What is odometer fraud and what is consumer fraud?

Short Answer about consumer fraud and odometer fraud

What is odometer fraud?      Selling or transferring a car knowing that the odometer is wrong or has been altered

Is odometer fraud consumer fraud?      Selling or transferring a car knowing that the odometer is wrong or has been altered or JUST selling a vehicle with an incorrect odometer reading.

In certain ways odometer fraud is a very simple concept. They are both state and federal laws dealing with odometer fraud. The basic concept is that if a seller of an automobile, or a transferor of an automobile, or where that the odometers and correct or has been tampered with in any way, there is an obligation to disclose same on the odometer disclosure statement. If you disclose same on the odometer disclosure statement that the mileage is improper were not accurately reflected on the vehicle would not have any liability either under the federal or state odometer law.
The federal law on odometer fraud requires the proving of knowledge of the mileage. However, the liability under state law does not require the same level of proof. Obviously, if you prove that an individual sold the vehicle or transferred the vehicle knowing the mileage was incorrect there is a claim for fraud. The basic defense to this claim is that there was disclosure. Naturally fraud claims carry the penalty punitive damages. However, it gets dicey when you are dealing with transferring or selling used motor vehicles where the seller claims ignorance or were unaware of the odometer discrepancy.


New Jersey has addressed this in various cases including Cuesta Classic Motor Car. In this case the seller of the vehicle sold the vehicle without properly documenting the mileage. In short the mileage was incorrect as represented on the vehicle and on the odometer disclosure statement. He claimed he was not aware of such a discrepancy. However, the court determined that such knowledge is not required and the affirmative misrepresentation of fact, been the mileage, sufficient to warrant liability under the New Jersey Consumer Fraud Act. The court then continued that the person who purchased the car and is making a consumer fraud claim have the burden to demonstrate that there was a reduction in value or loss attributable to the difference in the mileage. Usually in the circumstances the value would be reduced by half which is commonly known as selling a vehicle with total mileage unknown or TMU.

This case demonstrates that no intent is required if the odometer is incorrect on the subject vehicle. It is enough that the representation as to the mileage was made and reduced the value or resulted in ascertainable loss. There are other claims under New Jersey law require higher burden of proof including material omission of fact and common law fraud. In both of these circumstances the individual who purchased the vehicle and was pursuing a claim under the Consumer Fraud Act would require to prove intent to defraud. The difference in these cases be the standard of proof. In the Consumer Fraud Act case would be a bright preponderance of the evidence and in the fraud case it would be by clear and convincing evidence.
If you as a plaintiff are pursuing a consumer fraud case for an improper odometer reading a turned back odometer or some other issue with the odometer it is necessary to get an expert in most circumstances. In some circumstances you might not need an expert if you resold the vehicle at a loss or attempted to resell it and got a lowered offer. Based on the circumstances of the case these types of factual scenarios might permit you to make a claim for an ascertainable loss that obtaining an expert witness. Obviously each case completely should be addressed on its own and the facts behind each case need to be addressed to see when and if an expert would not be needed.