You might never have heard of it, but it's a type of
fraud that affects nearly half a million vehicles and
costs American consumers more than $1 billion every
year. It's called odometer fraud.
Fraudsters looking to boost profits on the sale of a
vehicle roll back the numbers on an odometer,
duping buyers into thinking the car has fewer miles on
it than it does.
American buyers lose an average of $4000 a year to
fraudsters and most don't even know they have been
hit.
We would like to see justice for the individual that pays
$45,000 for a car that's only worth $15,000.
Average used vehicle prices rose from about $20,000 in
December 2019 to about $27,000 in December 2022.
Supply chain disruptions and shortages in new vehicle
inventory have pushed more customers to the used
market, which in turn is pushing up prices.
That's also making used vehicles more scarce.
I can't tell you for sure, but I suspect with the
recent surge in used car prices that it's become a
more enticing tactic for scammers.
Anyone can be a victim.
And as vehicle technology improves, so does the
technology criminals use.
This is Kevin Porter.
He and his five colleagues' jobs are to investigate
cases where people tamper with car odometers to
defraud customers or dealers.
It is a bit of a stealth crime, one that can be very
hard to detect.
A lot of our victims, they don't know they're victims
until we reach out to them.
Often that first interaction is explaining to
somebody this vehicle that you just paid $14,000 for,
it could have been bought at auction a week earlier for
$1,000.
A single case of odometer fraud can and usually does
involve several other crimes which carry their own
penalties. For example, every car comes with a
title. That title typically has the mileage on the car
at the time of sale.
If you falsify the mileage on the title to the car,
which you pretty much have to do if you change the
odometer, you have also committed title fraud.
If the vehicle is financed through a loan and the loan
terms factor in the false low mileage as an indicator
of value ,that's bank fraud.
Sometimes a fraudster will buy a car and then sell it
without putting their own name on the title in order
to avoid detection.
That can be charged as aggravated identity theft
because they are essentially pretending to be
the person they bought the car from.
Another example is wire fraud.
Say if the vehicle is posted on the internet,
social media or websites, or if the seller is using
text messages to communicate with buyers
about the vehicle, then if you mail the paperwork, that
is mail fraud.
Odometer fraud carries a maximum sentence of three
years, but the other forms of fraud that accompany it
can increase a prison sentence by years or even
decades. Lieutenant Jason Shrader is an inspector with
the North Carolina Department of Motor Vehicles
outside Charlotte.
The search warrant of a 2008 GMC Yukon.
Like other sworn officers in his department, he carries a
gun, a badge and handcuffs.
All right. Let's see what we can do with this one.
Shrader and his colleagues investigate car dealerships,
used car lots, auto shops and any other location where
they have reason to believe people are rolling back or
otherwise tampering with odometer and title
information.
A lot of complaints come from this area of Charlotte
right here.
A pretty big hotbed for people curbstoning cars or
selling vehicles, dismantling cars, towing
cars, storing cars, anything you can think of
with cars.
Once they make arrests, they seize and search vehicles
looking for evidence the odometer has been tampered
with. Search warrant in the matter of a 2010 Jeep Grand
Cherokee. The number of victims in any given case
can also be staggering.
Cases involving only a few vehicles and others
involving thousands.
Sometimes a customer with a lease will roll back an
odometer before turning the car back in in order to keep
the car under the mileage specified by the lease term.
Sometimes a dealership will roll back an odometer on a
used car or a car coming off a lease and then try to
sell that car online.
Sometimes it's just independent sellers.
We've had cases where individuals buy a higher
mileage vehicle, maybe a 300,000 mile SUV.
They roll the odometers back to 30,000 miles and
then they'll stage that vehicle out in an accident.
And then insurance is paying out at the lower
mileage value for the vehicle.
Porter's office has also seeing cases where people
will roll back odometers to defraud a dealership into
thinking work on the car is covered by warranty.
About 10.5 million cars on U.S.
roads are estimated to have had their odometers tampered
with in some way.
About 20% of those have had their odometers rolled back,
a 7% increase over the previous year.
Everybody from all walks of life could be affected by
this. It's not just one demographic of people or one
class of people.
So this is typical odometer cluster from some vehicles.
Let's just say hypothetically, you had a
2010 Nissan Altima that you wanted to sell.
If you went to pull apart and found a matching Nissan
Altima with a lot lower mileage on the cluster, you
could pull that cluster, take it home and replace it
in the car that you have, and now your vehicle's value
just increased because the mileage is lower.
It might not seem like a lot, but the average loss to
a customer is about $4,000.
In addition to the difference in vehicle price,
there can also be higher taxes, higher maintenance
bills and higher insurance.
Experts think there is a lot of this type of crime
going undetected, primarily because it's very difficult
to detect.
There's several very prominent cases that I've
worked over the past few years where we had hundreds
of vehicles involved, but the rollbacks on all those
vehicles did not show up on any vehicle history report
you could buy.
Fraudsters seek out cars with gaps in their vehicle
reporting history, which often includes vehicles
serviced at home or vehicles serviced at shops
that for whatever reason aren't logging and reporting
mileage on the car.
They would research the vehicle history.
If there was a recent reporting, say, within the
past 12 months that blocked them from rolling back the
mileage, they wouldn't buy it.
They would go onto the next one that had the latest
reporting was maybe three years ago.
Cars older than 20 years are not required to have their
mileage stated on the title.
This also makes them attractive targets for
fraudsters. Discovery often happens because one customer
will notice something wrong with the car and report it
to a local consumer protection bureau.
From there, a case gets built.
Just enough information to start digging into that
dealership, those individuals. There's a
tremendous amount of this fraud that's occurring all
across the country.
When most odometers were analog counters on the
dashboard, rolling back an odometer was a matter of
manually turning back the numbered dials.
20 years ago, we could turn the numbers back by hand.
In the children's book and adapted motion picture
"Matilda," the eponymous character's father brags to
the family that he rolls back odometers using a power
drill.
Two directions drill.
You run it backwards, the numbers go down.
Watch your speedometer.
In the film "Ferris Bueller's Day Off," the
characters erroneously believe they can roll back
miles on an odometer by suspending the car on
cinderblocks and running it in reverse.
The miles aren't coming off, go in reverse.
It doesn't end well.
What did I do?
Today, with digital odometers, the increased
technical sophistication of a computerized dashboard has
not stymied criminals.
Many digital odometers can be manipulated just by
plugging a device into a car's computing port and
punching in some numbers.
People think everything's digital, so everything
should be pristine.
But the reality is that for a few hundred bucks, con
artists can buy devices that will let them roll back
thousands of miles instantly.
As you can see, I'm on Google, vehicle or odometer
tools. You have all these different mileage
correction, odometer adjustment diagnostics tool,
professional automotive scanner, Odometer adjustment
tool, $28.99.
Odometer Mileage Correction, OBD Diagnostic tool, $399 on
eBay. So you can see that they range from different
manufacturers, different makes and different pricing
depending on how much and how in-depth of the
technology that you want to get.
Other devices are harder and might require pulling out
parts of a dashboard.
However, they are far from undefeatable.
There's different levels of skill that it's going to
take, but we've not come across a vehicle that can't
have its odometer rolled back.
To be clear, buying an odometer correction tool is
not illegal. There are cases where you can lawfully
use one, such as if your odometer breaks.
The more recent fraud we're seeing involves mileage
blockers. These are devices that ship from overseas that
you can download an app for your smartphone and turn
your odometer on and off with the click of a button.
If you drive your car for 1000 miles, your odometer is
only going to register 100 miles.
Obviously, those devices are illegal and should not
be used, but we see those in growing numbers showing
up here in the United States.
No, rolling back is necessary.
The owner can still take the car into service shops,
allow them to log the miles on the odometer, and
eventually sell the car with what looks like a full
history of regular service on a low mileage vehicle
when the actual mileage might be far higher.
Those are the ones that kind of keep you up at night
because those are more difficult. There's other
ways we get to those individuals that are doing
it, those fraudsters.
Ultimately, like other frauds, odometer fraud has
real-world impacts on real people.
My dad was actually a victim of odometer fraud.
He bought a car out of South Carolina and the
odometer had been rolled back 65,000 miles.
And he didn't contact me.
He didn't do his research and he didn't know who the
guy was or where he bought it from.
It was a very good deal on a vehicle and he fell for
it. So if it's too good to be true, it probably is.
And if it doesn't feel good in your gut, then don't do
it.