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The various types of auto dealer fraud

New and used car dealers in Maryland and around the country are heavily regulated, but misrepresentation and fraud remain worryingly common. This is because the automobile business is fiercely competitive, which leads some dealers to engage in behavior that violates consumer protection laws. One of the most common auto dealer deceptive practices is known as the “bait and switch.” This involves advertising a vehicle at an unusually low price and telling consumers who show interest that it has been sold or is otherwise unavailable. The dealer then aggressively tries to sell a more expensive vehicle.

Forgery and fraud

One of the most serious kinds of auto dealer fraud is sending a bank a second set of finance documents with forged signatures, a higher selling price and a lower interest rate. The interest rate is lowered so the consumer’s monthly payment does not change. When the consumer tries to sell the vehicle or trade it in, the amount they have to send to the bank to pay off their loan is far higher than they expected.

Salvage vehicles and odometer rollbacks

Some used car dealers increase their profits by tampering with odometers or selling vehicles that have been declared a total loss. They usually purchase these vehicles at auctions held in states with less rigorous regulations and then “wash” their titles before offering them for sale. This is an extremely serious safety concern as vehicles that have been in major accidents are often dangerous to drive.

Holding dishonest auto dealers responsible

Attorneys with experience in auto dealer fraud cases could file lawsuits against unscrupulous businesses on behalf of vehicle owners who have been defrauded or deceived. Attorneys could argue that dealers should take back vehicles that are not safe to drive and compensate consumers for their losses.