california dealer fraud

Within auto dealer industry you will find a lot of honest professionals and organizations, but you will also find some bad-faith dealers whose activities can be described as fraudulent. Moreover, some of their acts can even be charged as crimes under California Fraud Laws.

Consumer protection is one of our highest priorities in California and while the majority of dealers follow the rules, the others prefer to break the law and, in result, they can subject to the responsibility. Any person, legal entity or even government can become a victim of fraud crimes.

Below, we will introduce you the main elements of the California Dealer Fraud Law.

1.   Definition of the Dealer Fraud in California

2.   Elements of the California Dealer Fraud

3.   Common types of California Dealer Fraud

4.   Dealer Fraud Responsibility

5.   Legal Defenses to California Fraud Accusations

6.   Related Articles

Additionally, we are ready to provide answers to your initial questions concerning Dealer Fraud in California for free.


1.   Definition of Dealer Fraud in California

“Auto dealer fraud” describes deceptive and unlawful practices that automobile dealers use during advertising, pricing negotiation, sales and the financing of a vehicle; and can occur during any stage of the vehicle purchasing process.

Mostly, consumers are not aware that auto dealer fraud is punishable under California law. It can result in criminal or civil punishment. The simple knowledge of your rights can save a lot of time and money.

Example: Douglas Harding was sentenced in San Diego Court to three (3) years state prison, three (3) years’ probation and he was ordered to pay $2.1 million to defrauded customers. In 2006, DMV started receiving complaints from individuals and lending/banking institutions. It was discovered that Harding failed to pay off trade-in vehicles, transfer registrations and pay off consigned vehicles.



2.   Elements of the California Dealer Fraud

Below we provide you with some specific types of deceptive and unlawful conduct of a dealer which can face him or her to California Dealer Fraud conviction. The following deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer are unlawful:

– Misrepresenting the source, sponsorship, approval, or certification of goods or services;

– Using deceptive representations or designations of geographic origin in connection with goods or services;

– Representing that goods are original or new if they have deteriorated unreasonably or are altered, reconditioned, reclaimed, used, or secondhand;

– Representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another;

– Disparaging the goods, services, or business of another by false or misleading representation of fact;

– Advertising goods or services with intent not to sell them as advertised.


3.   Common types of California Fraud

There are certain common types of auto dealer fraud, including:

–     Former taxicabs, limousines, rental vehicles, and publicly owned vehicles usually have very high mileage and a lot of wear-and-tear;

–     Used car dealership scams include cases like used vehicles being involved in an accident;

–     Odometer fraud;

–     Pre-sail availability of written warranties;

–     Receipt of translated contracts;

–     Warranty fraud;

–     Etc.


4.   What can be if I am accused of Dealer Fraud in California?

Generally, California law is very consumer-oriented and it allows the consumer to obtain a refund of all of his/her monthly payments, down payment and other consequential expenses less a statutory usage charge based on the time the vehicle first becomes defective. In addition, the law mandates that the manufacturer pays for the consumer’s attorney’s fees.

Related to criminal charges, the offender can face whether a misdemeanor or a felony charge depending on the specific circumstances of your case.

California criminal fraud can be punished by fines or imprisonment if the prosecution has succeeded to prove the offender’s criminal intent. Criminal fraud requires criminal intent on the part of the perpetrator, and is punishable by fines or imprisonment.

5.   Which defenses can be used against California Fraud Accusations?

Your California defense attorney can use various legal defenses in order to reduce or dismiss the charge. Below, we represent some of them.

–     False confession

–     False accusations

–     Plea bargain and dismissals

–     Lack of Knowledge

–     Etc.

Hovanes Margarian is an experienced Los Angeles fraud attorney in the state of California, who specializes in car dealer fraud. Due to his in-depth knowledge and experience, Mr. Margarian knows exactly what is necessary for you to win your case. We encourage you to look over the different types of auto dealer fraud, and contact us if you believe you are a victim.

6.   Related Articles

Fraud Offense

Identity Theft

Insurance Fraud

Mail Fraud

Credit Fraud

Security Fraud

Telemarketing Fraud

Wire Fraud

Tax Evasion

Mortgage Fraud


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