Auto Fraud: What It Is and How to Protect Yourself

Auto fraud refers to any illegal activity that involves deception or misrepresentation in the auto industry. This can take many forms, and it can include both buyers and sellers of vehicles. It’s important to be aware of the signs of potential fraud, and to take steps to prevent yourself from becoming a victim of auto fraud.

Auto fraud takes many forms, but some of the most common types of auto fraud include:

  • odometer fraud
  • title fraud
  • insurance fraud
  • lemon law violations

Let’s take a closer look at each of these types of auto fraud so you know exactly what to look out for the next time you go to buy a car.

Odometer Fraud

Odometer fraud is committed when the seller alters the odometer reading of a vehicle to make it look as if it has traveled significantly fewer miles than it has. They do this so they can sell the vehicle for a higher price, but those who fall victim to this type of auto fraud will have to pay more to repair and maintain the vehicle, and will probably need to replace it sooner than they expected.

Title Fraud

Title fraud is when someone forges or alters a vehicle’s title or registration papers. Most of the time people do this to hide the vehicle's history, especially if it was previously involved in a serious accident. Victims of title fraud are led to believe they’re buying a vehicle that is either newer and/or in better condition than it really is. As with odometer fraud, they usually end up paying more to repair and maintain the vehicle, and they find out the hard way that it needs to be replaced sooner than they had expected.

Insurance Fraud

Rather than trying to sell a vehicle, especially one that’s not in great shape, some people will deliberately cause or stage an accident in order to get a payout from the insurance company. Alternatively, they might falsely report the vehicle as stolen, or make a false claim of damage to the vehicle. In cases of insurance fraud, it’s usually the insurance company that is the victim, which is why insurance companies have put systems and processes in place to avoid becoming victims of auto fraud.

Lemon Law Violations

Lemon laws are laws designed to protect those who buy cars and other products that consistently fail to meet a set of quality standards. In the case of vehicles, manufacturers maintain a set of standards their vehicles must meet in order to be considered safe to be on the road. Any vehicle that consistently fails to meet these standards, despite multiple repairs, is considered a lemon law violation, and the buyer deserves to be compensated for the cost of their substandard vehicle.

How to Protect Yourself from Auto Fraud

There are legal remedies available to those who fall victim to auto fraud, but no one wants to be a victim, so let’s talk about some ways you can avoid that fate. The first step is to do your research and familiarize yourself with the red flags of auto fraud. For example, any time you’re buying a used vehicle, get a vehicle history report and have it inspected by the mechanic. Review the title and registration papers thoroughly to make sure nothing looks out of place.

Be wary of any companies or individuals who are not transparent about how they operate their business, or are unwilling to provide detailed information about a vehicle they’re trying to sell to you. You should be equally wary of anyone who insists you pay them a large amount of money upfront, or who is offering you a deal that seems to good to be true.

If it’s too late and you’ve already fallen victim to auto dealer fraud, you want attorneys who are as honest as the day is long and almost available on that basis. We fight for your rights and work diligently on your behalf to get you justice and any just compensation you may be due. We’re there for you in, around and even beyond Chicago. From Oakbrook to Northbrook and any city you can name, we claim jurisdiction over claims of fraud and a huge range of business law disputes that may involve litigation. Call us to discuss your legal needs during a FREE consultation. Call 630-333-0333 or via our website by clicking here. We look forward to speaking with you.

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