- A general increase in the use of financial technologies (“Fintech”), particularly peer-to-peer (“P2P”) lending schemes, has resulted in a corresponding increase in the number of violations being committed by Fintech companies. A recent report published by Jakarta Legal Aid Institute has revealed that since May 2018, 283 customer complaints have been filed relating to violations which were committed by both illegal and licensed Fintech companies.
- The violations in question ranged from abuse suffered at the hands of debt collectors to sexual abuse and exorbitant interest charged on loans, as well as the inappropriate use of debtor phone numbers, including attempts to collect debts from third parties such as spouses, employers and in-laws. Many of these violations ultimately resulted in customers suffering negative consequences, including dismissal from work, divorce, mental trauma and suicide attempts as a result of their inability to settle their debts.
- As a result of such violations, the general public is being advised to always exercise caution when utilizing any P2P lending services, as many people often do not understand the interest rates and debt collection mechanisms which are used by Fintech companies. This problem is also being worsened by the actions of certain Fintech companies, which include not clearly stating their addresses and phone numbers, as well as changing their names without making any announcements or notifying their customers.
- For more on this story, see Hukumonline: “Jenis-jenis Pelanggaran Hukum di Industri Fintech”.
- For further analysis of Fintech-related matters, see ILB No. 3434 and ILD No. 573.
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