Secretary of State Alexi Giannoulias is warning Illinoisans shopping for a used vehicle to exercise caution and employ best-practices amid a rise in fraudulent vehicle purchases across the state.
The Secretary of State’s office has uncovered a growing number of fraudulent sales from out-of-state businesses licensed as wholesale dealers that illegally falsify the mileage shown on a used vehicle’s title and odometer to defraud car buyers.
Giannoulias’ warning comes on the heels of an Illinois car buyer, who thought they purchased a used vehicle from a wholesale dealer with 80,000 miles, only to find out the seller rolled back the odometer from over 200,000 miles and deliberately failed to disclose major mechanical problems with the car.
“Nightmare stories like this one is one of the worst-case scenarios when purchasing a used car,” Giannoulias said. “In many cases, the purchaser is in a desperate financial situation or needs a car fast, which leads them to overlook red flags and fail to do their due diligence.”
The wholesale car dealer scam is a deceptive practice in which someone licensed in other states to sell vehicles exclusively to dealers, instead poses as a private vehicle owner. Vehicles are often sold in Illinois through online advertisements and social media channels at seemingly low prices. In many cases, these vehicles have serious mechanical issues or are missing the ownership documents required to title and register the vehicle. By the time the buyer discovers the problem, the wholesaler is long gone.
Odometer fraud across the country is rising each year. The National Highway Traffic Safety Administration estimates that more than 450,000 vehicles are sold annually with false odometer readings causing consumers to lose over $1 billion annually. In December, Carfax ranked Illinois the fifth highest state in the nation with 79,000 cars discovered with rolled-back odometers.
With older vehicles, odometers scammers roll back odometers manually; however, newer vehicles have digital odometers that can be altered by removing or manipulating a car's circuit board, deceiving buyers into believing a car has a lower mileage that would sell for a higher price.
“My office is continuing to work with law enforcement and to educate the public to identify these scammers before they take advantage of customers,” Giannoulias added. “It’s imperative that buyers do their homework and know the signs before it is too late.”
To best protect yourself against fraudsters, Giannoulias recommends the following when buying from an individual seller:
When buying from an individual, always get the properly signed title at the time of purchase.
Make sure the seller owns the vehicle.
If there is a lien on the vehicle, make sure it is paid off before taking ownership.
Look for evidence of erasing or other tampering with the title documents.
Make sure the wear and tear on the vehicle appears to match its age and mileage.
Closely examine the vehicle history report on Carfax, AutoCheck or the National Motor Vehicle Title Information System (NMVTIS) and compare the report to the name on the title, title number, VIN number, issue date and odometer reading. Compare the VIN on the vehicle’s dashboard against the title and history report.
Have the vehicle inspected by an automotive professional.
Never buy a previously junked vehicle, meaning the vehicle is inoperable, wrecked or dismantled. You cannot register the vehicle in Illinois and it cannot be rebuilt, no matter what it looks like.
If you believe you are buying from an individual seller, but the last assigned owner looks like a dealer name, do not buy it. You may have trouble registering the vehicle and you may pay additional taxes.
For more information, visit ilsos.gov and scroll down to Publications & Forms where, under the Law Enforcement section, you can find informational forms on odometer fraud and buying or selling a vehicle. If you believe you are a victim of odometer fraud or other vehicle-related fraud, contact your local police department.