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We handle cases across the United States. Allen Stewart is licensed to practice law in Texas, California, New York, Pennsylvania, Missouri, North Carolina, Ohio and Arizona.

Know the Common Types of Dealer Frauds

Most automotive dealers are honest businesspeople simply trying to make a living and provide consumers with a pleasant car buying experience. However, some dealers think they can at best cut corners and skim a little off the top, and at worst deliberately deceive you to fill their own pockets. If you feel as if your dealer ripped you off, you may be entitled to compensation following a successful fraud claim. An experienced, qualified auto fraud attorney can help review your claim and decide whether pursuing it further will get money back in your pocket.

Both state and federal anti-fraud laws protect American consumers when an unscrupulous vendor tries to take advantage of you. Texas consumers specifically are protected by the Deceptive Trade Practices Act of 1973. The Act protects consumers against unfair business practices that harm or mislead them and provides the means and legal framework to get compensation. The first step no matter what when you feel a dealer did you wrong is to contact a trustworthy auto fraud lawyer. They know all the required steps and procedures needed to get you justice.

One of the most overwhelmingly common dealer scams is odometer fraud: the act of obscuring a vehicle’s true mileage by tampering with the vehicle’s odometer. By misrepresenting how many miles a vehicle has, the dealer can then sell the vehicle for a higher price. Odometer fraud is a federal crime in the United States, after being codified in law with the Truth in Mileage Act of 1986. You can sue a dealership for selling you a vehicle with a tampered-with odometer, and those responsible could possibly face criminal penalties as well. Catching odometer fraud is slightly easier on a mechanical odometer as crooked numbers with uneven spacing show up easily. Modern odometers are digital and can be tampered with digital tools found online for roughly $100.

For more information on arbitration and other frequently asked odometer fraud questions, click here.

Wear and tear uncharacteristic of a low-mileage vehicle can indicate odometer fraud. Something as easily overlooked as an overly worn brake pedal can indicate the vehicle is older or was more heavily driven than the mileage shows. Worn brake pads and discs, belts, pumps, clutches and flywheels can also indicate higher miles than what the odometer shows. Another way to spot odometer fraud is finding direct signs the odometer was tampered with, including missing dashboard screws, scratches on or near the instrument cluster, or fingerprints inside the cluster itself opposite of the side facing the driver.

Another way a car dealer can defraud you is by selling you a previously flooded vehicle. Flooded cars (specifically, cars pulled from flood waters) can eventually be cleaned and resold, but internal flood damage lingers within the vehicle and can wreak havoc on important components. Flood water can rot wiring and corrode internal systems, making a vehicle a rolling death trap. Hurricanes and other natural disasters often generate many flooded vehicles that should be scrapped, or at least sold with titles branding them as flooded or salvaged vehicles.


Auto fraud attorney Andrew Ross with Allen Stewart, P.C. said dealerships are not required by law to disclose if a vehicle was in an accident unless the buyer asks the seller about known prior accidents.

“Used vehicles are primarily sold ‘as is,’ meaning the vehicle does not have a warranty,’ Ross said. “However, this does not mean that a seller can lie to the buyer if asked about prior accidents. As such, lying about prior accident damage is significantly worse.”

Ross said if the dealership lied about past crash damage when asked, or provided a falsified vehicle history, you may have legal recourse and you should contact a lawyer as soon as possible.

If you think you have been a victim of odometer fraud, contact Allen Stewart. The consultation is free.

“The buyer’s potential claims must be brought within a certain period of time after a date determined by law,” he said. “If the buyer does not bring their claim within that time, they will be forever barred from pursuing their claims by the statute of limitations.”

Ross recommends getting any damage you suspect occurred before purchase verified by a third party mechanic and getting an estimate for the repair cost. He also recommends ordering a CARFAX vehicle history report as well.

A less common form of auto fraud that can be potentially deadly is airbag fraud. Airbag fraud occurs when a crashed vehicle is repaired and instead of replacing the airbag with a brand new one, they replace it with an airbag from a different wrecked vehicle in which the airbag did not deploy. This can save dealers money, but salvaged airbags can potentially fail to deploy in a crash, putting the driver in danger.

Failing to disclose or deliberately concealing damage to the vehicle before selling it can also possibly be considered fraudulent behavior. Whether that damage occurred because of flooding, a past crash or any other reason, the dealer can be held liable if they hide or lie about said damage. They can also be held liable if they knowingly provide you with inaccurate information regarding past damage as well.

Are you a victim of odometer fraud? Contact Allen Stewart today.

Other scams bad dealers try include spot delivery scams, incorrect credit scoring or unnecessary credit pulls. Spot delivery scams happen when a consumer finances a vehicle through the dealership under a lower interest rate only to have the dealer claim the financing “fell through” after the consumer takes possession of the vehicle. The dealer then convinces the consumer to return and sign new paperwork under different, less favorable terms.

Incorrect credit scoring scams occur after a consumer finalizes price negotiations with the salesperson. The dealership’s loan officer then tells the consumer their credit score disqualifies them from financing, or financing at a specified promotional rate. Customers either must finance the vehicle at a higher interest rate or walk away entirely.

If you feel like your car dealer was dishonest or otherwise ripped you off, contact the law offices of Allen Stewart P.C today. Contacting a lawyer is the single most important step you can take for the health of your claim, and the attorneys of Allen Stewart P.C. have many years of successfully standing up for their clients in and out of the courtroom. They will work with you every step of the way and keep you updated throughout the lifespan of your claim. The sooner you reach out, the better your chances of success. Contact Allen Stewart P.C. today.

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