Target 2: Is your vehicle safe? Wisconsin a hot target for fraudulent dealers

BROWN COUNTY, Wis. (WBAY) - Used vehicle shoppers should always live by the saying "buyer beware." Target 2 Investigates found that people from across the country are coming to Wisconsin because of its lax rules when it comes to allowing out-of-state dealers to sell here. The fraudsters are cheating the system and cheating consumers out of money.

A state law just went into effect that gives buyers more protection when they sell their cars. However, it doesn't tackle the process of obtaining licenses to sell cars. That process remains very easy in the state. It's resulting in headaches and safety concerns for drivers.

"You could buy a car and have no idea what you're actually getting because a paint job, throwing some tires on it, things like that, can make it look great," says Michael Domke, Wisconsin DMV Chief of Dealer and Agent Section. "But it's the inside, the components, the history, that's what you really want to look at."

As Wisconsin's Dealer and Agent Section Chief, Michael Domke has seen an increase in fraud complaints rolling across his desk. Most come from sales via Craigslist or people buying from someone claiming to be an out-of-state dealer.

"You're stuck. and what you often find is when you want to try and go back and say, hey, this was wrong or get your money back, you can't find them. They're not on the same corner. That phone number doesn't work anymore. You're out the money," Domke says.

It happens every day. Domke says it's not neighbors looking to offload their used vehicles. These are groups that travel state-to-state and buy and sell cars illegally.

Wisconsin is a hot target.

"So it started in Indiana, and Indiana took action and abolished their wholesale license, and so then we watched that group kind of move to Washington, Missouri and Texas," Domke says.

Domke says Wisconsin, in the spirit of interstate commerce, still allows people with wholesale dealer licenses from other states to get into Wisconsin's auto auctions. Those are open only to dealers or their representatives to buy cars on the cheap. He says many of those vehicles end up on Craigslist.

"Unlicensed sales is a challenge for us," Domke says.

It's a challenge because it is easy to obtain a license from other states.

"For a wholesale license, you need to have a location. You need to have an office to store your business records. You need to have the ability to park a vehicle outside. And that's about it," Domke says.

Outside of licensing fees and a surety bond, there's not much more to it.

That's where it impacts all of us. We're sharing the roads with vehicles with unknown histories.

"So what we see is they will not fully disclose the condition of the car, the history, what happened, and in some situations they're rolling back the odometer," Domke says.

Domke says the state is overwhelmed with the number of odometer roll back cases.

"I'm saying hundreds of dealers and individuals and tens of thousands of cars," Domke says.

It used to take some work to roll back miles on a vehicle, but no longer. It's all in a car's computer system. That can be easily modified. Some do it by Blue Tooth.

Not only can an odometer quickly be reset, so can warnings of safety problems with a car.

"They'll identify what it's doing and why is it happening. Reset the light and they quickly sell it to you before it comes back on," Domke says.

Tampering with an odometer is a federal crime.

Two brothers have active arrest warrants for buying more than 140 cars at auction and rolling back their odometers, according to investigators. They tried to sell the vehicles in the Milwaukee area in 2014.

Domke says he doesn't often receive odometer complaints from Wisconsin dealers because laws and regulations for them are strict. Issues with out-of-state license holders ... that's a different story.

"We can only help you if you bought from a Wisconsin licensed dealer. That's where our authority stops," Domke says.

The penalty is a forfeiture.

A law recently enacted in response to an investigation into the shuttered Standard Pre-Owned car consignment business only helps investigators react once the illegal sales have taken place.

Local, state and federal authorities continue to look into allegations of fraud at Standard Pre-Owned and owner John Solberg. Solberg would make contact with people who were selling their vehicles and offer to do it for them. Investigators say he never paid up or held on to the vehicles.

The law passed by the state legislature and signed by Gov. Tony Evers makes it easier and faster for the Wisconsin Department of Transportation to intervene and deny or suspend dealer licenses.

"But as far as their requirements and their ability to set up shop here, no. This bill doesn't address that," Domke says.

So how do you protect yourself?

The DMV says get a Carfax or AutoCheck Report before you purchase a vehicle. There's a small fee, but they track everything from oil changes to accident history.

Make sure the mileage on the car's title matches the odometer.

If you are a victim, you can file a complaint with the state by visiting: The Wisconsin DOT Dealer Complaint website

CLICK HERE for tips on spotting odometer tampering.

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