It has been reported recently that Ferrari dealers had access to a proprietary device which on cars from the Italian marque. Since lower mileage readings make a vehicle worth more, a “reset” odometer would be something a Ferrari owner might desire. Of course, “resetting” an odometer is generally illegal in the United States. There is a Federal statute forbidding it and many states have laws outlawing it as well. The problem here is that device–called a “DEIS” tool–was allegedly provided to the dealers by Ferrari, along with instructions on its use. All of this became public recently in litigation in Florida. And without getting into the nuances of that action, we need to take a look at the one big factor everyone has missed so far.
The Federal statute is quite clear. says a person may not “disconnect, reset, alter, or have disconnected, reset, or altered, an odometer of a motor vehicle intending to change the mileage registered by the odometer.”
This would address dealers, if they did, in fact, “reset” the odometers to read differently than that registered by the gauge in the first place. But what about a manufacturer who assists the dealer? Section 4 of the same statute forbids conspiracy to commit any of the acts forbidden by this statute. Could a case be made out that Ferrari conspired with its dealers to “reset” odometers in violation of this statute?
Ferrari has disputed this, and quite vigorously. Krista Florin, Ferrari of North America's Director of Communications, : “Resetting an odometer to zero in case of a malfunction of the odometer when the pre-repair mileage is unknown is consistent with the federal odometer law.”
Which is true. But it presupposes two things, one obvious and one not-so-obvious.
She is suggesting that every single instance where the DEIS tool was used involved a “malfunction of the odometer” and that the “pre-repair mileage [was] unknown” at the time of the use of the tool. For the sake of this discussion, let’s assume those two factors were always true.
The drafters of the statute anticipated just such an argument. What if the odometer was broken and had to be reset to zero? says that if the mileage is reset to zero then, “the owner of the vehicle or agent of the owner shall attach a written notice to the left door frame of the vehicle specifying the mileage before the service, repair, or replacement and the date of the service, repair, or replacement.”
Were the door frame notices placed on each and every one of the Ferraris which had its odometer reset? If so, then the law was not broken – assuming the repair was in fact necessary. But in any case where the odometer was “reset” and the sticker was not placed? That would be a whole different set of problems for the players here as it would be a violation of this statute.
Anyone who violates this statute can be sued by the US government for $10,000 in civil penalties per violation. They can also be sued by the state where the violation took place. And, perhaps more ominously, there is a criminal aspect to this. A person who is convicted of violating this statute faces fines and up to three years in prison.
But wait – what about a corporation? Would they be in the clear here? Again, the Feds think of everything. “If the person is a corporation, the penalties of this subsection also apply to a director, officer, or individual agent of a corporation who knowingly and willfully authorizes, orders, or performs an act in violation of this chapter or a regulation prescribed or order issued under this chapter without regard to penalties imposed on the corporation.” .
And it doesn’t stop there. Anyone who bought a car with a “reset” odometer and no door sticker can file a lawsuit – regardless of whether the Feds or the state filed criminal or civil actions of their own – and those can get ugly for the parties who didn’t follow the strict letter of this law. A minimum of $10,000 is the amount a person can sue for – and the amount would skyrocket with a Ferrari since the amount of damages is tied to the value of the car with and without the tampered odometer.
How would someone find out if their odometer was tampered with, though? How can they prove it? That's the tricky part. But someone who is suspicious of this could poke around a little, and if anyone files a suit (or the one already filed goes a little further) records can be subpoenaed and witnesses can be compelled to testify. It’s one of those things where it only takes a small crack for the whole dam to burst.
Odometer tampering is not a hot topic in the news on most days. But occasionally you do hear about the authorities going after someone in a high profile case or one involving more than a few cars. This very well could be the high-profile case which catches the attention of a state or Federal prosecutor. But even without that, I will be curious to see if there is a spate of lawsuits brought by individuals who bought the cars with the “reset” odometers.
Steve Lehto is a writer and from Michigan. He specializes in Lemon Law and frequently writes about cars and the law. His most recent books include , and . He also has a where he talks about these things.