GV Lawyers would like to present you an article by Nguyen Cong Duy Thong and Tran Thi Cam Van, titled “When prices dance” published in Saigon Economic Times, Issue No. 32-2021 (1.599) on 05 August 2021.
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This wave of Covid-19 outbreak is more complicated and prolonged. Amid psychological panic, the residents’ rush to hoard food and supplies in tandem with some problems in the supply chain prompt supply to fall short of expectation at times. Taking advantages of this situation, many individual sellers and businesses raised selling prices to gain profits.
The Law on prices stipulates that prices of goods must be publicly listed and goods must be sold at the listed prices. The law also prohibits organizations and individuals from taking advantages of economic crises, natural disasters, hostility, fires, epidemics, other unusual conditions, as well as the State’s policies to sell goods and services at unreasonable prices. Therefore, taking advantages of the current epidemic to increase selling prices by 3-4 times is clearly illegal.
Legal might is not stringent enough to deter violations
According to Article 12.3 of Decree No. 109/2013/ND-CP, the act of selling goods at higher prices than listed will be fined VND 5-10 million for individuals, and twice this level for organizations. In addition, the violating store is also forced to repay customers the monetary amount collected in excess of the listed price. If it is impossible to find those customers, the money must be paid to the State budget.
However, the fine of VND 10 million is not strong enough to deter violations, as the illegal profits gained from this act is sometimes many times higher than that. This is also the reason why stores keep violating the law. Meanwhile, the damage to each consumer is often small in each purchase, so they choose to “ignore” the violation, or just hesitate to speak out and denounce the violation. However, this illegal revenue is very large when we add up the numbers collected from a large number of customers, so in some cases, consumers feel threatened when they dare to speak out and expose the violations of the store.
The current law creates many favorable conditions for consumers to sue individuals or organizations which commit violations, particularly (i) no obligation to provide proof of offences; (ii) not having to pay court fees and charges; (iii) being eligible to initiate a class action in some cases where many customers are involved (who have the same defendant and/or the same relationship/dispute with the defendant). However, it is not feasible for consumers to initiate a civil lawsuit against an individual or organization, since this kind of lawsuit takes a lot of time and a litigation cost which is many times higher than the damages that consumers can claim from the violating individual or organization, and it is often not easy to bring a large number of consumers together to initiate a class action.
Measures to protect the customer’s interests
Firstly, it is necessary to raise the amount of administrative fines and/or strengthen criminal liabilities to effectively discourage those who intend to commit violations. Civil proceedings should be simplified and enable consumers to exercise their right to initiate a legal action.
Secondly, there should be a mechanism to closely monitor whether goods and services are sold at the listed prices: strengthen inspection, examination, and detection, and promptly handle violations; receive and handle denunciations and recommendations from customers
Thirdly, customers need to protect themselves by regularly paying attention to, and carefully comparing the listed prices with the actual prices before paying. Residents also need to speak up for themselves and denounce violations to the competent authorities.
Fourthly, social organizations in charge of protecting consumers need to fulfill their responsibility by pointing out violations, providing advice and actively supporting consumers to make complaints and denunciations against organizations and individuals that violate the consumer’s interests.
Fifthly, within the legal framework, it is necessary to promote the role of the mass media (which are inherently very effective) to promptly report the act of selling goods at higher prices than listed, infringing on the consumer’s interests.
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