides a dealer with an incomplete disclosure, the dealer has violated the Act even though it is the wholesaler or consumer that failed to provide the complete disclosures.
Automobile Fraud: 5.6.9 Record Retention Requirements for Dealers, Distributors, Auction Companies, and Lessors
NHTSA regulations create odometer record retention requirements that apply only to certain transferors and transferees: “dealers and distributors of motor vehicles,” “lessors,” and “auction companies.”316 A dealer is defined as a person that sold at least five motor vehicles during the prior twelve months to buyers that in good faith bought the vehicles other than for resale.317 A distributor is a person that sold at least five motor vehicles during the prior twelve months for resale.
Automobile Fraud: 5.8.1 When Intent Must Be Shown Under the Federal Act
The Federal Act has multiple intent requirements.
Automobile Fraud: 5.8.2 Need Intent Be Proven Under State Odometer Statutes?
Many state odometer statutes allow state enforcement actions without a showing of intent,347 and a few state odometer acts do not require a showing of intent in private actions.348 At one time Ohio interpreted its statute as a strict liability statute,349 but the state supreme court now requires that the defendant know of the violation.350
Automobile Fraud: 5.8.3 General Standards Concerning Proof of Intent
As intent to defraud is a necessary element of a private right of action under the Federal Act, the plaintiff must both allege such intent and present evidence of it.353 The plaintiff must allege intent to defraud with enough particularity to satisfy Federal Rule of Civil Procedure 9(b).354 But the plaintiff need only prove intent to defraud by a preponderance of the evidence, and not by clear and convincing evidence.355 The trier of fact will make
Automobile Fraud: 5.8.4 Inferring Intent from Proof of Odometer Tampering
Proof of odometer tampering raises a rebuttable presumption that the tampering was done with an intent to defraud.363 There are few legitimate reasons to tamper with an odometer, and the tamperer must carry the burden to prove that such a reason existed.364 As one court noted in a non-odometer case, “the odometer is designed to give accurate information about how far an automobile has traveled, and no reason for turning it back other than to deceive potential buyers can be imagined.”
Automobile Fraud: 5.8.5 Inferring Intent When Disclosure Conflicts with Prior Disclosures
Intent to defraud can be inferred when the mileage disclosed to a consumer is lower than the mileage disclosed to the dealer when the dealer purchased the car.368 When a dealer has received a disclosure form indicating that the mileage reading is inaccurate, an intent to defraud can be inferred when the dealer’s disclosure indicates the odometer reading is accurate.369
Automobile Fraud: 5.8.6 Inferring Intent from Failure to Disclose or from Dealer’s Circumvention of Disclosure Requirement
The weight of authority indicates that intent to defraud can be inferred when a dealer violates the Act by failing to provide a mileage disclosure statement.375 The mere failure to give a disclosure cannot be presumed to be inadvertent.376 The dealer is presumed to know of the disclosure requirement, even if a consumer may not be presumed to know the Act’s requirements.377
Automobile Fraud: 5.8.7 Inferring Intent When Inaccurate Disclosure Is Based on Incomplete Prior Disclosure
A dealer cannot defend its inaccurate or incomplete disclosure by stating that the prior disclosure was incomplete, and that was the best it could do.