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Scam artists can tamper with
mileage counters, then sell used
vehicles at inflated prices

Used-car buyer, beware
Mileage counter F.A.Q.

By Jaymes K. Song
Star-Bulletin

A 51-year-old Kaimuki resident bought the seemingly perfect car two months ago for $3,600. The 1991 gray Toyota Corolla with only 63,000 miles was just what he needed to go fishing and to the beach.

He quickly found out the deal was too good to be true. The car actually had 131,889 miles -- almost double the 63,000 written on the title, shown on the odometer and advertised in the newspaper.

"It's a fraud and a scam," he said, asking that his identity not be revealed for fear of retaliation.

But he hasn't been the only victim. Several people are being conned every month in the same used-car scheme, investigators say.

Once he realized he had been taken, the Kaimuki man immediately called the seller, but by then the phone had been disconnected.

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LOOK CLOSELY

Ask to see the title before completing the transaction:

1 Note the date; be leery if it is too recent, hinting that the seller hasn't had the car long.

2 Pay special attention to the typed mileage, which is the last documented odometer reading.

3 The hand-written mileage must be higher than the typed mileage. The written mileage is documented by the person registering the vehicle.

4 If box No.2 is checked on the title, which means the reported mileage is not accurate, ask why the odometer reading is not accurate.

Wendell Murakami, a weights and measures inspector for the state, estimates several Oahu residents have been victimized in recent months by scam artists who tamper with odometers, then sell the vehicles at inflated prices.

The scam artists often purchase heavily driven Hondas or Toyotas, clean them up, roll back the miles, doctor the titles and safety inspections, then sell the vehicles to unsuspecting and careless buyers.

Normally, the state handles about seven odometer-tampering complaints per year. This year, it has fielded an average of three per month, Murakami said.

He suspects many more cases simply are not reported.

Odometer fraud, which is handled by the state Department of Agriculture's Quality Assurance Division, is only a misdemeanor offense. But many unwary or naive consumers are paying thousands of dollars for vehicles that are not worth much more than a moped.

Used-car buyer, beware Star-Bulletin staff Some things to do before purchasing a used car: Have the car examined by an auto mechanic or body shop you trust: Auto shops usually charge less than $75 for this service, and it could save you thousands. Don't be fooled by the exterior. Just because the car is clean and shiny doesn't mean the engine is good. Never pay cash: Victims in reported odometer tampering cases said the scam artists always insisted on cash payments. Find out how long the seller has owned the car: Ask to see maintenance records, old safety checks, etc., documenting the car's mileage history. If the vehicle has been in the seller's name only for a few weeks, be careful. Ask to the see the registration: If "SLVG" is noted next to the type of vehicle, it means it has been rebuilt or salvaged from a major accident. Meet at the seller's home and verify the address by checking his/her driver's license or ID card. Victims reported being told to always meet in a public area, such as a parking lot of a restaurant or supermarket. Be leery of sellers who only give a pager number: The majority of fraudulent sellers use pagers, disconnecting them after making a sale. Some simply don't return pages of victims. Sources: Honolulu Police Department, state Department of Agriculture's Quality Assurance Division, city Division of Motor Vehicles and Licensing

The scam is costing used-car buyers billions of dollars every year, said Tim Hurd of the National Highway Transportation Safety Administration (NHTSA).

"The money is coming directly from the consumers' pockets," he said.

In the past, used-car buyers would go to their "corner lot" and purchase a car. The vehicle was usually traded in by someone in the neighborhood.

Now, people can buy from anyone and not know where the car came from, Hurd said.

After the Kaimuki resident discovered the car had several problems and would cost thousands to repair, he decided to donate it to a charity.

Murakami warned potential used-car buyers to be extra cautious when buying from individuals they do not know. His office has identified two groups of organized "families" responsible for more than 90 percent of the odometer tampering on the islands.

The groups frequently travel to and from California. Both groups are elusive and are known to change identities and addresses often, Murakami said. They also sometimes change ownership of the cars prior to selling them to create a "smoke screen" of paperwork.

One group has found an apparent loophole in the system, purchasing a car with high mileage, rolling back the miles, then registering the car with the lower mileage. In the registration process, they check off a small box on the vehicle's title, which reads, "The odometer reading is not the actual mileage."

That's what happened to the Kaimuki victim, who was not aware of the checked box until looking closer.

"You can't read the title. It's barely legible with creases all over it," he said.

Murakami said the buyer is usually unaware of the checked box because the fraudulent seller does not hand over the title until the transaction is complete.

Since the seller checked the box, it supposedly frees them from liability.

The second group rolls back the mileage, then actually registers a car with a higher mileage to be altered later. For example, a car may have only 150,000 miles, but the scammers will register the car with 450,000 miles on the title. They will then place a decimal point strategically so it would read 45000.0 miles. The best a buyer can do is have the vehicle examined by a professional and carefully inspect the title.

Murakami said stricter laws and more public education are needed. But with only seven state inspectors assigned to odometer fraud, as well as investigating everything from scales to gas, resources are limited, he said.

One disadvantage consumers in Hawaii have is that they cannot check the mileage history of a vehicle through the state or city.

NHTSA officials said other states allow consumers to conduct background mileage checks on cars. In Hawaii, consumers can only check the title of a car for the last reported mileage.

The mileage history is not given out because of privacy reasons, said David Mau, the city's assistant administrator for Motor Vehicle and Licensing. Also, city computers are not configured to record the mileage history, he said.

Local police, meanwhile, are reluctant to get involved. A prosecution for odometer fraud is rare.

The offense is difficult to prosecute because it has to be proven that the seller tampered with the odometer and knowingly misrepresented the car during the sale, said Honolulu police Lt. Alan Anami.

"It comes down to 'buyer beware,'" Anami said. "It's the chance you take with a private party. If you go back to a commercial dealer, they might take it back if they misrepresented a car."

Meanwhile, the Kaimuki victim is hoping the suspect who took his money, who actually is being investigated by the state, will be prosecuted soon.

"They're killing aloha here," he said.

Mileage counters often rolled back Star-Bulletin staff Frequently asked questions about odometer fraud: Question: What is odometer fraud? Answer: Odometer fraud is when an odometer is rolled back or disconnected. Fraud also occurs when incorrect information is given about the accuracy of the odometer reading. Q: How costly is odometer fraud to you? A: Since the value of your car goes down as the miles driven goes up, you could pay thousands of dollars more than the actual value of the car. Q: What happens when an odometer breaks? A: When an odometer breaks and is repaired or replaced, the mileage must be set back at zero. A sticker indicating the true mileage before service and the date of service must be attached to the vehicle's left door frame. When the vehicle is sold, a disclosure statement must indicate the odometer error. Q: How can you tell whether an odometer has been altered? A: Look for evidence of tampering (marks on the odometer, misaligned numbers), and check the mileage entered on oil stickers, safety inspections and tire warranty cards. Q: What can you do if you are victimized? A: You can sue for civil damages, but you must be able to prove the odometer mileage was misrepresented, who was responsible, and that there was intent to defraud. Also, report the fraud to state authorities or call the national Auto Safety Hotline at 1-800-424-9393. Source: National Highway Traffic Safety Administration