New Odometer Rules
Odometer fraud is a major problem
Recently, my daughter asked for advice on buying a used vehicle. I cautioned her to learn more about odometer fraud issues.
The National Highway Traffic Safety Administration (NHTSA) Odometer Fraud site states that odometer fraud is the disconnection, resetting, or alteration of a vehicle’s odometer with the intent to change the number of miles indicated.
NHTSA estimates, based on a 2002 study, that more than 450,000 vehicles are sold each year with false odometer readings.
Thankfully, that 17-year old study got updated on October 2, 2019 in the Federal Register.
AGENCY:
National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT).
ACTION:
Final rule.
SUMMARY:
This final rule is issued to fulfill a requirement in the Moving Ahead for Progress in the 21st Century Act of 2012 (MAP-21) that NHTSA establish regulations permitting states to adopt schemes that allow electronic odometer disclosure statements in conjunction with electronic titling systems associated with the transfer of interests in motor vehicles. Amendments in this final rule allow odometer disclosures in an electronic medium while maintaining and protecting the existing system(s) ensuring accurate odometer disclosures and aid law enforcement in prosecuting odometer fraud. To accomplish this goal, the final rule amends prior regulations governing transactions made on paper titles and similar documents allowing odometer disclosures to be made in a purely electronic environment or through using paper documents that are scanned and converted into electronic form and stored in a state data system. This final rule also adds new sections containing specific additional requirements only applying to electronic disclosures to ensure the secure creation and maintenance of electronic records. NHTSA is also amending the mileage disclosure exemption to vehicles that are 20 years old or older.
DATES:
Effective date: This rule is effective December 31, 2019.
Laws and Regulations
Under the new rule effective January 2020, odometer verification will be required for vehicles up to 20 years old beginning with model year 2010 vehicles.
This rule was put into place in response to the increased longevity of vehicles sold in the United States.
The average age of a car or light truck on the road is now up to 11.5 years. Prior guidance only required odometer verification on cars up to 10 years old. Odometer Fraud laws
According to the National Highway Traffic Safety Administration (NHTSA) committing odometer fraud is a crime. The Federal Government passed a law that requires a written disclosure of the mileage registered on an odometer be provided on the title by the seller to the purchaser when the ownership of a vehicle is transferred. If the odometer mileage is incorrect, the law requires a statement to that effect to be furnished on the title to the buyer.
However, vehicles 10 years old and older were exempt from the written disclosure requirements.
We live in the age of traceless odometers
The National Odometer and Title Fraud Enforcement Association (NOTFEA), website notes that “since 1980, NOTFEA has been providing valuable training and resources to our members in an effort to detect, deter and prosecute odometer, rebuilt/salvage, and other title fraud related crimes. NOTFEA is proud to have active members in every state and in Canada.
NOTFEA is a non- profit organization whose main purpose is to protect consumers from costly odometer, title and auto fraud related crimes. NOTFEA meets on an annual basis to discuss trends, share ideas, receive training, and discuss odometer and title fraud issues on the state and federal level. NOTFEA members promote friendship and cooperation between all those interested in combating odometer and title fraud, and work together to coordinate and exchange techniques and training to detect and prosecute odometer and title fraud. With comprehensive training, NOTFEA aids and assists those enforcement agencies who may not be familiar with laws against odometer and title fraud.Digital odometers that have been tampered with are even harder to detect than traditional mechanical odometers (since they have no visible moving parts).”
In rulemaking comments, “NOTFEA urged NHTSA to adopt the proposal. NOTFEA observed the average vehicle age is now 11.5 years and that operation of vehicles older than 12 years old is expected to increase 15% by 2020. Further, NOTFEA cited a survey indicating drivers were keeping and driving their vehicles more than 100,000 miles and planned on continuing to drive them until 200,000 and/or they stopped running. Participants planned on keeping their vehicles more than 12 years.
According to NOTFEA, a recent odometer fraud investigation revealed a dealer rolled back the odometers on 547 vehicles, and only 134 were not exempt. NOTFEA stated the exempt status of vehicles gave the dealer an opportunity to reduce the mileage and that this dealer removed approximately 26 million miles from the odometers of all the exempt vehicles he sold.
According to NOTFEA, this accounted for an approximate fraud loss of $1.2 million and approximately 26 million miles rolled back on 300 vehicles. NOTFEA also offered examples of similar cases involving exempt vehicles. To address the mechanics of implementing the change to the exemption threshold, NOTFEA suggested when the change becomes effective, NHTSA should make it apply only to vehicles less than 10 years old on the effective date.”
Anti-Data Tampering Technology is available
IEEE, the world’s leading professional association for the advancement of technology created IEEE 1616a, a new standard based on IEEE 1616, the first universal standard for motor vehicle event data recorders (MVEDRs), similar to units found on aircraft and trains. An adjunct to IEEE 1616, the new standard helps to provide greater consumer protections by improving the effectiveness of these automotive “black boxes” with new lockout functionality designed to prevent data tampering, such as Vehicle Identification Number (VIN) altering and odometer fraud.
It also addresses concerns over privacy rights by establishing standards protecting data from misuse.The newest member in the IEEE 1616 collection, IEEE 1616a aims to preserve the data quality and integrity needed to meet federal collection standards, while protecting consumers’ privacy. Built on more than a decade of MVEDR research and development by organizations including federal agencies, industry trade associations, and global automotive, truck, and bus manufacturers, newly added safeguards in IEEE 1616a address the following areas:
- Data tampering — modification, removal, erasure, or otherwise rendering inoperative of any device or element, including MVEDRs;
- VIN theft — duplication and transfer of unique VIN numbers, a process known as “VIN cloning”, enabling stolen cars to be passed off as non-stolen;
- Odometer fraud — rolling back of vehicle odometers, resulting in the appearance of lower mileage values; and
- Privacy — prevention of the misuse of collected data for vehicle owners.
Additional Resources from the rulemaking
Average Age of Automobiles and Trucks, Fed. Highway Admin., (last visited Sept. 13, 2019).
America’s Cars and Trucks Are Getting Older, Business Insider (Aug. 22, 2018), (last visited Sept. 13, 2019).
Table 21 of Summary of Travel Trends, 2017 National Household Travel Survey, Fed. Highway Admin., July 2018, (last visited Sept. 13, 2019).
Carfax: Odometer Fraud Hits Nearly 200,000 Cars Annually, (last visited Sept. 13, 2019).
Used Vehicle Market Report, Edmunds, Feb. 2017, (last visited Sept. 13, 2019).
Used Vehicle Outlook 2019, Edmunds, (last visited Sept. 13, 2019).
NIADA 2018 Used Car Industry Report, National Independent Auto Dealers Association, (last visited Sept. 13, 2019).
Used Vehicle Market Report, Edmunds, Feb. 2017, available at https://dealers.edmunds.com/static/assets/articles/2017_Feb_Used_Market_Report.pdf (last visited Sept. 13, 2019).
Charles Chesbrough, The Used Vehicle Market: Bumps On The Road Ahead, (lasted visited Sept. 13, 2019).
Auction Industry Survey For the Year Ended Dec. 31, 2018, (last visited Sept. 13, 2019).
