Auto Fraud and the Texas Lemon Law
The Consumer Federation of America (CFA), the National Association of Consumer Agency Administrators
(NACAA), and the North American Consumer Protection Investigators (NACPI) collectively looked at
more than a half million complaints in 18 different states, in a 2010 complaint survey conducted by them.
Auto-related complaints were quoted as the top issue by consumers and consumer protection agencies for
the second year in a row, in this 2010 complaint survey conducted by these three government agencies.
These auto-related complaints include misrepresentations in advertising or sales of new and used cars,
lemon buy backs and used cars with faulty repairs. These auto-related complaints also include
misrepresentations regarding the leasing and towing disputes of the used cars.
Texas State and federal consumer protection laws have been enacted to ensure the buyer is protected.
Consult a Texas lemon law attorney to get the best recourse if you are an auto related fraud victim.
Some of the most common types of fraud employed in a used car deal are as the following:
Odometer rollback or odometer fraud: Odometer rollback or odometer fraud involves modifying the true
mileage of a Texas used vehicle by rolling odometer to a lower figure, to make the vehicle more -
merchantable-.
Accident, flood or fire damaged cars salvaged: This fraud involves selling a -salvaged- car or truck without
disclosing its status to a buyer. These salvaged car or truck is damaged by a wreck, flood or fire and a 'write
off' by the company as a total loss.
Damaged new vehicle: A new vehicle may have suffered body damage at the factory, while being conveyed
to the dealer, or while at the dealership.
If the damage exceeds certain percentage of the maximum retail price of the vehicle it is fraudulent not to
have this fact disclosed to the Texas car consumer when:
Texas has a specific disclosure requirements in its consumer protection statutes
Texas does not have specific disclosure requirements
Selling a Texas lemon law buyback: When a manufacturer's Texas lemon buy back is sold to an
unsuspecting Texas car consumer without revealing its lemon buy back history, is a seriously fraudulent
practice. The Texas used car dealer may deny the knowledge of its lemon past despite its being always
available on its -warranty history report-.
Misrepresenting a Texas rental car status: A used Texas rental car status is not disclosed but is
misrepresented as an -executive driven- car. This is a fraudulent practice according to the Texas State laws.
Title Washing: Title washing of illegal cars involves eliminating a vehicle's negative history by a fraudulent
car dealer, so that the vehicle is passed to a Texas car consumer. Majority of the title washed vehicles come
from across the border have some problem or the other and it makes the importation of the vehicle entirely
illegal.
Some of the Texas Title Washed vehicles are as the following:
Texas lemon buys
Vehicles salvaged by an company
Texas used cars with their odometer rolled back
Gray market vehicles
Canadian vehicles imported to the United States, that are often stolen, salvaged, flood damaged or have
Canada liens
Financing scams: The most common financing scam is the practice of making a -spot delivery-. This
financing scam involves the dealer allowing a car consumer to take a vehicle home with one agreed finance
rate. This finance rate takes a ride to a higher notch on the pretext that the promised rate is not available.
Worse, the dealership may claim that he had already sold the consumer's trade-in before getting the right
finance approved. In the absence of his own old car the buyer is forced to agree to the new deal and the
higher rate of interest.
Negative equity scam: A Negative equity scam involves when the trade-in is valued much lower than the
new car on sale. The difference is added to the new car cost which would further increase the other charges
like registration, taxes etc on the car with or without the knowledge of the consumer. According to the Texas
lemon law negative equity on a trade-in is fraudulent.
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