Indonesia Crack Down on Illegal Online Loan Sharks: Victims Urged to Stop Paying Debts

Coordinating Minister for Political, Legal and Security Affairs, Mahfud MD, asked victims of illegal online loans to not pay their debts. 

"To those who became victims (of illegal online loan), don't pay," Mahfud said in a press conference his office in Jakarta, Tuesday (19/10/2021), responding to the people who fell victim to illegal online loan schemes. as quoted from Antara News. 

Online lending is familiarly referred as 'pinjol' (pinjaman online) in Indonesia.

Indonesian Police busted various illegal online lending. (Photo: Police doc.)

Mahfud added that if victims of illegal online credit are terrorized for not paying their debts, then they can report the incident to the nearest police station.

"If you don't pay and someone doesn't accept it, then (you are) terrorized, reports it to the nearest police station. The police will provide protection," said the minister.

Mahfud stated that illegal online lending doesn't meet the requirements of civil law so that it can be canceled. 

He emphasized that criminal and civil law action will be applied to illegal online lenders. He hoped that financial technology (fintech) peer to peer lending companies that already have a license from the Financial Services Authority (OJK) or legal lenders can grow unimpeded as a result.

"We mentioned the possibility of using Article 368 of the Criminal Code, namely extortion. Then there is Article 335 of the Criminal Code on Unpleasant Acts that can be used. Then, the Consumer Protection Law, Article 29 of the ITE Law and Article 32 paragraphs 2 and 3," explained Mahfud.

Quoted from Detik, OJK stated in its Instagram account that there are several factors that make illegal loans still rampant. It stated that the process of uploading illegal applications, sites or websites are far too easy.

"The eradication is difficult because many server locations are placed abroad," it wrote, quoted on Saturday (16/10/2021).

Moreover, literacy regarding money lending is still relatively low. Borrowers are still not checking the legality of the lenders. There is limited understanding of loans. In addition, there is also an urgent need due to financial difficulties.

From OJK data for the 2019-2021 period, the number of complaints related to online loan is 19,711. The complaints consist of  9,270 serious violations and 10,441 minor or moderate violations.

Forms of complaints with serious violations include disbursement without the applicant's consent and threats of sensitive personal data dissemination.

Fake Pornographic Photo to Intimidate Customers

Quoted from Kompas, an illegal online credit collector with the initials of AKA (26)  tells how the intimidation process works at the Central Java Police Headquarters, Tuesday (19/10/2021).

AKA has been working at the loan collection office in the Tegalrejo area, Yogyakarta City, for six months. During the collection process, AKA will contact customers continuously to pay their debts.

 If not paid immediately, she will also call the emergency contact number listed by the customer. Not only that, she also edited customers photos, juxtaposed with pornographic photos, to be used as threats.

Furthermore, if the customer still does not pay, she will continue to  terrorize the customer.

If again there is no response, then the victim's edited pornographic photo will be distributed. "The picture is (sent) to the customer first, then to the emergency contact," she said.

West Java Police Arrested the Boss Who Controlled 23 Illegal Loan Applications 

On Teusday (19/10/2021, the Directorate of Special Criminal Investigation of the West Java Police arrested a man with the initials RSO  who played the role of senior manager who controls of 23 illegal online loan applications (pinjol). The illegal company was previously revealed to be operating in Yogyakarta.

As reported by CNN Indonesia, a total of 86 people were arrested in a raid operation targeting an office of an illegal online loan company in Samirono, Caturtunggal, Depok, Sleman, Yogyakarta, on Thursday (14/10/2021).

The raid was initiated as a result of a report from a victim with the initials TM to the West Java Police. The the victim is being treated at the hospital because TM feels depressed by the inhumane suppression of the online loan.

From TM's report, the officers were immediately able to trace the location of the company. Together with the Yogyakarta Regional Police, a team from the West Java Regional Police went to the location and carried out the raid. Out of the 86 people arrested, seven becomes suspects.

From Antara News, Director of the Special Criminal Investigation of West Java Police, Kombes Pol Arif Rachman, said that RSO, who has now been named a suspect, has has a higher position than the other seven suspects who have been detained previously. 

Various raids and arrests in various places have been carried out by Indonesian Police since last week.

For instances, an illegal online loan syndicate was raided by the Central Jakarta Metro Police Satreskrim at a shophouse in Cengkareng, West Jakarta (13/10/2021). The syndicate has ensnared 5,700 customers through social media.

On Monday (18/10/2021), investigators from the Special Criminal Investigation Directorate of the Metro Jaya Police arrested four employees when they raided an illegal online loan office of PT AIC in Kelapa Gading, North Jakarta. During the raid, police officers also caught the company processing immoral photos to intimidate debtors. 

On Saturday (16/10/2021), West Kalimantan Police raided an online loan office  of PT SRD in Pontianak. At that location, the police arrested 14 employees.

Online Lenders to Attach Proof of License from OJK to Enter Play Store and App Store

The Ministry of Communications and Informatics to cooperate with Google and Apple to combat illegal online credit that is rampant in Indonesia.  

Minister of Communications and Informatics, Johnny G Plate, said this was a firm action from the government, the Financial Services Authority (OJK) and Bank Indonesia (BI) to address the issue of illegal lending.  

"We have communicated with Google and Apple so that there is enforcement of the electronic system in the Playstore and Appstore. So (pinjol) that wants to be uploaded must be accompanied by evidence and a license issued by the OJK," he said at a press conference, Tuesday (19/10/2021), as quoted from Detik..