FedEx Accused of Largest Odometer Rollback Fraud in History With Used Vans
FedEx allegedly replaced odometers on used vans and intentionally sold them with inaccurate mileage.
Once FedEx vans reach the end of their package-delivering lives, they're resold and repurposed for various purposes. Many of them are turned into food trucks, as their size and boxy shape are perfect for mobile kitchens. However, FedEx is facing a lawsuit for selling such vans, as it's being accused of the largest odometer rollback fraud in history.
The lawsuit accuses FedEx of replacing the odometers in many of its vans with new ones that read zero miles, using the vans for a bit longer after that, and then selling them at auction with 100,000 miles or less on the new odometers. With such low indicated mileage, business owners were buying the vans for top dollar, thinking that there were still pretty fresh. However, their real mileage was sometimes as much as four times the odometer readout, thus leading to countless mechanical issues that would cost the customers far more money. In some cases, the issues would be so severe, the vans were useless and businesses went bust.
According to KTNV Las Vegas, Tom Layton of Henderson, Nevada first noticed FedEx's odometer rollbacks in 2017. Layton, who's been buying and selling trucks and vans for 36 years, bought a FedEx Freightliner truck with around 180,000 indicated miles. When he sold the truck, his buyer hooked it up to a computer that told them the real mileage was around 400,000 miles. Layton filed his own lawsuit back then, which is separate from the class-action lawsuit FedEx is currently facing.
Since then, customers from California, Tennessee, New Jersey, Florida, and Virginia have all noticed odometer rollbacks on former FedEx vehicles.
FedEx didn't always sell its retired vans. Once they hit about 350,000 miles, they would usually scrap the vans. It wasn't until 2011 that FedEx started auctioning old vans off through its fleet company, Holman Fleet Leasing (also a defendant in the lawsuit). The lawsuit alleges that both FedEx and Holman intentionally replaced the odometers to artificially inflate the values of the vans, so they'd sell for higher prices at various auctions throughout the United States. Then, according to the accusations, both companies would split the profits.
"FedEx, with the knowledge and assistance of Holman, replaced thousands of odometers on FedEx/Holman Vehicles," the lawsuit states. "Though odometers, as automotive components, do occasionally wear out or malfunction and need to be replaced, there was no valid reason for this large-scale replacement of the odometers on FedEx/Holman Vehicles, other than to perpetuate their agreement to commit odometer fraud."
It isn't illegal to replace odometers and it isn't even illegal to sell vehicles with odometers that have inaccurate mileage readouts. However, to do so, a disclaimer needs to be made by the seller, indicating to the buyer that its mileage readout is inaccurate and that the odometer was replaced. According to the lawsuit, neither FedEx nor Holman did that.
"Defendants purposely failed or refused to attach such a warning because they intended to mislead potential buyers of the vehicles."
However, FedEx denies the allegations. “We are aware of the allegations made in the complaint and will vigorously defend the lawsuit,” a FedEx representative told Spectrum News.
The Drive reached out to FedEx for a comment and will update this statement if we get one.
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