Types of Auto Dealer Fraud
The Real Story Behind CarfaxThe Real Story behind Carfax
Dealers often use Carfax as a tool to reassure consumers that the car they are purchasing does not have a negative history. However, Carfax information is often not up to date and incomplete. We have seen dealers increasingly take advantage of the lag time between an accident and the information getting to Carfax. The dealer will buy a car at auction knowing it has been wrecked. But the dealer will know that the wreck history is not yet showing up on Carfax. The dealer will then market the car as a clean Carfax car. For a story about Carfax, see http://www.cbc.ca/marketplace/2009/vehicle_history_reports/main.html. A more comprehensive vehicle history report is available from Autocheck.com.
The Window StickerThe Window Sticker
We often see car dealers represent that a car is of a certain quality, including that it may be covered by a "warranty" or the "remainder of the factory warranty". The FTC Used Car Buyer's Guide Regulations require that there be a window sticker affixed to the window of every used car shown for sale and that the window sticker accurately list whether the car was a warranty or is sold "as is" or without warranties. Dealers will often remove the window sticker which was on the car and contains the representation and then have the customer sign a "window sticker" which is marked "as is". When the customer comes to complain and ask for warranty service, he is shown the latter form and warranty is denied.
Wrecked and Salvaged AutosWrecked & Salvaged Autos
More frequently than one may believe, dealers sell cars that were previously wrecked or salvaged without disclosing this to the consumer. Dealers may also sell cars which were stolen and later recovered without disclosure. Cars may be sold without air bags (air bags are expensive to replace and are often left off repaired wrecks). Here in the Southeast, we are seeing many cars which were flooded (either in the Louisiana flooding events or the Georgia flooding events) being sold without disclosure.