- WHAT IS ODOMETER FRAUD?
- WHAT IS THE MOTOR VEHICLE COST INFORMATION ACT, ALSO KNOWN AS THE FEDERAL ODOMETER LAW?
- WHAT VEHICLES ARE SUBJECT TO THE FEDERAL ODOMETER LAW?
- WHAT ODOMETER DISCLOSURES MUST A CAR SELLER MAKE WHEN THEY SELL, LEASE OR OTHERWISE TRANSFER OWNERSHIP OF A CAR?
- WHAT RECORDS MUST BE KEPT BY AUCTION BUSINESSES AT WHICH CARS ARE SOLD?
- WHAT ODOMETER DISCLOSURES MUST BE MADE WHEN REPAIRS ARE PERFORMED TO A CAR’S ODOMETER?
- WHAT TYPE OF CONDUCT IS CONSIDERED ODOMETER FRAUD?
- WHAT ARE THE DAMAGES FOR ODOMETER FRAUD?
- WHAT OTHER TYPES OF REMEDIES ARE AVAILABLE IF I AM A VICTIM OF USED CAR SALE FRAUD?
This page provides answers to frequently asked questions about Odometer Fraud involving the sale of used cars in New Jersey.
NEW JERSEY ODOMETER FRAUD FREQUENTLY ASKED QUESTION #1
WHAT IS ODOMETER FRAUD?
You buy a used car at a used car dealership only to find out that the odometer was rolled back! If this describes your situation, you may be the victim of odometer fraud and therefore be entitled to damages and attorney’s fees! New Jersey odometer fraud (which is often a type of New Jersey Consumer Fraud Act violation) generally involves someone tampering with or altering the mileage that is stated on a vehicle’s odometer – the gauge that measures how many miles that the vehicle travels whenever it is moving. More specifically, the term “odometer” means an instrument or system of components for measuring and recording the distance a motor vehicle is driven, but does not include an auxiliary instrument or system of components designed to be reset by the operator of the vehicle to record mileage of a trip. Odometer fraud is usually committed to deceive a vehicle buyer of a vehicle into believing that a vehicle has traveled fewer miles than is actually the case.
NEW JERSEY ODOMETER FRAUD FREQUENTLY ASKED QUESTION #2
WHAT IS THE MOTOR VEHICLE COST INFORMATION ACT, ALSO KNOWN AS THE FEDERAL ODOMETER LAW?
The Motor Vehicle Information And Cost Savings Act, also known as the Federal Odometer Law, is a law passed by the Federal Government that protects people from odometer fraud. The Federal Odometer Law imposes civil liability on those who tamper with car odometers or fail to accurately disclose the mileage of vehicles. In passing the Federal Odometer Law, the United States Congress recognized the heavy reliance of a car buyer "on the odometer reading as an index of the condition and value of a vehicle;" "as an accurate indication of the mileage of a vehicle;" and "in deciding on the safety and reliability of the vehicle." The policy of the Federal Odometer Law is both to prohibit tampering with car odometers and to establish certain safeguards for the protection of car purchasers.
NEW JERSEY ODOMETER FRAUD FREQUENTLY ASKED QUESTION #3
WHAT VEHICLES ARE SUBJECT TO THE FEDERAL ODOMETER LAW?
The law applies to “motor vehicles” which means a vehicle driven or drawn by mechanical power and manufactured primarily for use on public streets, roads, and highways, but does not include a vehicle operated only on a rail line. Certain vehicles may be exempt from the Federal Odometer Law’s requirements so it is best to check with a lawyer about the limits of the law.
NEW JERSEY ODOMETER FRAUD FREQUENTLY ASKED QUESTION #4
WHAT ODOMETER DISCLOSURES MUST A CAR SELLER MAKE WHEN THEY SELL, LEASE OR OTHERWISE TRANSFER OWNERSHIP OF A CAR?
- A person transferring ownership of a motor vehicle shall give the transferee the following written disclosure:
- Disclosure of the cumulative mileage registered on the odometer.
- Disclosure that the actual mileage is unknown, if the transferor knows that the odometer reading is different from the number of miles the vehicle has actually traveled.
- A person transferring ownership of a motor vehicle may not violate a regulation prescribed under this section or give a false statement to the transferee in making the disclosure required by such a regulation.
- A person acquiring a motor vehicle for resale may not accept a written disclosure under this section unless it is complete.
- These requirements shall apply to all transfers of vehicles (unless otherwise exempted by the Secretary of the Department of Transportation by regulation), except in the case of transfers of new vehicles from a vehicle manufacturer jointly to a dealer and a person engaged in the business of renting or leasing vehicles for a period of 30 days or less.
- The term “new motor vehicle” means any motor vehicle driven with no more than the limited use necessary in moving, transporting, or road testing such vehicle prior to delivery from the vehicle manufacturer to a dealer, but in no event shall the odometer reading of such vehicle exceed 300 miles.
- The Secretary of the Department of Transportation may exempt such classes or categories of vehicles as the Secretary of the Department of Transportation deems appropriate from these requirements. Until such time as the Secretary of the Department of Transportation amends or modifies the regulations set forth in 49 CFR 580.6, such regulations shall have full force and effect.
- A motor vehicle the ownership of which is transferred may not be licensed for use in a State unless the transferee, in submitting an application to a State for the title on which the license will be issued, includes with the application the transferor’s title and, if that title contains the space referred to in paragraph (3)(A)(iii) of this subsection, a statement, signed and dated by the transferor, of the mileage disclosure required under subsection (a) of this section. This paragraph does not apply to a transfer of ownership of a motor vehicle that has not been licensed before the transfer.
- Under regulations prescribed by the Secretary of the Department of Transportation, if the title to a motor vehicle issued to a transferor by a State is in the possession of a lienholder when the transferor transfers ownership of the vehicle, the transferor may use a written power of attorney (if allowed by State law) in making the mileage disclosure required under subsection (a) of this section. Federal regulations: (i) prescribe the form of the power of attorney; (ii) provide that the form be printed by means of a secure printing process (or other secure process); (iii) provide that the State issue the form to the transferee; (iv) provide that the person exercising the power of attorney retain a copy and submit the original to the State with a copy of the title showing the restatement of the mileage; (v) may require that the State retain the power of attorney and the copy of the title for an appropriate period or that the State adopt alternative measures consistent with the Law, after considering the costs to the State; (vi) ensure that the mileage at the time of transfer be disclosed on the power of attorney document; (vii) ensure that the mileage be restated exactly by the person exercising the power of attorney; (viii) may not require that a vehicle be titled in the State in which the power of attorney was issued; (ix) consider the need to facilitate normal commercial transactions in the sale or exchange of vehicles; and (x) provide other conditions the Secretary of the Department of Transportation considers appropriate.
- A motor vehicle the ownership of which is transferred may not be licensed for use in a State unless the title issued by the State to the transferee— (i)
is produced by means of a secure printing process (or other secure process);
(ii) indicates the mileage disclosure required to be made under subsection (a) of this section; and (iii) contains a space for the transferee to disclose the mileage at the time of a future transfer and to sign and date the disclosure. This requirement does not require a State to verify, or preclude a State from verifying, the mileage information contained in the title.
- For a leased vehicle, the regulations prescribed under subsection (a) of this section shall require written disclosure about mileage to be made by the lessee to the lessor when the lessor transfers ownership of that vehicle.
- (2)Under those regulations, the lessor shall provide written notice to the lessee of: (A) the lessee’s mileage disclosure requirements; and the penalties for failure to comply with those requirements.
- The lessor shall retain the disclosures made by a lessee for at least 4 years following the date the lessor transfers the leased motor vehicle.
- If the lessor transfers ownership of a leased motor vehicle without obtaining possession of the vehicle, the lessor, in making the disclosure required by the Law, may indicate on the title the mileage disclosed by the lessee unless the lessor has reason to believe that the disclosure by the lessee does not reflect the actual mileage of the vehicle.
- The requirements of the Law on the disclosure of motor vehicle mileage when vehicles are transferred or leased apply in a State unless the State has in effect alternate motor vehicle mileage disclosure requirements approved by the Secretary. The Secretary of the Department of Transportation shall approve alternate motor vehicle mileage disclosure requirements submitted by a State unless the Secretary of the Department of Transportation decides that the requirements are not consistent with the purpose of the disclosure required of the Law.
NEW JERSEY ODOMETER FRAUD FREQUENTLY ASKED QUESTION #5
WHAT RECORDS MUST BE KEPT BY AUCTION BUSINESSES AT WHICH CARS ARE SOLD?
If a motor vehicle is sold at an auction, the auction company conducting the auction shall maintain the following records for at least 4 years after the date of the sale:
- the name of the most recent owner of the motor vehicle (except the auction company) and the name of the buyer of the motor vehicle.
- the vehicle identification number.
- the odometer reading on the date the auction company took possession of the motor vehicle.
NEW JERSEY ODOMETER FRAUD FREQUENTLY ASKED QUESTION #6
WHAT ODOMETER DISCLOSURES MUST BE MADE WHEN REPAIRS ARE PERFORMED TO A CAR’S ODOMETER?
- A person may service, repair, or replace an odometer of a motor vehicle if the mileage registered by the odometer remains the same as before the service, repair or replacement.
- Anyone who repairs or replaces an odometer and it no longer registers the same mileage as before its repair or replacement (if the mileage of a vehicle following its repair cannot remain the same), the person must adjust the odometer to the “0” mark and then place a disclosure sticker on the vehicle’s left door frame.
- A person may not, with intent to defraud, remove or alter a notice attached to a motor vehicle as required by the Law.
NEW JERSEY ODOMETER FRAUD FREQUENTLY ASKED QUESTION #7
WHAT TYPE OF CONDUCT IS CONSIDERED ODOMETER FRAUD?
To prohibit odometer fraud and to protect motor vehicle purchasers, under the Federal Odometer Law, the following conduct if committed intentionally may be fraud:
- Advertising, selling, using, installing or having installed in a motor vehicle a device that causes its odometer to register the wrong mileage.
- Disconnecting, resetting, altering or having disconnected, reset or altered a motor vehicle’s odometer in order to change the actual mileage stated on the odometer.
- Operating a motor vehicle if the operator knows that its odometer is disconnected or not operating if the action is taken with the intent to defraud.
- Removing or altering a notice attached to a motor vehicle as required by the Federal Odometer Law, if the action is taken with the intent to defraud.
- Engaging in a conspiracy to violate the odometer repair and odometer disclosure sections of the Federal Odometer Law.
NEW JERSEY ODOMETER FRAUD FREQUENTLY ASKED QUESTION #8
WHAT ARE THE DAMAGES FOR ODOMETER FRAUD?
If a person is the victim of another’s intentional violation of the Law, the wronged person may bring a case against the wrongdoer. If the victim wins the lawsuit, the victim can recover:
- Money damages in the amount of 3 times their actual damages or $10,000 whichever is greater.
- Reasonable attorney's fees.
- Court costs, including the fees for filing the lawsuit.
NEW JERSEY USED CAR INSPECTION FREQUENTLY ASKED QUESTION #9
WHAT OTHER TYPES OF REMEDIES ARE AVAILABLE IF I AM A VICTIM OF USED CAR SALE FRAUD?
In addition to violating the Federal Odometer Law, New Jersey odometer fraud may also be a violation of other consumer protection statutes, such as the New Jersey Consumer Fraud Act. This is because the Odometer Fraud Law isn’t intended to point out each and every situation that might result in a court finding that a used car dealer committed odometer fraud. If a dealer commits fraud involving a vehicle’s odometer, the customer may prove that they have a claim separate from or in addition to an odometer fraud law claim. For example, any of the following affirmative acts committed by a New Jersey used car dealer might support a New Jersey Consumer Fraud claim or breach of contract claim or breach of warranty claim against the dealer:
- “Unconscionable commercial practice” - an activity which is basically unfair or unjust which materially departs from standards of good faith, honesty in fact and fair dealing in the public marketplace. To be unconscionable, there must be factual dishonesty and a lack of fair dealing.
- “Deception” - conduct or advertisement which is misleading to an average consumer to the extent that it is capable of, and likely to, mislead an average consumer. It does not matter that at a later time it could have been explained to a more knowledgeable and inquisitive consumer. It does not matter whether the conduct or advertisement actually have misled the customer. The fact that the business may have acted in good faith is irrelevant. It is the capacity to mislead that is important.
- “Fraud” - a perversion of the truth, a misstatement or a falsehood communicated to another person creating the possibility that that other person will be cheated.
- “False pretense” - an untruth knowingly expressed by a wrongdoer.
- “False promise” - an untrue commitment or pledge, communicated to another person, to create the possibility that that other person will be misled.
- “Misrepresentation” - an untrue statement made about a fact which is important or significant to the sale/advertisement, communicated to another person to create the possibility that other person will be misled. A “misrepresentation” is a statement made to deceive or mislead.
For any of the above affirmative acts, it is not necessary for liability under the New Jersey Consumer Fraud Act that a person actually be misled or deceived by another’s conduct. It is not necessary for the customer to show that the business intended to deceive. What is important is that the affirmative act must have had the potential to mislead or deceive when it was performed. The capacity to mislead is the prime ingredient of affirmative consumer fraud claims Proof of intent is not necessary an essential element for these affirmative acts
A business may also be found liable for violating the New Jersey Consumer Fraud Act if the business knowingly concealed, hid/suppressed, kept something from being known/omitted, or left out or did not mention an important or significant fact purposely or with the intent that others would rely on that concealment/suppression/omission in connection with the sale/advertisement of any merchandise. For these acts of omission, a person acts “knowingly” if he/she is aware that his/her conduct is of a nature that it is practically certain that his/her conduct will cause a particular result. He/She acts with knowledge, consciously, intelligently, willfully or intentionally. To “conceal” is to hide, secrete, or withhold something from the knowledge of others or to hide from observation, cover or keep from sight or prevent discovery of. “Concealment” is a withholding of something which one is bound or has a duty to reveal so that the one entitled to be informed will remain in ignorance. To “suppress” is to put a stop to a thing actually existing, to prohibit or put down, or to prevent, subdue, or end by force. “Suppression” is the conscious effort to control or conceal unacceptable impulses, thought, feelings or acts. A person acts “purposely” if it is his/her conscious object to engage in conduct that of a certain nature or cause a particular result and he/she is aware of hopes or believes that the attendant circumstances exist. “Intent” is a design, resolve, or determination with which a person acts. It refers only to the state of mind existing when an act is done or omitted. It is not necessary that any person be, in fact, misled or deceived by another’s conduct. What is important is that the business must have meant to mislead or deceive when he/she/it/they acted. The fact that the business acted knowingly or with intent is an essential element of acts of omission and knowledge or intent must be shown. Where the alleged consumer fraud can be viewed as either an omission or an affirmative act, the business is liable for the conduct as an omission only where defendant committed a consumer fraud by omission and intent is shown.
If a consumer proves that a used car dealer violated the New Jersey Consumer Fraud Act, the consumer may be able to recover the following remedies against the dealer:
- Treble damages for an ascertainable loss of money or property caused by the New Jersey Consumer Fraud Act Violation.
- Attorney’s fee award for prosecuting the claim.
- Cancellation of fraudulent debts.
- Refund of money lost due to the New Jersey Consumer Fraud Act Violation.
TO LEARN MORE, GET A NO OBLIGATION CONSULT
Call Perlman DePetris Consumer Law for a no obligation phone consultation. Handling your case wrong from the beginning may only cost you more money and time in the end!! Try to do it right the first time by seeking legal advice from a competent lawyer! You might be entitled to be represented on a contingent basis, meaning that the attorney won’t get paid unless the case is successful and that the lawyer gets paid from your recovery instead of requiring you to pay attorney’s fees out of your own pocket up front. Other cases can be handled for a relatively small one-time payment of an up-front fixed attorney’s fee and with a contingent fee at the end of the case. Filing a claim yourself is very risky, since businesses often hire experienced defense attorneys to fight your case. Also, if you try to negotiate a settlement yourself, you may get less money than you deserve. You should always speak with an attorney before coming to any conclusions about your claim. Do not try to interpret the law by reading a website! Even if the facts of your case do not fit the requirements of a Lemon Law, you may be entitled to sue the manufacturer or its selling dealer for a breach of your warranties under other state and federal laws. If the manufacturer or selling dealer breached the warranties that came with your vehicle, you may be able to recover money damages, attorney’s fees and court costs.
While this page gives some general background information, there is the danger that relying on this information alone could lead you to lose your claim. Laws and regulations frequently change and the law may have changed since the posting of this webpage. Factual differences between your case and cases described on this webpage can affect your chance of success. Don’t attempt to rely on the internet as the only source of information for your claim! Instead, get competent legal advice from a New Jersey licensed attorney. Call Perlman DePetris Consumer Law for a no obligation phone consultation.