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  • Writer's pictureReza Yassi

Federal Odometer Act: Protecting Buyers from Fraudulent Intent

Image of an odometer, a vital tool for preserving truth and protecting buyers from fraudulent practices, as discussed in the Federal Odometer Act.
Preserving Truth: Odometer as a Guardian against Fraud

When buying a used car, accurate information is imperative to informed decision-making. Recognizing this, in 1972, Congress enacted the Motor Vehicle Information and Cost Savings Act, more commonly known as the Federal Odometer Act. The statute prohibits tampering with motor vehicle odometers and provides safeguards to protect purchasers in selling motor vehicles with altered odometers. Specifically, the act covers the following:

1. Odometer Disclosure: The law requires that the seller of a motor vehicle must disclose the vehicle's accurate mileage to the buyer at the time of sale. This must be in written form and must include the vehicle's mileage at the time of transfer, the dates of the transfer, the identities of the transferor and transferee, and the vehicle's make, model, and year.

2. Prohibition of Tampering: The act makes it illegal to alter, disconnect, or tamper with an odometer in a way that changes the number of miles indicated.

3. Resale of Altered Vehicles: The act prohibits the sale of a vehicle if you know the odometer reading is incorrect unless the buyer is notified in writing that the mileage is not the actual mileage.

4. Penalties: Under the Act, plaintiffs are entitled to treble damages (three times the amount lost) and attorney’s fees. Additionally, a buyer who is a victim of odometer fraud may be able to bring private legal action against the seller.

5. Exemptions: The act has specific exemptions. For example, vehicles that are 10 years old or older or weigh more than 16,000 pounds are exempt from the odometer disclosure requirements.

A plaintiff must allege two elements to make a claim under the Federal Odometer Act. The first element requires a showing of violation of the Act, and the second is a showing of intent to defraud. A dealer violates the Act when he fails to disclose the accurate mileage set forth on the odometer or fails to disclose that the actual mileage is unknown if the dealer knows that the odometer is not accurate.

Courts have held that the “intent to defraud” requirement is not limited to actual intent. For example, in Enobakhare v. Carpoint, LLC, the court held that intent to defraud could be based on gross negligence or recklessness. Additionally, in Auto Sport Motors, Inc. v. Bruno Auto Dealers, Inc., the court held that a dealer could be liable “in the absence of actual knowledge if he reasonably should have known that the odometer reading was incorrect.” The dealer cannot avoid learning of the discrepancy in the odometer. If factual circumstances would generally alert a dealer to a discrepancy, he must investigate.

In Townsend Bros. v. Pippin, a dealer purchased two vehicles from the defendant. After learning that the defendant misrepresented the vehicle’s mileage, the dealer sold the car at auction at a highly discounted rate. The court awarded the plaintiff three times the difference between the purchase and auction prices and ordered the defendant to pay the plaintiff’s attorney’s fees.

The Federal Odometer Act is a vital tool to protect consumers like you from deceitful practices in the market. Yassi Law is here to provide you with the guidance and legal support you need. Don't hesitate to reach out if you suspect odometer tampering or have fallen victim to fraud. Together, we will explore your options, pursue justice, and ensure your rights are upheld under the Federal Odometer Act. Take the first step towards securing the compensation you deserve by contacting Yassi Law today.


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