Odometer Rollback: How to Spot Odometer Fraud and How to Protect Against It?
Last update on:
November 3, 2023 6:00 AM
According to Emilie Voss — Director of Public Relations for Carfax, many car buyers think odometer rollback vanished with the invention of digital odometers. Far from the truth: the vice still lingers insidiously. It grows year-over-year, making it difficult for buyers to find genuinely good ‘second-hand’ motor vehicles.
According to a Carfax report, odometer fraud cases rose 7% in 2022. Car buyers lose $4,000 per rolled-back vehicle, and to make matters worse, the majority don’t even know they have been scammed. If you’re in the market for a used car, our guide will show you how to shove the unscrupulous dealers aside.
If you’re worried that your employees are rolling the company’s vehicle odometer back or forward for their benefit, this guide is for you. Some employees could be doing Uber or Doordash during company time and rolling back the odometer to erase the evidence.
We’ll shed light on everything you need to know about odometer rollback. You’ll learn how to spot odometer fraud, protect against it, and who to contact when you fall prey to the odometer scammers. We’ll also show you how the best mileage trackers put an end to the dirty game.
Leave the Outdated Odometer Behind
Embrace Accurate, Real-time Monitoring of Employee Mileage and Locations.
Vehicle’s Odometer Reading: An Important Factor in Determining Its Worth
Before we get to the gist of this article, let’s get the basics out of our way. Why is the vehicle’s odometer so important?
The answer is simple: odometer reading shows the mileage a vehicle has clocked since it left the manufacturer’s doors. It’s a good indicator of tear and wear in a car. The higher the mileage, the greater the tear on a vehicle’s components. Consequently, a high-mileage vehicle is worth much less than an identical low-mileage model.
That said, the vehicle mileage isn’t the sole determinant of its value. Of course, how the miles racked up can make the difference, too. For example, highway trips and driving in stop-and-go city traffic impact the car differently. The latter is considered to cause more damage.
Moreover, other important factors impact a vehicle’s worth. The car’s previous damage records and how it was maintained are vital when calculating its value.
What Is a Car Odometer, and How Does it Work?
An odometer is a device that clocks the distance a vehicle travels. Keep in mind that the odometer logs every mile the car travels on forward and reverse gear. The odometer can be mechanical or digital.
Traditional, Mechanical, or Analog Odometers
Mechanical odometers or traditional odometers were all the rage until the early 2000s. These days, you won’t find a new vehicle model with this type of odometer.
As the name suggests, the traditional odometers are mechanical, comprising a set of gears and a series of cables. The cables connect the vehicle transmission and the odometer. When the vehicle moves, it spins the cables, turning a set of gears connected to a numbered dial to log the mileage.
Digital odometers dominate the market today. This type of odometer replaces the series of gears and cables with magnetic or optical sensors tuned to record the number of times the car transmission output shaft turns.
The sensor relays the information to the vehicle’s onboard computer or the engine control unit (ECU). This unit uses an algorithm to calculate the distance traveled by the vehicle based on the size of the tires and their rotations.
What Does Odometer Rollback Mean?
An odometer rollback is used to describe tampering with an odometer reading to make it seem that a vehicle has lower mileage than it does. It’s sometimes referred to as “busting miles” in the U.S. or “clocking” in Canada, the U.K., and Ireland.
Why Do Dealers and Sellers Roll Back Odometer?
People roll back a vehicle odometer to artificially increase its value. For example, a 2013 Toyota Camry with 100,000 miles might be valued at $12,000. The same vehicle/model with 200,000 miles on it might fetch a significantly lower value of $7,800.
If a dealer rolls a 200,000-mile Camry to 100,000 miles, they will get an extra $4,200. Easy money into the dealer’s pocket, but the unwary buyers feel the pinch.
The unsuspecting buyer spends top dollar on the vehicle under the impression that it’s in prime condition and expects years of trouble-free service. Unbeknown to them, the car has more tear and wear than anticipated, and the signs of cosmetic and functional damage take little time to rear the ugly head.
Within months of purchase, irritating breakdowns become more prevalent, prompting buyers to incur maintenance costs such as tire and oil changes sooner than hoped. It also quickly dawns on the buyer that the vehicle’s resale is a fraction of what they first thought.
How Odometer Rollback Happens
Rolling back an odometer can be as simple as plugging an Original Equipment Manufacturer (OEM) or On-Board Diagnostic (OBD) tool and resetting the car mileage. Manufacturers of these tools create them to enable mechanics to diagnose car issues. However, unscrupulous dealers and sellers use them to alter the odometer illegally.
You don’t need to be a mechanic to recalibrate the vehicle odometer. With a few bucks and basic car computer knowledge (which can be acquired by watching YouTube videos), you can easily roll the vehicle odometer back or forward.
Rise of the Odometer Rollback Frauds: Why Do Dealers Do It?
The simplicity of odometer tampering has instigated its proliferation. Plus, the “reward” — milking more money for a reasonably cheap vehicle — gives these dealers an insatiable desire to continue pursuing the act.
According to the National Highway Traffic Safety Administration (NHTSA), over 450,000 vehicles fitted with illegally altered odometer readings are sold each year. The crime costs used car buyers in the U.S. a staggering $1 billion each year.
Moreover, a recent study by Carfax revealed that more than 1.9 million cars on U.S. roads feature a rolled-back odometer. That staggering statistic alone doesn’t tell the whole story. The table below shows the leading states in odometer fraud:
How to Detect Odometer Fraud: Signs of Odometer Rollback
Bear in mind that detecting whether the odometer mileage is false can be difficult.
Unfortunately, digital odometers have no visible moving parts, making it harder to detect whether they have been tampered with than mechanical ones.
If you’re thinking about buying a used vehicle, the first step to take is to check whether it has ever been reported for odometer scam. Of course, even if it wasn’t reported before, it doesn’t guarantee an unaltered or accurate mileage reading.
As a result, the due diligence shouldn’t end there. If you suspect odometer rollback fraud, or you just want to ensure everything is fine, these are the steps you can take:
Compare Mileage Records with Odometer Reading
Check the title and compare the mileage records with the mileage shown on the vehicle’s odometer. The car’s maintenance records and inspection records are a great source of data. The vehicle’s odometer readings should be included in these reports. Hence, it’s easy to check for signs of odometer rollback fraud.
Go Through a Vehicle History Report (VHR)
A vehicle history report (also known as a VIN check) is a detailed report that provides information about a used car’s condition. Getting the history report is beneficial in more than one way. You’ll be informed of the vehicle’s damage history, lien status, and more. It also contains the registration history that comes with odometer readings.
This means you can compare the numbers from the report with the current odometer readings. This type of data also gives you a chance to check if the pattern of mileage driven over the years is logical.
Any inconsistencies in the number can be considered a red flag. If the seller doesn’t have this report, you’ll need the vehicle identification number (VIN) to obtain it online.
Check For Physical Tampering
Inspect the odometer for signs of physical tampering. There are a few essential things to be mindful of when checking the odometer for signs of rollback. For starters, the numbers should be readable, there should be no gaps between them, and they shouldn’t seem crooked.
For example, misaligned numbers are a reason for concern. If you see something like that, it’s likely the readings have been altered. Also, inspect all the dashboard screws and clusters. Check whether they are original and whether they match the ones shown in the manual.
Compare Appearance With Mileage Clocked
Compare the vehicle’s appearance with the reading on the odometer. It is not always easy to conclude whether the odometer reading matches the wear and tear on the vehicle. It can be repaired to some extent to deceive the buyer.
However, some signs of wear and tear can be more prevalent. The gas, brake, and clutch pedals can give off the vehicle’s actual condition. Examine the tires, too - if the odometer displays 20,000 or less, the vehicle should have the original tires.
Consult Your Trusted Mechanic For Detailed Inspection
For digital odometers, you can consult a car servicing shop. A vehicle’s ECU records the pulses captured by the magnetic or optical sensor and, therefore, stores the correct reading. Car servicing shops normally have the proper tools to determine the vehicle’s true mileage if you suspect fraudulent acts.
Is Odometer Rollback Legal?
No, odometer rollback isn’t legal. Odometer tampering to misrepresent a vehicle’s condition is considered a crime in the U.S. It’s been illegal since 1972. Since the government introduced the Truth in Mileage Act (TIMA) in 1986, sellers must disclose the vehicle mileage on the advertisement title.
Moreover, federal and state laws frown upon odometer fraud. The laws prohibit the seller from knowingly making a false odometer readings claim, whether they tampered with the odometer themselves or are aware that another person did it.
The risk involved and the cost that unwary American buyers incur prompted the federal government to declare odometer tampering a federal crime under Title 49 U.S. Code 32703. The law states categorically that no person should alter or disconnect the odometer to alter its readings.
Since odometer tampering isn’t taken lightly, the penalties for a conviction on federal odometer fraud charges can be costly and severe. If we are talking about civil penalties, fines can go up to $10,000 for each violation, up to a maximum penalty of $1,000,000.
If the crime involves a corporation, the perpetrators can be fined individually; the company won’t be exonerated, either. Not just that. The officers involved and the corporation could be subject to additional lawsuits by the state government and the Attorney General.
A person who knowingly and willfully engages in odometer scam can face fines of up to $250,000 and up to three years in prison. Keep in mind that the criminal penalties are separate from the civil penalties.
When addressing the penalty for odometer tampering, it’s important to note that these charges are often accompanied by other offenses like false representations about a vehicle’s mileage.
Unsurprisingly, persons who alter odometer readings frequently tend to modify or forge documents that contain mileage records for the vehicle. This is treated as a separate offense in the eyes of the law.
How to Report Odometer Fraud
If you’re a victim of odometer fraud, you should report the case. Reporting odometer fraud helps nip the act in the bud. When registered, the issue becomes a permanent part of the vehicle’s records, and it helps other buyers avoid getting scammed.
Not only will you help other people, but the person or the dealership that committed the fraud will be held accountable for their illegal actions. They can be punished by law for their criminal behavior.
Agencies that deal with odometer rollback claims differ from state to state. So, who do you report odometer fraud to?
One way is to reach out to your local law enforcement agency, as they can inform you of your next steps.
You can report suspected odometer fraud to your state’s consumer protection agency, too.
Otherwise, you can contact an experienced attorney who specializes in dealing with odometer fraud cases.
Can Employees Roll Back Company Vehicles’ Odometer?
Let’s face it: odometer fraud is more synonymous with unscrupulous dealers and individuals. However, when discussing Timeero’s mileage-tracking capability with a potential client, they brought up an interesting take on odometer fraud.
Since it’s becoming so easy for anyone to tamper with a digital odometer, can employees roll the company cars’ odometers back or forward? To date, there are no reported cases of this nature, but that doesn’t mean it’s entirely out of the question.
If corporations are rolling back vehicle odometers, there’s a possibility that individual employees can engage in the act, primarily if you use pen and paper to track employee’s mileage.
Picture this: a delivery driver takes the longer, more scenic route and a missed delivery puts them in trouble. If the case puts their job on the line, what would prevent them from rolling back the car odometer to cover their tracks? Nothing.
Or the company is preparing to auction old company cars, and an employee has an eye on the vehicle they drive. With the availability of OBD tools, the employee can easily roll forward the car’s mileage to get it at a significantly lower price.
While these cases are hypothetical, they could be insidiously happening, putting your company on the corrosion course with the authorities. This begs the question, how can you prevent rogue employees from rolling back the vehicle mileage? It’s tricky, but you can give automatic mileage tracking tools a shot.
The Solution: Record Mileage Accurately With Mileage Tracking Apps
The best mileage tracking apps, such as Timeero, add a second source of truth that’s difficult to tamper. Doing so helps prevent odometer fraud while streamlining employee reimbursement. Here’s how Timeero helps:
Automatic Mileage Tracking
Timeero mobile app uses motion-detection technology to track mileage when the vehicle exceeds a predefined speed. Notice the difference.
While the vehicle’s odometer logs every mile the car travels, the Timeero app clocks miles when the:
Vehicle exceeds a preset speed threshold
The driver is clocked in to eliminate privacy concerns
How, then, does it prevent odometer fraud?
If you use paper and pen to track employee mileage, Timeero will come in handy. It doesn’t stop odometer fraud geared towards inflating the car’s value. Still, if you’re grappling with fudged mileage records, Timeero will help curb vehicle misuse.
Since it tracks mileage automatically, an employee can’t falsify their miles to claim a higher reimbursement. Plus, Timeero stops recording travels once the user clocks out, which is excellent for privacy and compliance.
Earlier, we mentioned a case where an employee can roll back the odometer to erase their trail. Adding Timeero’s route replay to your tech stack makes it easy to catch such employees.
As the name suggests, the feature enables you to recreate the employees’ route while clocked in. You can see where an employee was during the day and open the breadcrumbs to zero in on intricate details such as their speed.
This, coupled with the mileage tracker, can hint at whether an employee has altered the vehicle odometer readings. You’ll be able to ascertain whether they took a scenic route during business hours and make an informed decision.
If you have a field sales team, there are other pertinent issues to worry about more than odometer fraud. The time they spend with the customer is a good case in point. Ideally, each sales rep should spend quality time with each potential customer to win them over.
Ordinally, the reps have to clock in when they arrive at the client’s location and clock out as they leave, which can be arduous. The Timeero's Segmented Tracking feature saves your sales rep all that hassle. Reps clock in once, do their business, and clock out when done for the day.
The feature splits the employees’ days into travels and activities on jobs and locations, letting you see all the crucial details, such as distance covered, time spent traveling, etc. You’ll have a detailed visual representation of an employee’s entire working day at a glance.
If you follow our guide on how to spot odometer fraud, you’ll most likely land a used car in prime condition. The car should give you years of trouble-free service, and you can use the suggested mileage tools to reduce its wear and tear.
Generally, the more miles a vehicle covers, the higher the wear and tear. The suggested mileage evaluates past trips to propose the shortest distance to each destination. It minimizes the distance the vehicle covers, thus reducing maintenance costs. Learn more in our full Timeero review.
Other Timeero Features:
GPS location tracking
Time tracking with geofencing and facial recognition
Sidestep Odometer with Best Practices and Right Tools
Odometer rollback fraud isn’t just alive and well; the vice is easier to commit with digital odometers than mechanical ones. The car dealership arena is permeated with this odometer fraud. You have to sort through the mess to find a genuinely good used car.
If you’re in the market for a used car for your business, adhere to the best practices to increase your chances of finding a car in prime condition. Once you land the car, use the best mileage tracking app, such as Timeero, to prevent employee misuse.
FAQ: Odometer Rollback
Is It Possible to Roll Back a Digital Odometer?
Yes, it’s possible to roll back a digital odometer with an OEM or OBD tool.
What Does Rollback Mean on an Odometer?
Rolling back an odometer means altering odometer readings to make the vehicle look like it clocked fewer miles than it did.
Can Odometer Rollback Be Detected?
Yes, you can detect odometer rollback in multiple ways, such as by inspecting the vehicle history report or comparing mileage records with the mileage shown on the odometer.
What Is the Penalty for Odometer Tampering
The civil penalty for odometer fraud is $10,000 for each violation, whereas the criminal penalty can be up to $250,000.
Prevent odometer fraud and monitor your team’s movements in real-time
Samson is a mathematician turned content marketer specializing in SaaS and Tech content. He focuses on the practical aspects of software systems while keeping abreast of the industry’s cutting-edge principles to create informative and engaging content. When he’s not writing, Samson spends time playing or watching soccer.