Beware: Odometers can now be rolled back remotely
A warning to dealers: Odometer rollback has gone high-tech. It is much easier to do now than when the problem surfaced years ago. All thatês needed is a criminal mind and an investment of less than $1,000. But it can cost dealers thousands of dollars per vehicle and embroil them and their employees in costly civil suits and felony criminal indictments not to mention the havoc that rollback can wreak on a dealerês reputation.
In late 2013 CarFax estimated that more than one million vehicles on U.S. roads had rolled odometers. Estimates of the resulting loss range from $4,000 to $8,000 per vehicle.
A criminal can buy a device over the Internet to hack into a carês computer system, attach the device to the OBD port and program in the new mileage. Odometer fraud, of course, violates federal and state criminal statutes.
To avoid being a victim of odometer fraud, consider the following:
« Adopt procedures to detect it. These can include checking service records and CarFax, Experian or other reports for mileage discrepancies.
« Use enhanced inspection procedures, such as inspecting for wear and tear that does not match the mileage in areas such as tires, seats, floors and gear shifts.
« Be wary if a customer has no previous sales or service relationship with you, but tries to terminate a lease at your dealership.
« Focus on whether the mileage on a vehicle makes sense for its previous use. For example, it is unlikely that a rental vehicle or taxi that has been in operation for three years would have only 15,000 miles on the odometer.
« Develop detection reports to help spot internal and external fraud. For example, if most salespeople put customers in leases of 12,500 or 15,000 miles per year but one salesperson puts almost all customers in 10,000-mile leases, that may be a warning sign that the salesperson is part of an effort to roll back odometers before lease termination. It may be an especially big warning sign if a lower percentage of the 10,000-mile lease customers than the 12,500-or-higher-mileage customers incur excess mileage charges at lease termination.
« Report any instances of suspected odometer fraud to appropriate authorities, such as the National Highway Traffic Safety Administration (202-366-4761) or the NHTSA Toll-Free Hotline at 888-327-4236, TTY 800-424-9153.
Thanks to Alan J. Skobin, vice president and general counsel of the Galpin Auto Group, for this information. Skobin served for nine years as a Los Angeles police commissioner and has more than 40 years of sworn law enforcement experience.Download Bulletin PDF