Auto Fraud


You love the idea of having a new car, but you hate buying one. The sales process at most car dealerships is rarely pleasant. Most car dealers work very hard to make sure that at every point in the sales process, you are at a disadvantage. Even the physical layout of most car dealerships is designed to put you at a psychological disadvantage and maximize the dealership’s ability to sell at the highest price possible.

There is nothing illegal about most of this. However, many car dealers aren’t satisfied with the advantages they can legally obtain. When they cross the line and engage in fraudulent practices, you can turn to an attorney like me for help.

Yo-Yo Sales

Some dealers love to yo-yo their customers. This is slang for the practice of selling you a car, then calling you a few days later and telling you that the sale fell through, typically because financing allegedly could not be found. You are told that the original contract has to be torn up and the deal rewritten on new terms. The new terms are almost always worse for you. If you object and try to walk away from the deal, the dealer often claims that your trade-in has been sold, that your down payment cannot be refunded, or that an exorbitant “rental fee” is due for the use of the car you thought you just bought. These sales practices are almost always based upon fraud, and typically violate a number of the state and federal laws that apply to car sales.

Recycled Wrecks

Have you ever dreamed of getting two cars for the price of one? Welcome to the world of salvage vehicles. These severely wrecked vehicles cannot legally be sold to the public unless they go through an extensive reconstruction and re-inspection process. Some dealers circumvent these rules by lying about the history of the car and fraudulently obtaining a regular title. In some cases, they actually weld the remains of two different cars together. These cares are truly unsafe at any speed. This kind of sale is obviously illegal. If you have purchased one of these cars, you may have claims against the seller, the re-builder, and possibly the insurance company that paid the accident claim on the vehicle.

You don’t have to be sold a salvage vehicle to have a claim against a dealer for selling you a wrecked car. Any kind of wreck damage which impairs the value of the vehicle or interferes with the use of the vehicle, whether repaired or not, must be disclosed by the seller if he knows about it. Most car dealers have professionals who inspect their incoming used cars and are aware of these defects. Even if the dealer who sold you the car didn’t know about the damage, someone in the chain of ownership of the car did know, and can probably be held liable for not disclosing it.

Odometer and Title Fraud

Every car has a official history. Every owner’s name and address is recorded on a title document for the car. Each time a car is transferred from one person to another, the car’s mileage at the time of the transfer is recorded on the title. Title documents are prepared by the state on secure paper that is difficult to forge. Except in certain very limited circumstances, when you buy a car, you are supposed to be given a copy of the original title to sign, indicating that you are buying the vehicle and that you have seen the mileage disclosure on the title. The title you are given will also tell you who the immediate past owner of the car was, and if the car has passed through other dealers since the immediate past owner, the name of each dealer who took title to the car before it was sold to you.

If a car has high mileage, an unscrupulous dealer may try to hide its mileage history by tampering with the odometer and giving you a phony mileage disclosure on a piece of paper separate from the title, so you can’t see what the mileage was when the dealer bought the car. Or, if the dealer bought the car from a rental car company, he might hide the title so you can’t see who the previous owner was.

Rolling back odometers and failing to provide you with the original title documents when you buy a car is a violation of the federal odometer act (Motor Vehicle Information and Cost Savings Act). If this has happened to you, you may be able to hold the dealer liable for three times the amount of your loss, or a minimum of $1,500, plus reimbursement of your attorney’s fees.

Dealer Forgery

Sometimes dealers who aren’t happy with a car deal just re-write it themselves. They make up a new contract and forge your signature to it, changing the terms for their benefit. For example, if you purchased credit life insurance, the dealer might rewrite the contract so that it doesn’t include the insurance, but the price of the car (and the dealer’s profit) is increased while the monthly payment doesn’t change. This conduct is fraudulent and a violation of the Texas Deceptive Trade Practices Act. You can hold the dealer liable for any damages you suffer as a result of the forgery, plus reimbursement of your attorney’s fees.