Odometer Fraud

Documented in the United States from the 1950s as used-car sales grew; Congress made it a federal offence in 1972 and NHTSA published its national estimate in 2002.

Rolling back mechanical odometers with a drill or by swapping gears was common enough that the US passed the Federal Odometer Act in 1972 and the Truth in Mileage Act in 1986. Digital odometers were supposed to end it but instead created a market for $100-$500 'mileage correction' tools that rewrite the reading in minutes. NHTSA's 2002 study estimated 450,000 vehicles a year sold with false readings at a cost of over $1 billion, figures it still cites. Recent US cases involve dealers or brothers rolling back hundreds of cars by an average of more than 100,000 miles and laundering titles through several states.

A seller buys high-mileage cars at auction, uses a diagnostic tool to reset the digital odometer to a fraction of the true figure, and obtains a replacement title, sometimes in another state, that omits the earlier disclosure. The car is sold privately or through a small lot at a price justified by the low mileage. Buyers discover the truth only when service records or a history report show a higher earlier reading, by which time the seller has moved on.

A $200 mileage-correction tool changes a reading in minutes and adds $2,000-$5,000 to a car's price; titles can be 'washed' through states with lax disclosure. NHTSA estimates 450,000 cases a year but its odometer-fraud unit brings only a few dozen prosecutions annually, so detection rates are very low.

NHTSA estimates that more than 450,000 vehicles a year are sold in the US with false readings, costing buyers over $1 billion annually. The largest recent case, the Gali brothers in New York, involved about 690 cars and $3.9 million in restitution. Buyers also face unexpected breakdowns and unsafe cars serviced on the wrong schedule.