Auto fraud is rampant. Here’s how to avoid getting caught
Pay inflated prices for simple auto repair jobs. Use inexpensive parts for repairs. Sell unnecessary extended warranties. Charge higher interest rates than necessary for loans.
These are just some of the ways auto-related scams victimize consumers, according to a new report from Tampa-based insurance price comparison website Clearsurance.
The report, based on an analysis of complaints made to the Federal Trade Commission in 2020, found Nevada to be the worst state for auto-related fraud in 2020, with 346 complaints per million people, followed by Delaware (338) and Florida (337).
Massachusetts reported the lowest number of complaints – 15 per million people, followed by Kansas (73) and Rhode Island (76).
According to the report, the two most likely ways for consumers to get scammed are through repair shops and dealerships. While the majority of these types of businesses are honest, the services they provide tend to involve complexities that provide plenty of opportunities to trap consumers who might be confused or uninformed.
“Unless you’re a savvy mechanic or rental expert, it’s easy for crooks to slip into confusing technology to add fraudulent charges,” the report says.
The complaints that Clearsurance used for its analysis include what it calls “soft fraud” cases, including willful scams and deceptive marketing practices.
The FTC has defined auto-related cases as: “Misleading or deceptive claims about the price, financing, leasing or warranties of the automobile; repair / maintenance problems with newly purchased used or new cars, including dissatisfaction with the service provided by auto mechanics; concerns about pricing and price abuse against gas stations and oil companies; etc. “
Auto repair shops often defraud their customers, including performing unnecessary repairs, inflating the prices of simple repair jobs, using cheaper counterfeit parts, charging for unused repair parts, and faking malfunctions, such as “Find” oil leaks.
According to the report, dishonest dealers will hide unnecessary products or services in their leases, lie about a customer’s credit rating to justify charging more, charge extremely high interest on loans, sell unnecessary extended warranties, and will charge for vehicle preparation work that the manufacturer already has. did, like vacuuming and washing the car and removing the protective plastic.
How to avoid getting ripped off
Protecting yourself against surcharges or outright scams unfortunately requires work from the consumer. Here are some tips to avoid being victimized:
– Before purchasing a used car, it is essential that consumers check the vehicle history through a service like Carfax.com, which can reveal service and accident history and whether the odometer has been canceled , and VinCheck.com, a free service from the National Insurance Crime Bureau that can reveal whether the car has been reported stolen or titled as a rescue vehicle.
– Never donate money for a car you haven’t seen or driven. When you are in the car, look at the odometer and see if the mileage matches the wear you see. If the odometer reading is low, you should expect low wear. Also check for dirt, mud, or rust under the carpet or seats, as these could indicate the car has been flooded.
– At dealerships, always demand that quotes or any other promise be put in writing. “Oral promises or warranties are unenforceable and just as easily may never have happened,” said Joshua Feygin, a Hollywood, Florida-based lawyer specializing in auto dealer claims. Additionally, consumers should never leave a dealership without having a clear, countersigned copy of the finance agreement or lease they have entered into with the dealership. “Dealers are required to provide consumers with a copy of every document bearing their signature.”
– Check out customer reviews of repair shops on social media sites and on the Better Business Bureau website. “If a store or auto dealership has a history of rising prices or fraudulent transactions, doing a little research up front will usually reveal it,” the report says.
– Always ask for a written estimate for the repair work and make sure to check the box “I request a written estimate” so that you get a second written estimate and you have to approve it if the final repair invoice will be due. at least $ 100 more than initially estimated, Feygin said.
– Ask the mechanic to let you see the replaced parts. “Some mechanics will tell consumers that they can’t show them the parts because they have to return them for core deposits,” Feygin said. A core is a part that can be rebuilt or recycled for a future sale. Mechanics (and consumers) can usually get a discount on the replacement part by returning the core. “While it’s true that mechanics get money back for basic exchanges (mainly for reusable parts like calipers and alternators), they usually have a reasonable amount of time to return the part.”