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.
