INSTRUCTOR SCRIPT:
Fraud in the vehicle sales context can take many forms: misrepresenting the condition of a vehicle, concealing known defects, odometer tampering, title washing, forging signatures on documents, falsifying credit applications, and misrepresenting the terms of a sale. All of these constitute fraud, and all of them carry consequences ranging from civil liability to criminal prosecution.
Vehicle sales fraud is prosecuted aggressively in California. The Attorney General’s office, local district attorneys, and the FTC all have enforcement authority. In addition to criminal penalties, victims of fraud can pursue civil remedies including rescission of the sale, actual damages, punitive damages, and attorney’s fees. Under California’s Consumer Legal Remedies Act, successful plaintiffs can also recover injunctive relief — a court order requiring you to change your business practices.
The best protection against fraud accusations is transparency and documentation. Disclose everything material. Document every disclosure. Keep complete records. If you’re ever unsure whether something needs to be disclosed, disclose it. It’s always better to over-disclose than to be accused of concealment.