Uncovering Odometer Fraud
"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; someone 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 have their odometer rolled back. Sellers obviously make more money if a car's mileage is deflated."
“Clocking” or “spinning” are terms used to describe the altering of a vehicle’s odometer and/or documentation to show fewer than the actual mileage. 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 increases the likelihood for costly repairs to occur sooner than later.
"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 are reprogramming digital odometers using relatively inexpensive software and devices made for legally recalibrating faulty odometers. They’re easily found through an Internet search and unfortunately being used to rip off unsuspecting consumers,” 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. A CARFAX® Vehicle History Report™ can show odometer discrepancies that may indicate an odometer may have been rolled back, which should raise a big red flag for consumers.”
Unfortunately, digital odometer tampering is even harder to detect than tampering of a traditional mechanical odometer (since digital odometers have no visible moving parts). A vehicle's condition and a CARFAX Vehicle 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. However, 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.
Says Goss, "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. 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," Gillis explains.
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.
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: