Indonesia has stopped 947 illegal business activities of peer to peer (P2P) lending since 2018 - Photo by IMF

JAKARTA (TheInsiderStories) – Indonesia has stopped 947 illegal business activities of peer to peer (P2P) lending since 2018, said chairman of the Investment Alert Task Force at Financial Service Agency (FSA) Tongam L.Tobing a few days ago. He said, based on server detection, most illegal financial technology (FinTech) firms came from Indonesia, United States, Singapore, China and Malaysia.

Last year, the agency has blocked 227 unregistered FinTech P2P lending operating in Indonesia, 155 of which come from China. Total business activities that are alleged to be illegal investments and terminated by FSA during 2019 were 120 entities.

As a result, many people are caught up in ignorant investments. The Investment Alert Task Force noted that the total losses caused by fraudulent investments from 2008 to 2018 worth of Rp88.8 trillion (US$5.25 billion). The biggest losses came from the Pandawa Group Rp3.8 trillion, Dream for Freedom of Rp3.5 trillion, travel umrahs of Rp3 trillion and other cases.

“The motive is to make maximum profits from the public regardless of the rules and regulations. So, they made an application on the site without permission,”  said Tobing.

He continued, borrowing money from illegal FinTech creates a lot of risk. Customers must be prepared to be charged with high interest rates, spread of personal data, unethical collection procedures and unclear and renamed loan addresses.

The high risk of borrowing from illegal FinTech also causes the task force stop their activities, added by Tobing. The form by screening and distributed unlicensed funds, announce the name of the FinTech company to the public, blocked the site, and restricted their financial transactions in banks.

FSA also educates the public to always know the list of registered P2P companies before applying for loans. This list can be seen on the FSA website or you can find out by contacting FSA at 157 call center numbers.

In addition to stopping illegal FinTech activities, the agency also stopped 73 business activities that allegedly carried out business activities without permission from the authorities and potentially harmed the community. The types of business activities that are stopped are 64 unauthorized forex trading activities, five unlicensed money investments, two unlicensed multi-level marketing, one plantation investment and one crypto-currency investment.

Just like illegal FinTech activities, the presence of illegal investment also occurs because of people’ needs. There are still many people who are tempted by high interest or high returns without knowing the legality of companies offering.

US$1: Rp14,200

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