Auto Sales Fraud
The used vehicle market is extremely competitive. In Minnesota alone, there are about 2,500 licensed used car dealers. It’s no surprise, then, that some shady actors will cut corners to get a leg up. The most common type of fraud I see is concealing serious defects like odometer rollbacks, accident history, and branded titles.
It’s my opinion that buying a used car should not expose you to hidden structural damage, altered mileage, or title defects. Since 2009, I’ve represented consumers in Minnesota in auto sales fraud cases involving odometer rollbacks, undisclosed salvage vehicles, title problems, serious frame damage, and financing fraud.
Odometer Rollbacks
It should come as no surprise that both federal and state law prohibit tampering with or misrepresenting a vehicle’s mileage. A vehicle’s mileage is perhaps the most important factor when a person is shopping for a car and the law recognizes that a buyer should be able to rely on the mileage listed on the odometer at the time of sale.
I’ve handled cases against dealers who rolled back an odometer themselves and against dealers who knew the mileage had been altered, even if the actual rollback was done by someone else. In both cases, the law provides strong remedies for this type of auto fraud: statutory damages of at least $10,000 under federal law, along with attorney fees and litigation costs.
I am able to handle odometer cases in both Minnesota and Western Wisconsin.
Learn more about odometer rollbacks.
Salvage and Flood Vehicle Fraud
Minnesota law requires that a dealer disclose any title brands, including salvage and flood brands, to the buyer at the time of purchase. And even if the vehicle’s title isn’t branded, Minnesota’s Consumer Fraud Act arguably requires disclose of a prior accident or flood.
With the widespread use of dealer-only vehicle auctions, it is very easy for a shady dealer to buy a vehicle with serious accident damage for a bargain-basement price, make cheap, cosmetic repairs, and then sell the vehicle off to an unsuspecting buyer for for full price.
The problem with this is twofold. First, a prior-accident vehicle is worth only a fraction of a clean vehicle. So the unsuspecting buyer overpaid for the vehicle. Second, prior-accident vehicles often have frame damage that renders them unsafe and shady dealers never repair this unseen damage before selling the vehicle off.
I’ve handled many cases against Minnesota used car dealers involving prior accident and salvage vehicles.
Learn more about salvage or flood vehicles.
Title and Lien Problems
Another come form of auto fraud is failure to provide the vehicle’s title. This usually happens when a financially-strapped dealer’s financing company is holding the vehicle’s title as collateral because the dealer isn’t paying its bills. Title problems are not mere paperwork issues. Without clear title, you cannot lawfully sell or refinance the vehicle. And you can’t get it back if your vehicle is impounded for any reason. It’s simply unconscionable to sell a vehicle without a title.
Fortunately, Minnesota law provides powerful remedies. I’ve helped many clients who never received title sue shady Minnesota car dealers.
Learn more about common title problems.
How These Cases Work
Not every vehicle problem justifies litigation. The strongest cases typically involve:
A clear misrepresentation by the dealer
Documented discrepancies in mileage, title, or accident history
Financial loss that is significant relative to the purchase price
Auto fraud cases often allow for statutory damages, attorney fees, or revocation of acceptance. This fee-shifting structure is what makes litigation viable for used car buyers because I’m able to take these cases on a contingency fee arrangement.
Auto fraud cases are heavily driven by the documents. Prospective clients will help their potential case immensely by keeping organized records of all their interactions with the dealer. Key evidence often includes purchase agreements, buyer’s guides, odometer disclosure statements, advertisements, text messages, title records, vehicle history reports, and inspection findings.
What To Do Right Now to Help Your Case
If you suspect dealer fraud:
Preserve all purchase documents, advertisements, and communications.
Obtain vehicle history reports such as Carfax or AutoCheck.
Request title history from Minnesota Driver and Vehicle Services.
If you suspect an accident for flood, get a written inspection report with photographs and repair estimates.
Avoid signing new agreements or returning the vehicle without legal advice.
Ready to talk to a lawyer about auto sales fraud?
Schedule a consult with auto fraud attorney Todd Murray.
Since 2009, Todd has been helping Minnesotans combat fraudulent auto sales by used car dealers. His work has returned hundreds of thousands of dollars to his clients’ pockets and has improved the legal protections for used car buyers throughout the state. Todd’s clients have described him as “very professional and easy to work with.” He lives in Minneapolis with his wife and four children.