Losses due to illegal schemes, loans reach US$8.2 billion in 2011–2021

Palu, C Sulawesi (ANTARA) – Losses from illegal investment schemes and loans involving millions of victims reached 117.4 trillion rupees or approximately $8.2 billion in the decade of 2011- 2021, said the Financial Services Authority (OJK).

According to Wiwit Puspasari, Deputy Head of OJK’s Investment Warning Task Force, losses due to investment schemes and illegal lending were recorded at Rp 68.2 trillion in 2011, 7.9 trillion Rp in 2012 and 0.2 trillion Rp in 2014.

“(They reached) Rp0.3 trillion in 2015, Rp5.4 trillion in 2016, Rp4.4 trillion in 2017, Rp1.4 trillion in 2018, Rp4 trillion in 2019, Rp5.9 trillion in 2020 and Rp2.5 trillion in 2021,” Puspasari said during a meeting on dealing with illegal online loans in Palu, Central Sulawesi on Tuesday.

The reason for the rise of investment schemes and illegal loans in the age of information technology is twofold, she said.

On the author’s side, the ease of creating apps, websites and offering deals via social media, as well as the existence of overseas servers, have greatly increased illegal investments, he said. she noted.

Related News: OJK urges people to report illegal online lenders to the police

Meanwhile, on the side of the victims, people are easily trapped into high interest loans and lack understanding of investing, leading to massive losses, she said.

According to Puspasari, in carrying out their actions, illegal actors usually use various modes such as liking and viewing posts on victims’ social media profiles. They also offer direct sales in the form of member or referral packages, she said.

Some authors even offer to recharge mobile data through level bonuses, she added.

Illegal investment practitioners also use advertising and pyramid schemes such as selling e-books to commit fraud, she pointed out.

Additionally, Ponzi schemes are also used to help others, sell stocks and shop online, she added.

“The public should be aware of the characteristics of an illegal investment. Its characteristics are the promise of unreasonable profits over a short period, bonuses from recruiting new members, the use of community leaders or religious figures to generate interest to invest (in fraudulent schemes),” she added.

Other characteristics of illegal investments are risk-free claims and legal uncertainty, she said. For example, while a co-op or foundation will have an institutional license, it will not hold a commercial license, she added.

Related News: The Government’s Role in Protecting Citizens from Illegal Online Lending

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