Car Dealer Fraud Law


Car Dealer Fraud Law





Auto Dealer Fraud Law Firms
Auto Dealer Fraud Law refers to the many fraudulent, deceptive and unlawful practices used by automobile dealers during advertising, pricing negotiation, and sales and financing of a vehicle. These fraudulent practices can occur during almost any stage of the vehicle purchasing process.

The scams included in auto dealer fraud are many and varied; they include, but are not limited to the following:

• Bait and Switch, a form of false or deceptive advertising, where the dealer advertises a vehicle at an enticing price, but when the potential customer comes into the dealership, says the advertised vehicle or deal is no longer available and then pressures the customer to purchase a more expensive vehicle, or the same vehicle at a higher price;

• Add-On Concealment, where various optional add-ons are included in the final sales price without disclosure;

• Vehicle Trade-In Undervaluation, where the dealer purposefully undervalues or underpays for a customer’s trade-in vehicle;

• Negative Equity/Vehicle Trade-In Overestimation, where the customer’s trade-in vehicle is worth less than the amount owed, but the dealer misrepresents the value, deceptively elevating it to the owed amount and often adds the difference to the new vehicle’s price;

• New Dealer Returns, where the dealer misrepresents and sells a vehicle as “new”, when it was actually returned to the dealership because of a defect or persistent mechanical problem;

• Failure to Disclose a Salvaged or Flood-Damaged Vehicles (related to vehicle title fraud), where a used vehicle is sold to the customer without disclosing that the vehicle has incurred significant damage, been designated as a salvaged vehicle pursuant to a car accident, or has been flood-damaged;

• Odometer or Mileage Rollback (related to vehicle title fraud), where a used vehicle has had its odometer altered to conceal the vehicle’s true mileage;

• Packing, where the dealer quotes the customer an inflated monthly payment, and after the customer accepts the agreement, adds optional accessories to attain the quoted monthly amount;

• Certified Used Vehicles, where certain manufacturers and dealerships implement certified used vehicle programs that are supposed to guarantee that the used vehicle is in good working order and free from major structural damage, but then label unqualified vehicles as “certified”; and

• Rewritten Contracts/Backdating, where the customer does not qualify for the financing terms of the originally agreed upon contract, so the dealer has the customer return to sign a new contract with different terms, but backdates the new contract with the date of the original contract.

In many states, victims of auto dealer fraud are required to contact the auto dealer first to afford the dealer the opportunity to resolve the problem, before the victim can pursue legal action against the dealer. If the dealer fails to resolve your issue, you may then consult an attorney knowledgeable in auto dealer fraud to determine if you should proceed with a civil lawsuit.

Lemon laws are differentiated from auto dealer fraud. Lemon law claims arise from problems or defects with the vehicle itself, whereas auto dealer fraud deals with the deceptive practices an auto dealer uses to sell the vehicle. Visit Us at Google+ Copyright HG.org

Auto Dealer Fraud Law - US

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    Car buying scams cost unsuspecting car buyers thousands, upon thousands of dollars on a daily basis. This equates to many millions of dollars on a yearly basis. It's well worth a small investment of your time to learn about some of the most common scams in use today. Doing so will keep you off the 6 o'clock news as the latest victim of a car dealer scam.

  • Federal Lemon Law - Magnuson-Moss Warranty Act

    The complete text of the Magnuson Moss Warranty Act appears below. This warranty law is called the Federal Lemon Law. It was created in 1975 and it has remained virtually unchanged ever since. This federal warranty law is designed to require certain minimum warranty rights and disclosures to be given to all consumers on virtually all consumer products that cost more than $15.

  • NHTSA - Odometer Fraud

    Odometer tampering continues to be a serious crime and consumer fraud issue. In 2002, NHTSA determined this crime allows more than 450,000 vehicles to be sold each year with false odometer readings, milking American car buyers out of more than $1 billion annually.

  • Spot Delivery Scams

    The spot delivery scam is one of the most commonly used scams in the car business today. Although, it's not necessarily always a car buying scam, it is still very frustrating and can lead to a nasty surprise.

  • USDOJ - Fraud Section

    The Fraud Section plays a unique and essential role in the Department's fight against sophisticated economic crime. The Section is a front-line litigating unit that acts as a rapid response team, investigating and prosecuting complex white collar crime cases throughout the country.

  • Vehicle History Report - Autos AOL

    A vehicle history report prepared by a third party is one way to help know what you're getting into. Combining information from state DMVs (Departments of Motor Vehicles) and Canadian RMVs (Registry of Motor Vehicles) as well as police reports and other sources across the country, a vehicle history report can give you valuable details about where the car has been.

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Organizations Related to Auto Dealer Fraud Law

  • American Association of Motor Vehicle Administrators (AAMVA)

    The American Association of Motor Vehicle Administrators (AAMVA) is a tax-exempt, nonprofit organization developing model programs in motor vehicle administration, law enforcement and highway safety. The association also serves as an information clearinghouse in these areas, and acts as the international spokesman for these interests.

  • National Motor Vehicle Title Information System (NMVTIS)

    This system allows the titling agency to instantly and reliably verify the information on the paper title with the electronic data from the state that issued the title. The Anti Car Theft Act of 1992 was enacted to deter trafficking in stolen vehicles by strengthening law enforcement against auto theft (Title I), combating automobile title fraud (Title II), preventing "chop shop" related thefts (Title III), and inspecting exports for stolen vehicles (Title IV).

  • National Odometer and Title Fraud Enforcement Association (NOTFEA)

    The National Odometer and Title Fraud Enforcement Association (NOTFEA), formed in 1980 to protect consumers from costly odometer and title fraud crimes. The Association has active members in every State, except Hawaii. NOTFEA meets once a year (August-September), to share new ideas, training and investigative methods, new criminal trends and case prosecution at the State and Federal level.

  • Stop Auto Fraud

    Car-dealer fraud is plaguing our country. Auto buyers are being taken to the bank to fill the pockets of unscrupulous dealers. The tactics used are so sly that even informed consumers who did their homework are being taken for hundreds, and often thousands, of dollars. Evidence from recent litigation and an industry insiders shows that it is very likely that this rot is not restricted to a few areas or dealerships.

Publications Related to Auto Dealer Fraud Law

  • National Association of Consumer Advocates - 6 Quick Steps to Avoid Auto Fraud

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  • Top 10 Auto Scams

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  • Used Car Buyers Guide

    When you are ready to buy a car, one of the most economical ways to accomplish that is to consider buying a used car. It's likely that used cars will mean less money out of pocket―both in purchase price and cost of registration and titling, as well as lower insurance premiums (depending on the car).

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