The role of government in protecting citizens from illegal online lending


The community has recently become aware of the practice of illegal online lending. Some people mistakenly thought that online loans from financial technology (fintech) companies could help solve their financial problems. However, on the contrary, the illegal practice of online lending actually harms the company by insulting and threatening it.

These individuals behind the practice of illegal lending often operate under the guise of cooperative legal entities to persuade people facing financial difficulties.

As a result, various social issues arise in the community. Some depressed victims cannot bear the pressure of debt collectors and ultimately decide to kill themselves.

To this end, government help is needed to protect the community from the threats and dangers of illegal online lending.

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The Indonesian National Police (Polri) had also said earlier that the trend of illegal lending was very damaging to the community.

The head of Polri’s public relations division, Inspector General Dedi Prasetya, said police paid special attention to the illegal mode of online loan collection which was often carried out under threat.

They also manipulated the photos of the clients to make them appear inappropriate and were then distributed to the client’s colleagues and family as a threat for them to pay off their debt immediately.

Clients often became stressed, sick and also committed suicide because they could not handle the pressure, Prasetya said.

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Taking action against the threat of illegal online lending is a form of assertion and victim protection on the part of the government, especially the police.

Brigadier General Whisnu Hermawan Februanto, Director of Crime Control of the Criminal Investigation Department of the National Police (Bareskrim), pointed out that a foreign national called WJ, aka JHN, was involved in the loan case. illegal.

Through the payment gateway company called Flinpay and the condominium cooperative called Inovasi Milik Bersama, the suspect recruited illegal lenders and established illegal savings and credit unions.

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Police report

Financial Services Authority (OJK) Investment Oversight Task Force Leader Tonggam L. Tobing noted that currently 104 fintech companies have 772,534 accounts, with a total unpaid distribution of 26 098 trillion rupees.

Tobing claimed the high number of online loan companies was due to easy access to the website as police struggled to root them out because they had multiple servers stationed in foreign countries.

From the point of view of the victims, the rise of illegal loans is due to their ignorance of the legality of companies and their pressing financial needs.

Since 2018, the task force had terminated 3,631 illegal online loans. Tobing revealed the characteristics of illegal loans, such as no official license, no management identity, and a clear office address, providing an easy loan process that only required an ID card, a photo of the borrower and an account number.

Illegal online lending also does not give clear information about the cost of borrowing and the penalty. Businesses also had access to customers’ phones.

To this end, Tobing has provided tips for managing loans online. He urged people to only borrow money from financial technology companies registered in OJK and borrow according to their needs and abilities as well as production goals.

For those already facing online loans, Tobing suggested reporting the issues via email to [email protected] People in debt with online loans are not suggested to find a new loan to pay off their past debt.

People who have received inappropriate threats from a debt collector can block the number from which the threats were sent and instruct all their contacts to ignore messages regarding their debt. It was also suggested to report the number of the debt collector to the police.

Social Observer Dr Devie Rahmawati noted that the reason people use illegal online loans is due to their increased needs with low income, excessive consumption of digital society, as well as their neglect and neglect. poor financial knowledge.

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The deletion of the registration number of the cooperative

Due to several illegal lending practices under cooperative names, the Ministry of Cooperatives and Micro, Small and Medium Enterprises (MSME) would remove and revoke the Cooperative Registration Number (NIK) owned by the Savings Cooperative and bank who was practicing illegal online lending.

Cooperatives assistant at the Ministry of Cooperatives and MSMEs, Ahmad Zabadi, said his side had made serious efforts to tackle the existence of illegal online lending practices that used the savings and credit cooperative as a pretext.

These illegal practices can tarnish the positive image of cooperatives and reduce the level of public trust in cooperatives in Indonesia.

In addition, the Ministry of Cooperatives and MSMEs had held a meeting with the Central Council of the Association of Indonesian Notaries (PP-INI) not to immediately issue an act of cooperation without clear verification.

This effort follows several notaries who authorized the Savings and Credit Cooperative deed which was then used for illegal online lending practices.Related news: DPD president expresses support for police crackdown on illegal lending

A notary was able to authorize eight to 40 deeds of incorporation from 2020 to 2021.

The Ministry of Communications and Informatics had also sent a letter to the General Directorate of Computer Applications to adjust the new requirements for the savings and credit cooperative which had a license as an electronic system operator (PSE). .

This is in accordance with the regulation of the Minister of Communication and Informatics number 5 of 2020 on the private scope of operators of electronic systems. The new regulations required co-ops to complete the permit if they planned to operate as an ESP.

As provided for in Article 104, paragraph (2) of the Regulation of the Minister of Cooperatives and MSMEs No. 9 of 2018 on the organization and development of cooperatives, it states that “cooperatives which organize savings and credit are required to have a savings and loan fund. commercial loan license issued by an authorized official “.

Zabadi and his team had checked out the One Office Building in South Jakarta used by around 20 savings and credit unions that conduct illegal online lending business practices. His team also dispatched a team to research several virtual office buildings used by other savings and credit unions.

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His team had also investigated the Space Inc building in West Jakarta and the Thamrin City building in central Jakarta.

The two locations have been used as virtual office addresses by seven savings and credit unions that have conducted illegal online lending business practices.

Based on the results of the team’s survey of the location, information was obtained that some co-ops had indeed rented a virtual office at this address but had not extended the rental period.

In addition, several illegal online loan companies were using fake addresses as offices.

Such facts call on the government to act to protect its people from the threat of illegal online lending.

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