Regulation on deceiving customers and related judgements in Vietnam

Hello Ms. Hoa, for your question, LawNet would like to answer as follows:

1. What is deceiving customers?

Based on the provisions of Clause 1 Article 198 of the Criminal Code 2015 of Vietnam, deceiving customers is considered as the act of fraudulently measuring goods or services or committing other fraudulent acts while buying or selling goods/services in order to reap illegal profits.

2. Penalties for deceiving customers

According to Article 198 of the Criminal Code 2015 (amended in 2017) of Vietnam, any person who commits acts of deceiving customers, if all the elements are constituting the crime of deceiving customers as prescribed above, that person shall receive a warning, be liable to a fine, a community sentence or face a penalty of up to 05 years' community sentence depending on the nature and seriousness of the offense, specifically:

“Article 198. Deceiving customers

1. Any person who fraudulently measures goods or services or commits other fraudulent acts while buying or selling goods/services in any of the following circumstances shall receive a warning, be liable to a fine of from VND 10,000,000 to VND 100,000,000 or face a penalty of up to 03 years' community sentence:

a) The offender has incurred an administrative penalty or has an unspent conviction for the same offence;

b) The illegal profit reaped is from VND 5,000,000 to under VND 50,000,000.

2. This offence committed in any of the following circumstances carries a fine of from VND 100,000,000 to VND 500,000,000 or a penalty of 01 - 05 years' imprisonment:

a) The offence is committed by an organized group;

b) The offence is committed in a professional manner;

c) The offence involves the use of deceitful methods;

d) The illegal profit earned is ≥ VND 50,000,000.

3. The offender might also be liable to a fine of from VND 20,000,000 to VND 100,000,000, be prohibited from holding certain positions or doing certain works for 01 - 05 years.”

In case the act of deceiving customers does not have enough elements to constitute the crime of deceiving customers according to the provisions of the Criminal Code 2015 of Vietnam, the offender will be administratively sanctioned according to the provisions of Article 61 of the Decree No. 98/2020/ ND-CP of the Government of Vietnam, specifically:

“Article 61. Other violations in customer/consumer relationships

1. A fine ranging from VND 500.000 to VND 1.000.000 shall be imposed for one of the following violations involving the goods or services worth less than VND 5.000.000:

a) Failing to make compensation/ refund or exchange goods or services for customers or consumers due to mistakes;

b) Swapping goods or cheating at delivery of goods or supply of services to customers or consumers;

c) Failing to make compensation/ refund or exchange swapped or cheated goods or services for customers or consumers;

d) Deliberately cutting down packages, replacement parts and accessories, promotional goods, technical documents and instructions for use when selling goods or supplying services;

dd) Conducting trade promotion or propose transaction directly with a person who is incapable of civil acts or an incapacitated person;

Requesting or forcing consumers to pay costs of goods or services supplied without reaching an agreement with consumers;

g) Taking advantage of consumers’ difficulties or disasters or epidemics to supply goods or services of poor quality.

2. A fine ranging from VND 1.000.000 to VND 5.000.000 shall be imposed for the violation in Clause 1 of this Article if the value of goods or services is from VND 5.000.000 to under VND 20.000.000.

3. A fine ranging from VND 5.000.000 to VND 10.000.000 shall be imposed for the violation in Clause 1 of this Article if the value of goods or services is from VND 20.000.000 to under VND 50.000.000.

4.A fine ranging from VND 10.000.000 to VND 15.000.000 shall be imposed for the violation in Clause 1 of this Article if the value of goods or services is from VND 50.000.000 to under VND 100.000.000.

5. A fine ranging from VND 15.000.000 to VND 20.000.000 shall be imposed for the violation in Clause 1 of this Article if the value of goods or services is VND 100.000.000 or more.

6. A fine ranging from VND 1.000.000 to VND 5.000.000 shall be imposed for committing one of the following violations:

a) Failing to provide explanation, providing explanation after the prescribed deadline, or failing to provide information, documents or evidences at the request of competent authorities in charge of protection of consumer rights;

b) Refusing to receive the consumer's request for negotiation or failing to conduct the negotiation within 07 business days from receipt of the consumer’s request.

7. Additional penalty:

The business license, certificate of eligibility to do business or practicing certificate shall be suspended for a fixed period of 01 - 03 months or operations shall be suspended for a fixed period of 01 - 03 months if one of the violations prescribed in Clause 4 and 5 of this Article is repeated or re-committed.

8. Remedial measures:

a) Goods of poor quality shall be recalled if committing the violation in Point g Clause 1 in any of the cases prescribed in Clause 1 through 5 of this Article;

b) The violating entity is compelled to return any benefits illegally obtained from the commission of one of the violations in Clauses 1, 2, 3, 4 and 5 of this Article.”

3. Judgements on deceiving customers

3.1 Judgement No. 77/2022/HS-PT on deceiving customers

- Trial level: Appellate.

- Trial agency: People's Court of Da Nang City.

- An extract from the judgment: “In early 2021, Pham Cong H returned to Nghe An to play and met N (whose identity and background were unknown). After that, the two discussed and agreed that N would set up a Facebook page specializing in iron and steel trading to find customers. When a customer places an order, N will call to report the amount of iron and steel for H to sell to the customer. At the same time, both parties agree that when a customer buys iron and steel, they will lack the amount of iron and steel that the customer has ordered, and when delivering iron and steel to the customer, they will use deception in counting the amount of iron (one iron counts as two) for profit. H explained the above plan to Tran Van H1 and invited H1 to join, and H1 agreed. H assigns H1 to directly survey the location and count the amount of iron and steel handed over to the customer.”

3.2 Judgement No. 173/2020/HS-ST on deceiving customers

- Trial level: First-instance.

- Trial agency: People's Court of Ben Cat District, Binh Duong Province.

- An extract from the judgment: “From November 10, 2017 to November 16, 2017, Nguyen Dinh N, Nguyen Lap P and Le Ba L together committed fraud in weighing and selling scrap iron, P surreptitiously attached electronic chips to the weighing system at AHT Company's raw material processing workshop and using control switches to increase iron weight when sold to AHT Company is 113,970 kg heavier than the actual weight, with a total value of 780,694,500 VND, of which illegal profit is 667,875,000 VND. Defendant Nguyen Lap P together with Nguyen Dinh N and Le Ba L committed the offense, in which N was the one who played the role of initiating and enticing. P and L are the persons who directly committed the crime. In which, N and P carry out the crime with a more active role than L.”

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Key word: deceiving customer | fraud | Criminal Code | penalty | judgment |

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