Car Dealer Fraud Attorney in Houston, Texas

Auto Dealer Fraud In Texas Is A Real Problem

You may have heard in the news recently about car dealer fraud in Texas involving a fake paper tag crisis on an unprecedented level. Police investigations have revealed how some small car dealers are selling fraudulent temporary tags in the hundreds per month. These criminals are taking advantage of loopholes in order to gain access to the DMV and make a small fortune by printing such tags.

The reality is that not even large and successful car dealerships experience this volume of sales. This type of fraud allows other criminals to commit felonies and evade authorities. The problem has become so widespread that it is estimated to rake in $200 million for these dealers in Texas alone.

While the issue of fake paper tags is indeed a big one, it’s unlikely something you’ll need to worry about. As an honest consumer, you’re not going to provide fake contact information. Furthermore, you’ll probably insist on researching the VIN which would eliminate the possibility of purchasing a stolen vehicle. However, as you’ll learn below, there are less obvious types of car dealer fraud that happen than you’d think. 

Common Types Of Car Dealer Fraud

Before diving into some examples, let’s get one thing straight. Most car dealers and salesmen abide by the law and genuinely care about their customers and the service they provide. Unfortunately, there are always some bad apples in the bunch as the saying goes. Here’s what to look out for when purchasing a new or used vehicle.

Bait and Switch

Perhaps the most prevalent type of fraud is what is referred to as the Bait and Switch tactic. The goal is to lure a potential buyer with a low sale price on a car with an advertisement on tv, radio, or the internet. Once the buyer arrives at the dealership to inquire about that car they are told that deal or vehicle is no longer available.

At this point, a salesman may try to sell you another more expensive vehicle by smooth-talking and pressuring. Not only is this type of behavior immoral and dishonest, but there are laws to protect consumers from bait and switch. Therefore, make sure you do some research on the dealership and read complaints to see if they have a history of this type of illegal practice.

Misrepresentation of Vehicle History

Tools like Carfax are a great asset to consumers for obtaining a vehicle history report. However, if a car you’re researching has been in an accident that occurred only months prior that might not show in the report. It’s likely the dealer is aware of the accident and if they fail to disclose that information to you that is car dealer fraud.

Another dirty trick that relates to misrepresentation is an odometer rollback. Dealers who engage in this tactic will try to fool buyers into thinking a vehicle has fewer miles than in actuality. They’ll happily sell it to you at an inflated price telling you what a great deal it is.

Unwanted Add-ons and Hidden Fees

Buying a car at a dealership is a process that may take a couple of hours or longer. That euphoric feeling of agreeing upon a sale price can come crashing down while finalizing the paperwork. Shady dealers love to throw in options that you may not need or can get cheaper elsewhere. It’s not uncommon for the sale price to jump hundreds even thousands more than what you agreed to pay.

Such add-ons usually come in the form of warranties or service and insurance packages. You are under no obligation to purchase these items despite the dealer claiming they are mandatory. If the salesman insists, ask to speak to a manager to clarify why a particular add-on is needed. Chances are they’ll be unable to provide a valid reason.

Are You A Victim Of Car Dealer Fraud?

Armed with the above information, you’re now aware of some of the deceptive practices that auto dealers may use to take advantage of you. First-time buyers are especially vulnerable and these dealerships are licking their chops trying to pull a fast one.  Don’t let them! Remember, you’re the customer and if you so choose may take your business somewhere else.

Now, if you’re reading this and believe you’ve been deceived about your vehicle purchase you have legal options. Please contact me by calling or filling out my case evaluation form to discuss your situation. You’ll receive my honest opinion and recommendations on what steps to take next. There’s absolutely no obligation to retain my counsel unless you’d like to proceed further.