5 Most Common Types of Dealer Fraud
Are you in the market for a new car? Take a look at the following list of most common dealer scams before you make your purchase. Knowing about the common dealer fraud scenes will help you throughout the process and will reduce your chances of becoming a victim of a fraudulent transaction.
Odometer rollback fraud is when the used car is sold without disclosing the actual mileage of the vehicle. The intention of concealing the mileage on the odometer is a case of dealer’s fraud, which is a “red alert” for the customer.
Vehicles with lower mileage are usually well kept and are sold at a higher price. Often fraudulent dealers purchase a vehicle with a really high mileage at a low price, roll back the numbers on the odometer and sell it to a consumer at a high price. Cars with a high mileage break down a lot more often and the owner takes on high costs of repairs. When purchasing a used vehicle, make sure you get a statement or verification that the vehicle displays the actual mileage. A good place to check on this is to use a vehicle history report like CarFax or AutoCheck.
UNDISCLOSED FRAME DAMAGE OR SALVAGE TITLE
Vehicles with a frame damage or salvage title as a result of a previous accident should be avoided as well. By law, dealerships have to disclose all material damages associated with the vehicle that they know about. A vehicle history report is once again a valuable tool to check if the vehicle has suffered any damages in the past.
YO-YO FINANCE SCAM
This type of fraud is also known as the “spot delivery scam”. This scam involves the signing of the second contract for 2 common fraudulent reasons: (a) the financing with the lower rate did not go through, so you have to sign a new contract at a higher rate to be able to keep the car; (b) the dealer claims that they got you a better deal that will lower your monthly payments.
When faced with the first scenario, you should know that if this happens the dealership has 10 days to find you financing or cancel the contract. If the 10 days pass, they have to honor the contract no matter what. If they cancel or recall your contract within those 10 days, you are entitled to ALL money paid as a down payment and other fees/taxes. In the second scenario please be careful, why would a dealership call you back and give you money back? Usually, they increase the number of payments to make it look like you are paying less. Be careful, read everything before you sign another contract.
If they cancel or recall your contract within those 10 days, you are entitled to ALL money paid as a down payment and other fees/taxes. In the second scenario please be careful, why would a dealership call you back and give you money back? Usually, they increase the number of payments to make it look like you are paying less. Be careful, read everything before you sign another contract.
BAIT AND SWITCH FALSE ADVERTISING SCAM
Through deceptive advertising, dealers mislead the potential consumers labeling the actual status of the vehicle improperly. As advertising is one of the most important components of any business, dealers may apply every step to catch the eye of potential consumers. This is also considered illegal and a “bait” case, which is an enforceable action and punishable.
These types of dealer fraud are the most common but not the final fraud scenes. There are as many swindles as the human brain can bring to life. The most important factor is the realization that you are subjected to unfair treatment.
If you have had a trouble with a new or used vehicle that you purchased or leased, contact the Law Office of Hovanes Margarian. Even if you are not sure if you have a case, the office can determine this for you.