Dealer Fraud

In some cases there may automobile dealer that engage in unscrupulous practices which may result in a dealership committing fraud. It is not the position of WCCSC that ALL automobile dealers commit fraud however if you are a victim of dealer fraud WCCSC may be able to assist you with identifying the issues. WCCSC’s support automobile dealership that conduct business fair and honestly.

Auto Dealer Fraud Law refers to the many fraudulent, deceptive and unlawful practices used by automobile dealers during advertising, pricing negotiation, and sales and financing of a vehicle. These fraudulent practices can occur during almost any stage of the vehicle purchasing process.

The scams included in auto dealer fraud are many and varied; they include, but are not limited to the following:

Bait and Switch, a form of false or deceptive advertising, where the dealer advertises a vehicle at an enticing price, but when the potential customer comes into the dealership, says the advertised vehicle or deal is no longer available and then pressures the customer to purchase a more expensive vehicle, or the same vehicle at a higher price;

Add-On Concealment, where various optional add-ons are included in the final sales price without disclosure;

Vehicle Trade-In Undervaluation, where the dealer purposefully undervalues or underpays for a customer’s trade-in vehicle;

Negative Equity/Vehicle Trade-In Overestimation, where the customer’s trade-in vehicle is worth less than the amount owed, but the dealer misrepresents the value, deceptively elevating it to the owed amount and often adds the difference to the new vehicle’s price;

New Dealer Returns, where the dealer misrepresents and sells a vehicle as “new”, when it was actually returned to the dealership because of a defect or persistent mechanical problem;

Failure to Disclose a Salvaged or Flood-Damaged Vehicles (related to vehicle title fraud), where a used vehicle is sold to the customer without disclosing that the vehicle has incurred significant damage, been designated as a salvaged vehicle pursuant to a car accident, or has been flood-damaged;

Odometer or Mileage Rollback (related to vehicle title fraud), where a used vehicle has had its odometer altered to conceal the vehicle’s true mileage;

Packing, where the dealer quotes the customer an inflated monthly payment, and after the customer accepts the agreement, adds optional accessories to attain the quoted monthly amount;

Certified Used Vehicles, where certain manufacturers and dealerships implement certified used vehicle programs that are supposed to guarantee that the used vehicle is in good working order and free from major structural damage, but then label unqualified vehicles as “certified”; and

Rewritten Contracts/Backdating, where the customer does not qualify for the financing terms of the originally agreed upon contract, so the dealer has the customer return to sign a new contract with different terms, but backdates the new contract with the date of the original contract.

In many states, victims of auto dealer fraud are required to contact the auto dealer first to afford the dealer the opportunity to resolve the problem, before the victim can pursue legal action against the dealer. If the dealer fails to resolve your issue, you may then consult an attorney knowledgeable in auto dealer fraud to determine if you should proceed with a civil lawsuit.