Other Automotive Issues: Towing, Fraud, Repossession & Title Problems

Beyond the major categories of lemon law defects, insurance disputes, garage repair fraud, and finance mis-selling, automotive consumers face a constellation of other predatory practices and legal issues that collectively cost billions annually. These include: predatory towing and storage fees (where consumers receive invoices exceeding $10,000-$200,000 for impound lots holding vehicles hostage); odometer fraud affecting an estimated 450,000 vehicles per year with consumer losses of $1-10 billion (1.9 million currently listed vehicles have rolled-back odometers); wrongful repossession (1.6 million vehicle repossessions in 2024, with 10-15% involving legal violations like breach of peace or improper notice); VIN cloning and title fraud (organized rings generating $36 million annually by re-VINing stolen vehicles and selling them to unsuspecting buyers); salvage title washing (where flood/total loss vehicles are repaired and sold without disclosure); extended warranty scams (FTC shut down 3 major operations in 2023-2024, recovering $26 million for consumers); and vehicle recall compensation (manufacturers often fail to compensate owners for diminished value, rental cars, and out-of-pocket repair costs when recalls drag on for months or years).

Each category has distinct legal frameworks and remedies. Predatory towing is governed by state towing statutes (typically capping fees at $100-$300 for initial tow plus $25-$75/day storage) and local consumer protection laws; violations often entitle consumers to refund of fees plus statutory damages of 2-3× actual. Odometer fraud violates federal law (49 USC §32703-32711) with civil penalties of $10,000 per violation or 3× actual damages (whichever is greater), plus attorney fees—making even modest $2,000 overpayment cases economically viable to pursue. Wrongful repossession claims arise under state commercial codes (UCC Article 9) and consumer protection laws, with remedies including vehicle return, elimination of deficiency balance, actual damages for lost property/emotional distress, and punitive damages for egregious conduct. VIN cloning victims can void sales and recover purchase price plus consequential damages under state fraud statutes. Extended warranty scam victims can file FTC complaints and pursue refunds plus statutory damages under state consumer protection laws.

Recent enforcement actions demonstrate the scale of these problems and available remedies. The FTC secured a $10 million settlement against CarShield in 2024 for deceptive warranty advertising and denying valid claims. The CFPB's January 2025 report on repossessions revealed that average deficiency balances surged to $11,340 (December 2022), up from $7,971 in December 2021—a 42% increase driven by vehicle depreciation and high repossession costs. The use of third-party repossession forwarders skyrocketed from 31% (January 2018) to 66% (December 2022), driving up costs charged to consumers and increasing wrongful repossession incidents due to servicing breakdowns. The CFPB fined Fifth Third Bank $15 million in 2023 for wrongful repossessions, requiring return of vehicles and elimination of $3,000-$8,000 deficiency balances. In January 2025, American Honda Finance Corporation settled with the CFPB for adding inaccurate information to consumers' credit reports following repossessions. General Motors agreed to $6,000 compensation per owner for Chevy Bolt battery recall delays (in addition to free battery replacement), recognizing that months without use of vehicle warrants payment beyond just repair costs. New York's Attorney General shut down multiple predatory towing operations in 2024, voiding bills exceeding $50,000-$200,000 and returning vehicles to owners. These precedents show that consumers can recover not just actual costs but also statutory damages, consequential losses, and attorney fees—making it economically feasible to fight back even when individual losses seem modest.

The UK and EU have parallel consumer protections, though frameworks differ. UK consumers benefit from the Consumer Rights Act 2015 (goods must match description, be of satisfactory quality), Sale of Goods Act protections against misrepresentation, and Financial Conduct Authority oversight of warranty providers. The Motor Ombudsman handles disputes involving accredited dealers who sold vehicles with undisclosed history. EU consumers have strong protections under the Unfair Commercial Practices Directive 2005/29/EC (prohibits misleading sales practices, including odometer fraud and undisclosed damage) and the Consumer Rights Directive 2011/83/EU (14-day cooling-off period for off-premises sales). Member states often provide additional remedies through national consumer protection agencies that can order refunds, impose fines, and ban repeat offenders.