Auto Fraud

Most people have no sense how popular automobile dealership fraud really is. Many experts believe that most dealership fraud goes undiscovered, for the sake of dealers hiding it. The consumers are unable to discover it because they don't expect to be a victim of fraud.

Few things can be more aggravating in the purchase of a vehicle than to find out that it has sustained prior material accident damage that was not disclosed. In Indiana, it is illegal to sell as new a vehicle that has sustained damage (except to the glass, radios, tires or bumpers) of more than 4% of its MSRP without disclosing it to the purchaser. This is true whether the damage was repaired or not. Vehicles sold as Certified Pre-Owned vehicles, meanwhile, must live up to the dealership's advertised certification standards. Further, the dealer is required to provide truthful responses to questions (to the best of his knowledge) regarding a new or used vehicle.

Dealership fraud can take many other forms as well. Here are some of the more common schemes:

• Odometer rollbacks
• Dealer kickbacks from lenders
• Unauthorized credit checks
• Financing fraud, by the failure to properly value or credit the trade-in
• So called "yo-yo" deals, where the dealer later calls back and indicates the financing fell through
• Financing fraud, by rolling negative equity in the trade-in into the cost of the new vehicle
• Loan packing (adding unwanted items to the sale and raising the monthly payment minimally)
• Sale of a bought back lemon vehicle without disclosure
• Phony contests, "specials" or other false advertising
• Financing fraud, by failing to make certain disclosures in a lease transaction
• Financing fraud, by backdating loan documents
• Sale of demo vehicles (vehicles used by manufacturer or dealer representatives) or unwinds (vehicles previously sold, then returned, usually because of financing problems) as "new" vehicles