The National Highway Traffic Safety Association estimates consumers will lose billions of dollars to odometer fraud this year. Despite efforts to combat odometer fraud - including tougher laws and increased enforcement - consumers are increasingly at risk to this age-old scam. Even digital odometers, which were thought to be less susceptible to tampering, can be cracked.


One Victim's Story
"The car was about 5 years old, looked to be in great condition, and I paid $6,000 for it," says Sarah Evenson. "I'd heard about rollbacks, but I was very surprised when I found out it had been done to my car." Sarah thought she'd gotten a great deal on the used car she bought through a private seller, but it wasn't long before it was giving her serious headaches.

"It was burning oil. So I took it in to a dealer, and rather than deal with the repairs, I figured I'd just trade it in," she explains. The dealer Sarah visited was a CARFAX subscriber, who ran a report on the car using its vehicle identification number (VIN). He had bad news for her; a previous owner had pulled off a classic used-car scam-odometer fraud.

"The CARFAX report showed the car's odometer had been rolled back about 40,000 miles," Sarah said. Since the dealer could only offer her $900 for the car, Sarah decided to go ahead and spend $3,000 to replace the engine.

"It's really a huge problem," explains Jack Gillis, Consumer Federation of America and author of The Car Book. "We estimate 1 in 10 cars has their odometer rolled back. Sellers obviously make more money if a car's mileage is deflated."

Clocking an odometer is an industry term meaning a vehicle's odometer or documentation (or both) have been altered and the difference not disclosed to the buyer. It is illegal in every state. Auto experts say it's relatively easy to do. Not only does it affect the value of the car, it also makes it more likely the buyer will pay for repairs down the road.

"If the car has a lot more miles than the odometer indicates, the probability of major repairs and lots of little things going wrong is greatly increased," says automotive expert Pat Goss, co-host of PBS's Motorweek. Car buyers can't always tell by just looking at a used car if its odometer has been rolled back. Digital odometers, thought to be the answer to odometer tampering and fraud, are as easy, if not easier, to alter as their mechanical predecessors.

"Unscrupulous people using relatively inexpensive software and devices-available legally for recalibrating faulty odometers-can reprogram digital odometers," explains Larry Gamache, director of communications for CARFAX.

"In Sarah's case, when it turned out her odometer had been rolled back, the value of her car instantly dropped by nearly $5,000," says Gamache. "On top of that, she had to spend an additional $3,000 on repairs. An odometer discrepancy uncovered in a detailed vehicle history report can indicate that an odometer may have been rolled back-this should be a big red flag for consumers."

Detecting Odometer Fraud

It can be difficult, but not impossible to detect when a vehicle's odometer has been altered. CARFAX has compiled the following tips to help used car buyers detect odometer fraud:

• Ask to see the title and compare the mileage on it with the vehicle's odometer. Be sure to examine the title closely if the mileage notation seems obscured or is not easy to read.
  
  
• Compare the mileage on the odometer with the mileage indicated on the vehicle's maintenance or inspection records. Also, search for oil-change and maintenance stickers on windows or door frames, in the glove box or under the hood.
  
  
• Request a CARFAX Vehicle History Report to check for odometer discrepancies in the vehicle's history. If the seller doesn't have a vehicle history report, use the car's VIN to order a CARFAX vehicle history report online.
  
  
• Check that the numbers on the odometer gauge are aligned correctly. If they're crooked, contain gaps or jiggle when you bang on the dash with your hand, walk away.
  
  
• Examine the tires. If the odometer on your car shows 20,000 or less, it should have the original tires.
  
  
• Look at the wear and tear on the vehicle-especially the gas, brake and clutch pedals-to be sure it seems consistent with and appropriate for the number of miles displayed on the odometer.

Digital Odometers

Unfortunately, digital odometers that have been tampered with are even harder to detect than traditional mechanical odometers (since they have no visible moving parts). A vehicle's condition and a detailed history report are the best clues a buyer has for determining whether clocking has occurred.

Auto manufacturers developed the digital odometer, in large part, to alleviate the problem of odometer tampering. Unfortunately just as quickly as the technology is developed, scam artists learn how to use it for the wrong reasons. In this case, they are using the very tools meant to correct mileage on digital odometers to rollback odometers. And it is as easy as surfing the Internet.

Digital odometer calibrators are being purchased online, and despite "disclaimers" from sellers, are being used to perpetrate odometer fraud.

"Just like a hacker can do damage to a computer, someone with the right software and hardware can make a digital odometer read whatever number they want," explained Pat Goss, Automotive Expert and Co-Host of PBS MotorWeek in a video news release. "There are all kinds of problems that used cars have which are virtually undetectable to the untrained person. Digital odometer fraud is one that's becoming more common."

"People mistakenly think digital odometers can't be rolled back, but this scam has gone high-tech. Foreign companies are selling software on the Internet, so that anyone who wants to roll back even a digital odometer can do it," Jack Gillis of the Consumer Federation Of America and author of The Car Book in the video release.

Federal Truth in Mileage Act (TIMA)

The Federal Truth in Mileage Act (TIMA) requires sellers to provide actual, truthful odometer readings and to disclose any known inaccuracies. TIMA makes odometer fraud a felony. Failure to disclose that an odometer has been changed or repaired (altered in any way) and/or falsifying mileage documentation will result in fines and/or imprisonment.