“Ting,” a short message, or text message, ringing on Antara’s cell phone turned out to be an offer to lend money.
Most people often receive messages from unknown phone numbers that have great deals.
âWe are offering Rp 5-500 million with simple requirements. Contact us via WA 081XXXXXXXXX,â according to an SMS offer received on Antara’s cell phone.
Some loan offers offer attractive facilities, such as quick and easy processing, even without collateral.
However, with the high volume of incoming SMS having similar content, cell phone users sometimes become “lazy” to open short messages.
People unfamiliar with communication technologies and oblivious to the legal aspect can easily be fooled by such offers.
It should be noted that online loan companies are not entirely illegal. Loan companies must be registered with the Financial Services Authority (OJK) as an official legal entity.
Related News: Financial Literacy is Needed to Reduce Cases of Illegal Online Lending
According to the OJK, as of August 31, 2021, there were 68.41 million official online loan borrowers, with a total national value of Rp 249.938 billion.
In addition, up to 106 peer-to-peer financial technology companies are registered and licensed with the authority until October 6, 2021.
The public should remain vigilant and careful while using the loan services. The consumer must pay attention to the legality of companies.
Indonesian President Joko Widodo (Jokowi) also highlighted the dangers of going for illegal online lending.
“I heard that the lower class people, who took out illegal online loans, were deceived and faced with high interest rates,” Jokowi noted in his remarks on the occasion. of the Virtual Innovation Day 2021 held here on Monday, October 11.
The head of state noted that the development of financial technology should be accompanied to develop a better economy for Indonesia.
Jokowi called on the OJK and financial technology companies to ensure a balanced diffusion of financial and digital literacy among the population in order to encourage inclusive economic growth.
“Financial inclusion should provide wider access to the population, especially the lower middle class, as a solution to reduce social inequalities and reach out to society that has not benefited from the services of the conventional financial system”, Jokowi said.
Illegal loan trap
The OJK noted that people’s need for easy loans is a factor behind the spread of illegal online lending.
Besides the urgent need due to financial hardship, other factors that push people to use illegal online loans include the lack of financial knowledge of community members.
The ease of downloading applications and sites on the Internet or the cell phone operating system is also misused by the illegal lender.
The OJK said it has stopped thousands of loan transactions since 2018.
At least 404 illegal loans were canceled in 2018. At the same time, 1,493 illegal loans were also closed in 2019.
In 2020 and up to October 2021, some 1,026 and 593 unrecorded loans were forgiven.
The authority suspended 3,516 parties involved in illegal loans in four years.
The authority also received a total of 19,711 complaints from individuals regarding illegal loans. Some 47.03 percent were serious violations, while 52.97 percent were moderate to minor violations.
Critical violations include disbursement without consent, threat of dissemination of personal data, and intimidation of all contacts on borrowers’ cell phones.
Worse yet, debt collection was carried out with harsh words and even to the point of sexual harassment.
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Avoid illegal loans
People can recognize the characteristics of illegal lenders, such as often setting high interest rates, high fees, unlimited fines, and intimidating borrowers.
People looking for loans should understand the legality of borrowing money only from registered and licensed lenders.
To check the legality of lenders online, people can contact 157 or message through WhatsApp app on 081157157157.
People can also check it by email at [email protected]
The OJK also presents a list of official loan companies that have received permits on the website www.ojk.go.id.
Moreover, people have to install official loan application on their cell phone through official provider.
Law enforcement officials and the government moved swiftly to deal with cases of illegal online lending that trapped several people.
Indonesian Police Special Economic Crimes Director Brigadier General Helmy Santika said illegal loan investigations have different characteristics as the cases involve various criminal acts.
Police received 371 reports related to illegal loans from 2020 to 2021.
Of this figure, up to 91 cases have been revealed, eight cases are entering the trial stage, while the rest are under investigation.
âThe police assess cases of illegal loans derived from blasting SMS and intimidation to severe collection cases and not just financial loans,â Helmy added.
Police urged people to beware of lenders, who offer quick financial loans with easy requirements.
Several regulations that can be violated in illegal lending cases range from consumer protection law to trade law and pornography law.
The Coordinating Minister of Political, Legal and Security Affairs, Mahfud MD, noted that criminal and civil law actions can be applied to cases of illegal loans.
To protect the public, the government will also institute a moratorium on licensing for online loan providers.
The OJK also urged to impose a moratorium on FinTech licensing for online lending companies.
Meanwhile, the Ministry of Communication and Information Technology will proceed with a moratorium on issuing electronic system operators for new loan service requests.
“The government will take firm action to free the digital space from illegal and unregistered lending practices, as they have serious consequences,” said Minister of Communications and Information Johnny G. Plate.
The rapid response of law enforcement and the moratorium should nip the problem of SMS “bogus” loan offers in the bud.
More importantly, others will not be deceived and trapped by illegal online loans which are expensive.
People need to take preventative action by improving literacy on digital apps and the legality of lending companies.
Maturity and prudence in using digital devices and managing finances are crucial to avoid the trap of illegal lending.
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