Types of Fraud | Most Consumers Do Not Follow This Advice | Protect Yourself

The Thorndike Barnhart Student Dictionary defines "Fraud" as "(in law) any deliberate misrepresentation of the truth or a fact used to take money, rights, etc., away from a person or persons."

Planning on buying a used car soon? Then first open your eyes - very wide. In our office, we've seen it all, and more. Judging from the number and type of cases that come into our office, fraud is common on used car lots, and may be getting worse.

There are various types of fraud:

What kinds of fraud can be perpetrated on a used car buyer? To name a few, forging your signature on a document, rolling back or replacing the odometer, falsifying figures or terms on a lease, lemon laundering, and lying about the previous ownership history. One of the most common types of fraud encountered by our
clients is being sold a used car which later turns out to have extensive presale collision damage.

Often the consumer, before purchasing the vehicle, asks the salesman if the car was ever in an accident and the salesman replies something like this: "Absolutely not! If it had been in an accident I couldn't sell you this vehicle even if I wanted to." Sometime later, when you discover to your chagrin that the car indeed had sustained major collision damage, the salesman's false claim may play back in your mind, but be assured that the salesman is never going to admit to having made such a pronouncement.

Required Disclosure:

Actually, a lot of dealerships have become more brazen about committing fraud and will claim they are not obligated to disclose any accident damage to a consumer before the sale. They will even hire defense attorneys to spout this line, even though it is completely false. Vehicle Code 9990 lists four types of damage which must be disclosed: damage exceeding three percent of the manufacturer's suggested retail price of the vehicle or $500.00, whichever is greater; damage to the frame or drive train; damage which occurred in connection with a theft of the vehicle; and damage to the suspension of the vehicle requiring major repair. Additionally, these frauds are in violation of several parts of California Civil Code 1770, "Unlawful Methods of Competition, Unfair or Deceptive Acts" and fall under one or more definitions of deceit under Civil Code 1710.

The Moral of the Story Is:

Don't believe anything a used car salesperson tells you, especially if they aren't willing to put it in writing. Just don't buy it if you hear, "The previous owner is starting a family and just needed a bigger car" or "The vehicle was kept in mint condition and belonged to the owner's wife" or the salesman's uncle, brother-in-law, etc. For all you know, the car could have sustained massive collision damage, been declared a "total loss" by the insurance company, then sold to an auction without a salvage title, from whence it finally ended up before you on the used car lot. Before you buy, get the vehicle checked out by a good mechanic and a good auto body repair facility. Also, demand a copy of the car's repair history.

Most consumers unfortunately do not follow this advice:

Then, a few weeks after purchase the death trap is rattling down the road, literally falling to pieces. The consumer takes it in to a body shop for an inspection, which reveals that the car had sustained severe collision damage, and its structure consists of twisted metal and bondo. The consumer is told that the vehicle can never be repaired adequately to make it safe, or that to do so would cost thousands of dollars.

Starting Your Case:

This is the point at which your case can begin. Armed with the inspection report (which should include color photos highlighting the accident damage), you are ready to do battle with the dealership that ripped you off. Try to make suitable arrangements so that you won't have to use the vehicle if the inspector tells you its not safe to drive. Write up a diary detailing everything which transpired to this point, complete with dates, first and last names, telephone numbers, and all misrepresentations made to you, etc. Write a certified letter to the dealer giving the facts and demanding your money back.

Don't be surprised

At this point, the unethical used car dealership will try to blame it all on you. This callous attitude may be difficult to comprehend, but it is nevertheless commonplace. The dealership will claim that it was <you> (bold underlined) who caused the collision damage, or deny that there is any, or, if there is, they had no way of knowing but (somehow which is not explained) you should have known, or that the damage is very minor, etc. These are "boilerplate" defenses and you should not be surprised to hear them since used car dealerships are in no way inclined to admit that they defrauded a consumer, no matter how blatant, calculated and contemptible the fraud was. Even if the dealership later agrees to settle with you out of court, it will want you to sign a "release agreement" stating that the settlement is "of a disputed and doubtful claim" and containing a "confidentiality clause" effectively covering up their misdeed.

Prospects for the Case:

Generally, cases involving dealer fraud are slower to settle than good lemon cases for a variety of reasons, so get set for a possible long haul. It will most likely require you to hire an attorney to file a complaint and litigate the case. The first thing you need to do is get a good, thorough inspection of the vehicle detailing all of the damage noted. Keep in mind that in the legal sphere, complete and accurate documentation is vital.

Please protect yourself:

The suffering that unscrupulous used car dealerships cause to unwary consumers is difficult to forgive and hard to forget. We have seen a lot of people who are strapped financially get into real predicaments. They pay top dollar for a used car which almost immediately becomes un-drivable. They are stuck with making car payments for a vehicle they can't even use. They can't afford to buy another car and at the same time pay for this one. If they stop making payments, the car may be repossessed and this then helps ruin their credit, and finally the consumer's hopes have been utterly dashed. To help avoid getting yourself into this depressing predicament, again, do not believe any "sales puffery" about the car from the dealership and do take the vehicle in for an inspection by both a qualified mechanic and body shop before you buy it. Be a "doubting Thomas". By doing so, you may save yourself both money and headaches.