An employer is aware that their employees are lying to customers of the company for their own personal financial gain. Is that against the law? If an employer is aware and continues to let the employees do so.

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    If you want a sensible answer, you will have to include the jurisdiction. – Tim Lymington Aug 13 '19 at 8:06
  • @TimLymington Fraud is bad regardless of the jurisdiction. The problem I see with the OP's question is the lack of context, since it is impossible to conjecture whether the employees' lies amount to fraud or akin torts whereby unlawful harm is inflicted on customers or third parties. – Iñaki Viggers Aug 13 '19 at 10:53

If the lies amount to fraud, and if the company also benefits from the fraud, the company might be held to be a party to the fraud. Even if the company does not benefit, the company, or more likely the responsible executives who had actual knowledge of the fraud, might be held to be accomplices in the fraud, if the fraud is treated as a criminal matter. Most fraud, of course, is treated as a tort, not a crime.

A lie would only constitute fraud if it was:

  • Intentional: the person telling the lie knew that it was false, intended it to be believed, and to affect the target's decisions;
  • Materiel: a reasonable person would be significantly influenced in whether to take an action by the content of the false statement;
  • Damaging: actual harm occurred as a result to the person defrauded relying on the false statement; and
  • Reasonable: it was reasonable for the target of the false statement to accept it and rely on it. If the statement was implausible, or if any reasonable person would check it, it is not reasonable to rely on it.

Only if all of those are proved in court will a lie be treated as a fraud.

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So I’m a car salesman. Customer comes and says he’s a Man United fan and would never buy a car from someone who isn’t a fan as well. I lie by saying I’m a fan as well, I sell the car and make personal gain in form of a commission. Absolutely legal.

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    Dubiously legal (by the definition of fraud) and not really what OP was asking about; if your manager overhears you, should he (according to the law) stop you? – Tim Lymington Aug 13 '19 at 16:16

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