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Transcript: Thursday, January 27, 2005, 11 a.m. ET

Odometer Fraud

Richard C. Morse
Director, Office of Odometer Fraud Investigations - NHTSA
Thursday, January 27, 2005; 11:00 AM

Richard C. Morse directs the Office of Odometer Fraud Investigations at the National Highway Traffic Safety Administration (NHTSA).

Each year, there are more than 450,000 cases of odometer fraud in the United States. The cost to American consumers is well over $1 billion.

While any vehicle sold on the used car market can be subject to odometer tampering, this problem is most common among late-model vehicles that have accumulated high mileage in a short time. These include many vehicles that have come off lease or were part of business fleets.

NHTSA investigates odometer fraud for criminal prosecution by the U.S. Justice Department. The agency also provides funding and support to state enforcement agencies conducting odometer fraud investigations. And it helps consumers who suspect they’ve been victims of odometer fraud. NHTSA can assist victims recover their losses through private civil actions.

The transcript follows.

Editor's Note: Washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.


Richard C. Morse: Good morning, thanks for joining me. I've run the odometer fraud program for the National Highway Traffic Safety Administration since it was started in 1978. I'm passionate about the issues and about educating the public on what remains an enormous consumer problem. Let the questions roll!


Alexandria, Va.: I thought odometer tampering was a thing of the past. How bad is the problem now?

Richard C. Morse: Yes, it is still a tremendous problem. According to a study conducted by NHTSA in 2002, there are more than 450,000 cases of odometer fraud each year in this country. We estimate that this costs the car buying public more than $1 billion annually.


Anytown, USA: Who is really responsible for committing most odometer fraud? I've heard it's the car dealers. But other people say it's usually the individual owners who roll back their odometers before they trade in their cars.

Richard C. Morse: Actually, we find that most odometer fraud is committed by wholesale auto dealers. These wholesalers often buy high-mileage trade-ins from retailers, as well as business cars from leasing companies. They refurbish these vehicles cosmetically, alter the mileage on the titles, roll back the odometers, and then sell the cars to retail dealerships. Less than one percent of the complaints of odometer fraud that we receive involve individuals rolling back odometers on their own cars.


Washington, D.C.: If I suspect someone is rolling back odometers, to whom should I report my suspicions? Can I remain anonymous?

Richard C. Morse: You can report anyone suspected of being involved with odometer fraud to NHTSA's Office of Odometer Fraud Investigations. You can write the agency at 400 Seventh St S.W. Room 6130 Washington, D.C., 20590, call its odometer fraud office directly at (202) 366-4761, or via the Vehicle Safety Hotline at 1-888-327-4236. Information received from the public greatly assists our law enforcement efforts. We take every precaution to ensure the anonymity of sources of information. You can also report suspected violations to state or local enforcement agencies, such as your local department of motor vehicles, or your state attorney general.


D.C. Metro area: I just put a new motor in my car. Can I reset the odometer to zero?

Richard C. Morse: No. It's illegal to reset the odometer with intent to change the number of miles the vehicle has traveled. The odometer reading must reflect the mileage of the vehicle as a whole, not the mileage of its various components.


Brooklyn, N.Y.: NHTSA can assist people who are victims of odometer fraud through civil actions. How is this done and wouldn't most monetary awards be of the small claims court variety?

Richard C. Morse: Unfortunately, the federal government can't assist a consumer in a civil action to recover losses due to odometer fraud. There's no provision in the law for this. What NHTSA can do, however, is provide information about ways to prove the fraud and take action in court. We can tell you what documents to assemble and who to take them to in your state. Also, if you wish to provide us with information about the suspected fraud, we will review it to see if we should initiate a criminal investigation. We really appreciate the help of consumers in our law enforcement efforts.


Boston, Mass.: Do cars with electronic odometers ever get clocked?

Richard C. Morse: "Clocked" is industry jargon meaning to roll back a vehicle's odometer. Digital or electronic odometers are just as easy, if not easier, to roll back than the mechanical instruments. It's true that crooks need more expensive equipment to roll back electronic odometers. But cost is not a deterrent - because the illegal profits of odometer fraud can be huge. The big problem for consumers is that it may not be possible to detect that an electronic odometer has been tampered with.


Rockville, Md.: Do people ever really go to jail for tampering with odometers, or is this just a civil violation?

Richard C. Morse: Yes, people go to jail. During 2004 alone, for example, prison sentences ranged from eight months to seven years for cases investigated by NHTSA. Fourteen people were sent to prison as a result of these cases last year. Also, those convicted in 2004 paid more than $3 million in restitution to defrauded consumers.


Anonymous: Is there an award for turning in individuals and dealerships suspected of odometer fraud?

Richard C. Morse: There is no monetary award offered by NHTSA.


Fort Wayne, Ind.: I purchased a '95 Pontiac Grand Am in 2001. Recently, I found out that the odometer was rolled back 4700+ miles. Through the DMV, I traced the odometer readings and found that it had to happen while in the car was in the possession of the dealer I bought it from. What recourse do I have to rectify the situation?

Richard C. Morse: We'd like to hear more about this car. If true, it sounds like a possible case of fraud. If you provide us with information, we'd be happy to look into it and see if it warrants a criminal investigation. Again, our phone number here at NHTSA is: 202-366-4761.


Montgomery Village, Md.: Is there an area of the country where odometer fraud is more likely?

Richard C. Morse: It is a prevalent nationwide problem; however, there are "hotbeds" of odometer-related fraud in areas such as New York, New Jersey, Pennsylvania, and Texas. This is due, in part, to vehicle demand and high-volume wholesale markets. Cars from these wholesale markets end up being sold all across the country.


Austin, Texas: How can you tell if a used car has had its odometer rolled-back?

Richard C. Morse: Normally, it's difficult to detect odometer fraud with a cursory inspection of a vehicle. That's because the crooks know what consumers look for and they take care to hide or correct the indicators through cosmetic refurbishing.

However, one sign may be excessive wear on the pedals, floor mats, and seats. Also, if the mileage is less than 30,000, the vehicle should still have its original tires. That means that a vehicle with new or mismatched tires could have a rolled-back odometer. Also, missing screws around the dashboard - or any other indication that the dashboard has been removed or disassembled - could be a sign of fraud.

But keep in mind that no one of these "signs" necessary indicates odometer fraud. To truly protect yourself, we recommend that you take any used vehicle you're considering buying to a reputable, experienced mechanic. The mechanic should be able to conduct a thorough inspection of the car, particularly the mechanical parts, to determine if the wear and tear is consistent with the odometer reading. Usually the crooks don't do mechanical work - for the obvious reason that it's so expensive.


Tacoma, Wash.: When cars come down from Canada, is it legal to change their odometers over from kilometers to miles?

Richard C. Morse: Yes it is legal, but it is not required. Canadian cars that are going to be sold in USA must have speedometers that reflect miles instead of kilometers.


Kansas City, Missouri: Where do you find investigators with the knowledge and skills needed for the work that you do?

Richard C. Morse: We look for people with a strong background in criminal investigation work. It's a plus for us if we find someone with experience investigating vehicle fraud cases.

Besides our Washington, D.C. headquarters, NHTSA has odometer fraud investigators in four regional offices. We have people working on cases in the Northeast, Southeast, Midwest and West.


Columbia, Md.: If Carfax shows that their is no sign of the odometer being tampered with would you be fairly confident that the mileage on a car was correct?

Richard C. Morse: There are several online companies that provide access to databases for a fee. These companies get their mileage information from state motor vehicle departments, inspection stations, insurance companies, maintenance facilities, auto auctions, and other sources. Unfortunately, these databases are only as reliable as the information they obtain. I'd use them as a good starting point when you're trying to analyze the history of a vehicle.


Washington, D.C.: Good morning - I'm submitting my question a bit early - I was curious - is it considered fraud if your car's odometer breaks on its own and the miles you drive while its broken are not recorded? Thanks in advance for the information!

Richard C. Morse: The crime is based on an intent to defraud. However, to be safe, if a vehicle has been driven with a broken odometer, it should be disclosed at the time of sale. This is less of an issue with newer cars equipped with on-board computers because the mileage is usually captured in other places.


Arlington, Va.: Odometer fraud exists, but what's the reason that this is considered a problem? If you have a car inspected, you should be able to find out if there is anything wrong with the car and I've certainly seen cars that are lemons regardless of what the odometer says.

Richard C. Morse: Odometer fraud is a major problem for consumers because they rely on the mileage to assess the value and reliability of the vehicle. They're cheated if they acquire a car that's worth less than they paid. Often, they have much higher repair bills than expected. Plus, they may falsely believe that the car is under warranty when, in fact, the warranty has expired.

Sadly, the people who can least afford to suffer the costs of odometer fraud are most often its victims. They may not have the money to get a car inspected before they make a purchase.

Certainly, some used cars with true odometer readings are lemons! But that doesn't mean odometer fraud isn't a huge problem.


Bethesda, Md.: RE: Odometer setting... so what if my speedometer broke and I buy a whole instr. panel from a junkyard? That odometer will be incorrect... then what?

Richard C. Morse: The replacement odometer should be set to reflect the vehicle's true mileage. If that is not possible, the odometer may be reset to zero. But then it is required that a sticker be placed on the doorjamb indicating the date of the replacement and mileage of the odometer replaced.


Arlington, Va.: Does odometer fraud ever involve other types of vehicles... like SUVs, pickups or vans?

Richard C. Morse: Absolutely, all types of passenger vehicles are involved.


Richard C. Morse: Thanks to everyone who has joined us today. We've received many more questions than time allowed us to answer. So you can take our invitation and phone us at NHTSA with your additional queries. Again, our number is: 202-366-4761.


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