Although the National Highway Traffic Safety Administration (NHTSA) is primarily known for its involvement in the promulgation and enforcement of motor vehicle safety standards, in 1972 Congress gave the agency the responsibility for the administration of the four titles of the Motor Vehicle Information and Cost Savings Act. One of these titles, Title IV, relates to odometers. Since 1972, the agency has become increasingly aware of the magnitude of the odometer tampering problem. Charged with the responsibility for implementing the various portions of the odometer requirements, the NHTSA has worked to achieve an effective program. Currently, the Office of Chief Counsel administers the odometer requirements. Having had charge of this program for the past two years, Ms. Kreshover has worked with representatives in the regional offices to maximize their effectiveness throughout the country. It is from the standpoint of the administering body that she speaks on the odometer requirements, their enforcement, and the proposed legislation to amend the act.
The implementation of Title IV has brought into focus the seriousness of the problem of odometer tampering. Although the practice of spinning back odometers has been for years a well-established part of used car sales transactions, its total economic effect is only recently becoming realized. With new car prices skyrocketing, the public is having to look more and more toward the used car market to satisfy its transportation needs. Reaction to this new consumer dependency has unfortunately led to routine and sophisticated odometer rollback operations that enable the seller to obtain excessively high purchase prices for vehicles whose true mileage has been concealed.
The National Automobile Dealers Association (NADA), several years ago, encouraged adoption of Federal legislation geared toward combating this method of consumer fraud. At stake was not only consumer protection from unethical sellers, but also the reputation and economic well-being of the many dealers who do not engage in odometer tampering. No uniform set of laws existed to control the problem throughout the United States. Cars, by their very nature, resist control in the absence of uniform nationwide laws since they can be easily driven beyond the reach of State regulation. It was hoped that initiation of Federal laws applicable to odometer disconnection and rollback would provide the necessary ammunition to attack the problem successfully.
The law Congress gave NHTSA prohibits the disconnection, resetting, or alteration of a vehicle odometer with intent to change the number of miles indicated thereon. It also requires the execution of a written disclosure of a vehicle's mileage at the time ownership of a vehicle is transferred. A violation of any of these requirements, committed with the intent to defraud, makes available to the buyer a civil remedy in the amount of $1,500 or treble damages, whichever is greater. The agency has been encouraging the filing of private civil actions, since under the present law it appears to be the best available means of enforcing the odometer provisions.
The Federal odometer law was enacted with virtually no investigative authority granted to any branch of government. Although the government is anxious to exercise its injunctive enforcement power, it is terribly constrained by its lack of adequate subpoena and information-gathering authority. A certain amount of evidence is necessary to support an injunctive suit, yet no authority has been given to actively go out and obtain such evidence. If sufficient information is given, the case will be referred to the Department of Justice with a recommendation for appropriate action.
Noting the restrictions and the consequent problems of successfully administering the law, Dr. James Gregory, Administrator of the National Highway Traffic Safety Administration, announced in February of this year a new campaign to stamp out odometer tampering. Aware of the severity of the problem and the economic and safety impact on so many people, Dr. Gregory had letters sent to the Attorneys General in all States with any kind of odometer law or regulation, urging them fully to enforce their laws and to assist the NHTSA in its efforts to implement the Federal requirements.
In coordination with the State participation program, NHTSA recently issued a new consumer-information pamphlet relating to odometers. A nationwide distribution of the pamphlet is planned through local consumer action groups who will be provided with a full supply.
Recognizing the need for wider-reaching penalties if the problem of odometer fraud is to be successfully combatted, Senators Moss, Magnuson, Hart, and Hartke on April 24, 1975, introduced a bill to amend the Cost Savings Act. The Senate bill incorporates provisions described by Dr. Gregory during the March oversight hearing by giving the Federal Government subpoena and investigatory authority, and adding both civil and criminal penalties, assessable by the Government. This legislation was passed by the Senate on June 5, 1975.
NHTSA's Agency also submitted to the Hill its own proposals to amend Title IV of the Cost Savings Act. This legislative package was forwarded to the House of Representatives on June 6, 1975, for consideration. Although the Senate-passed bill contains provisions that substantially represent the NHTSA's views on the subject of odometer tampering enforcement, the NHTSA bill incorporates certain technical points that are absent from the Senate version.
The NHTSA bill, known as HR 8091, sets forth more explicitly than the Senate bill, S1518, the investigatory authority granted to the Secretary. Under 8091, the Secretary is expressly authorized to conduct any investigation which may be necessary to enforce Title IV or any rules issued pursuant to it. Specifically, a DOT agent would be able to enter premises, for example, dealerships or car repair places, to inspect vehicles or equipment believed to have been the subject of a violation of the odometer requirements. The Senate bill would only permit examination of vehicles as opposed to equipment. This would unnecessarily limit the agency's enforcement authority, since special equipment is often involved in a tampering operation.
NHTSA'S agency is quite aware of the very special problems leasing companies encounter with regard to odometer tampering. The methods of operation of the guilty parties are often quite sophisticated, in that State lines are often crossed and several title transfers occur within a relatively short period of time.
Since it is known that many vehicles will be the object of some type of odometer tampering, continuing compliance with the odometer disclosure requirements is important. By completing this document, mileage on the vehicle is certified at the time it leaves the owners hands. A statement is also made as to its accuracy. This transaction is an important step in the transfer of title because it offers an opportunity to certify, in writing, the mileage on the vehicle at the time it leaves possession. Under the current disclosure requirements, which are a part of the regulation issued under section 408 of the Cost Savings Act, the disclosure form must be completed by the transferor and signed by him. The document is then given to the transferee. Currently, there is no requirement that the transferee retain the document. However, many people who purchase vehicles do hold on to the forms in order that they have actual evidence of the mileage on the vehicle at the time it came into their control. The fact that an odometer has been altered is not often recognized until some time after the actual tampering has occurred.
Retention of the disclosure statement executed at the time the vehicle is purchased, will not in all cases establish innocence of an odometer alteration. It will be important to be able to establish what the mileage was on the vehicle at the time of transferred ownership to another person. The person to whom transfer was made may not retain the statement given him. Thus, if he is the one who commits a violation, it may be one person's word against another's as to who actually spun back the odometer. In this situation the critical point in time for establishing the mileage is when ownership was given over to the transferee. The best protection is to retain a copy, carbon or by some other duplicating method, of the statement executed to the transferee.
In this position the new owner is particularly vulnerable and must take what may seem to be extra measures to ensure protection from involuntary involvement in an odometer rollback operation.
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