Forging Documents to Borrow Money from Banks – What Are the Legal Liabilities?

I. COMMON FORMS OF DOCUMENT FORGERY IN BANK LOANS TODAY

According to records from procedural authorities and credit institutions, the act of forging bank loan documents currently takes place in highly sophisticated ways through various methods and tricks. These can be categorized into the following three main groups:

1.1. Forging Personal Identification Documents

Perpetrators use sophisticated printing, cutting, and editing technologies to forge Citizen Identity Cards (CIC/CCCD), Household Registration Books, or Certificates of Marital Status. The purpose is to misrepresent another person's personal information to conceal bad credit history on the Credit Information Center (CIC) system, or to use the information of deceased or non-existent persons to borrow money and default on the debt.

1.2. Forging Financial Capacity Documentation

For unsecured loans, banks require customers to prove a stable income. Perpetrators often forge Labor Contracts, Payslips, Appointment Decisions, or Income Verification Statements bearing fake corporate seals, or even alter balance fluctuations on Bank Account Statements. In many cases, "shell companies" are established solely to sign fake labor contracts and certify abnormally high salaries for borrowers.

1.3. Forging Collateral Asset Documents

This is the most dangerous form, usually applied to high-value collateralized loans worth up to billions of VND. Common tactics include forging Certificates of Land Use Rights and Ownership of Houses (Red Books / Pink Books), Automobile Registration Certificates (Vehicle Logbooks), or Business Registration Certificates. Perpetrators may completely forge the official document forms issued by state agencies or use genuine forms with superimposed fake information, seals, and signatures.

II. CRIMINAL LIABILITY FOR FORGING LOAN DOCUMENTS

Forging documents to borrow money from a bank is not merely a civil transaction violation; it constitutes dangerous offenses defined under the 2015 Penal Code (amended and supplemented in 2017). Depending on the motive, purpose, course of action, and resulting consequences, the violator may be prosecuted for criminal liability under one or both of the following offenses:

2.1. Crime of Forging Seals or Documents of Agencies or Organizations; Crime of Using Fake Seals or Documents of Agencies or Organizations (Article 341 of the Penal Code)

Pursuant to Article 341 of the 2015 Penal Code, anyone who forges seals, documents, or other papers of an agency or organization, or uses such fake seals, documents, or papers to commit illegal acts shall be held criminally liable.

• Constituent Elements of the Crime: It only requires the violator to perform the act of "forging" (printing or creating fake documents themselves) or "using" (knowing they are fake documents but still submitting them to the bank) to complete a loan file. Theoretically, the crime is completed at this point without requiring the bank to disburse the funds.

• Penalties: The basic penalty frame ranges from a fine of VND 30,000,000 to VND 100,000,000, non-custodial reform for up to 03 years, or imprisonment from 06 months to 02 years. In cases involving organized crime, forging 06 or more documents, or making illegal profits of VND 50,000,000 or more, the prison sentence may be up to 07 years.

2.2. Crime of Obtaining Property by Fraud (Article 174 of the Penal Code)

If the violator uses fake documents as a fraudulent trick to deceive the bank into believing the application is genuine, thereby approving and disbursing funds, and subsequently appropriates the money upon receipt (refusing to repay, fleeing, or using it for illegal purposes), the act constitutes the Crime of Obtaining Property by Fraud under Article 174 of the Penal Code.

• Core Constituent Elements: The combination of "fraudulent tricks" (using fake documents) and the "intent to appropriate property" (taking money from the bank).

• Severe Penalties: The lowest penalty frame is non-custodial reform for up to 03 years or imprisonment from 06 months to 03 years (for appropriated property valued from 2 million to under 50 million VND). However, because bank loans are typically large in value, penalties escalate rapidly:

  • Appropriating from 50 million to under 200 million VND: Imprisonment from 02 years to 07 years.

  • Appropriating from 200 million to under 500 million VND: Imprisonment from 07 years to 15 years.

  • Appropriating from 500 million VND or more: Imprisonment from 12 years to 20 years or Life Imprisonment.

2.3. Legal Relationship and Processing Principles for Multiple Offenses

An important legal question arises: How will a person be handled when they both forge/use fake documents and appropriate loan money from a bank?

According to criminal trial practice and Joint Circulars issued by the Supreme People's Court, the Supreme People's Procuracy, and the Ministry of Public Security:

1. If the act of forging/using fake documents serves solely as a means or tactic to achieve the single objective of appropriating the bank's money, and the offender has obtained disbursement and appropriated the funds: The court will generally prosecute for criminal liability under the Crime of Obtaining Property by Fraud (Article 174), wherein the use of fake documents is considered the fraudulent method constituting the crime.

2. If the offender independently commits the act of forging documents and subsequently uses them to commit fraud, or uses multiple fake documents for various distinct purposes: The procedural authorities may prosecute for criminal liability under two independent counts: the Crime of Forging Seals or Documents of Agencies or Organizations (Article 341) and the Crime of Obtaining Property by Fraud (Article 174). In such cases, the court will aggregate the penalties pursuant to Article 55 of the Penal Code.

III. CIVIL LIABILITY AND ADMINISTRATIVE SANCTIONS

3.1. Civil Legal Consequences and Invalid Credit Contracts

In addition to criminal liability, forging loan documents incurs severe legal consequences under the 2015 Civil Code:

• Credit Contract Declared Invalid Due to Deceit: Pursuant to Article 127 of the 2015 Civil Code, when a party enters into a civil transaction as a result of deceit (use of fraudulent information or documents), that transaction is invalid. The bank reserves the right to request the Court to declare the Credit Contract and Mortgage Contract (if any) invalid in their entirety.

• Restitution and Compensation for Damages: Under Article 131 of the 2015 Civil Code, upon an invalid civil transaction, the parties must restore matters to their original state and return to each other what they have received. The borrower must immediately repay the entire outstanding principal to the bank. Simultaneously, the at-fault party causing damage (the user of fake documents) must compensate for all actual damages incurred (including agreed interest, valuation fees, litigation costs, etc.).

3.2. Administrative Sanctions

If a violator stops at the act of forging or using fake documents to submit an application, but is detected in time by the bank before funds are disbursed (thus causing no financial loss), and the act does not fully constitute a criminal offense (or is minor in nature), administrative fines will apply:

• Under Decree 88/2019/ND-CP (amended by Decree 143/2021/ND-CP): Providing false information or documentation to borrow capital from credit institutions may result in a fine ranging from VND 10,000,000 to VND 20,000,000 for individuals.

• Under Decree 282/2025/ND-CP: Using fake documents or papers to perform administrative procedures or transactions may result in a fine ranging from VND 2,000,000 to VND 4,000,000, along with the confiscation of the forged documents.

IV. PRACTICAL EXAMPLES AND CASE LAW ILLUSTRATIONS

To help readers better understand how procedural authorities handle such cases in practice, below are two typical examples based on real cases tried by the People's Court:

• Example 1: Mortgaging a Fake Red Book to Borrow 3 Billion VND at a Bank

  • Case Developments: Nguyen Van A (residing in Ho Chi Minh City), having suffered business losses, ordered a fake Land Use Rights Certificate (fake Red Book) in his name via social media for a fee of 15 million VND. A then brought this fake Red Book to Commercial Joint Stock Bank B to apply for a mortgage loan of 3,000,000,000 VND.

  • Detection and Handling: Bank B conducted verification with the Land Registration Office and discovered the Red Book was fake. The bank reported the matter to the Police Investigation Agency, which subsequently initiated criminal proceedings.

  • Court Verdict: Although A had not yet received the disbursed funds (the fraud was incomplete), A's actions constituted "Obtaining Property by Fraud" (at the uncompleted stage under Article 15 and Article 174 of the Penal Code) and "Forging or Using Seals/Documents of Agencies or Organizations" (Article 341 of the Penal Code). The Court sentenced Nguyen Van A to a total of 08 years in prison for both offenses.

• Example 2: Forging Payslips and Labor Contracts for Consumer Unsecured Loans

  • Case Developments: Tran Thi B was a freelance worker without a stable income. B contacted an online broker to purchase a fake dossier containing: a Labor Contract certifying B as the Sales Manager of Company X, and a Payslip bearing a fake corporate seal indicating a salary of 25 million VND/month. B submitted this dossier to apply for unsecured loans at 03 different banks/finance companies and received a total disbursement of 250,000,000 VND.

  • Consequences: After receiving the money, B spent it on personal expenses, paid interest for only 2 months, and then cut off contact and absconded.

  • Criminal Judgment: Upon arrest, the Court determined that B used fraudulent tactics to appropriate 250 million VND. B was sentenced to 07 years and 06 months in prison for "Obtaining Property by Fraud" (under Clause 3, Article 174 of the Penal Code) and was ordered to fully repay the principal debt and interest to the credit institutions.

V. LEGAL WARNINGS AND PREVENTIVE RECOMMENDATIONS

5.1. Advice for Citizens and Loan Applicants

1. Never listen to financial brokers or "middlemen" offering promises to forge payslips, forge Red Books, or guarantee "100% approval." When discovered, the person whose name appears on the loan application will be the primary party held criminally responsible.

2. Be honest in information provision: Honestly provide complete and accurate personal financial records. If unqualified for a bank loan, citizens should seek other official credit channels or adjust loan amounts to match their actual capability, rather than engaging in illegal acts.

3. Protect personal data privacy: Exercise caution in safeguarding personal documents (CIC/CCCD, Household Registration Books). Do not share images of identity documents on social media or hand them over to unknown individuals to prevent them from being exploited for fraudulent loan applications.

5.2. Recommendations for Credit Institutions

1. Enhance verification processes: Strengthen field verifications for loan files and cross-reference chip-based Citizen Identity Card data with the National Population Database under the Ministry of Public Security.

2. Apply anti-fraud technologies: Implement advanced AI and OCR technologies to detect signs of editing or tampering in image or PDF documents; connect with tax and Social Insurance (BHXH) databases to verify applicants' actual income.

VI. CONCLUSION

Forging documents to borrow money from banks is not a mere "loophole exploitation" or a routine civil transaction; it is a severe violation of the law that is strongly condemned by society and punished by the legal system. Vietnam's legal system has established rigorous sanctions—ranging from administrative fines and civil invalidation of transactions to severe criminal sentences of up to 20 years or life imprisonment.

Every individual must raise their legal awareness and stay alert against loan brokerage traps. Honesty and legal compliance serve as the strongest shield protecting personal and family legal safety in all financial dealings.