Consumers in the financial services sector will have greater protection following the issuance of the first ever regulation by the Financial Services Authority (OJK) since its establishment last year.
The regulation announced by the head of the OJK’s board of commissioners Muliaman D. Hadad in Jakarta on Tuesday will provide stronger protection for consumers of financial services, which not only include banking and insurance but also those related to investment activities.
“The regulation is to protect the interests of both consumers in the financial service sector and consumers generally, and at the same time support the growth of the financial services industry and institutions,” Muliaman said.
Muliaman said the regulation set guidelines that had to be followed by financial institutions in providing their services comprising transparency, fairness, confidentiality, reliability, and consumer data safety, as well as a simple, fast and affordable procedure for complaint and dispute resolution.
Other than principles and provisions on consumer protection, the regulation stipulates the need for financial service providers to ensure internal controls, as well as the OJK’s facilitation of consumer complaints and enactment of sanctions.
“The directors of financial service providers are responsible for complying with this regulation, and are obliged to have a reporting and monitoring system to follow up on consumer complaints within a year of the regulation coming into effect,” said Muliaman.
Muliaman added that while the regulation would not come into effect until next year, previous regulations on consumer protection would still be valid so there would be no lapse in protection.
The regulation on consumer protection has been introduced amid growing reports of bogus investment schemes in the country, which have caused losses of billions of rupiah to investors.
OJK commissioner for consumer education and protection Kusumaningtuti Soetiono explained the OJK would facilitate complaint resolution in cases that occurred before and after the issuance of the regulation.
Association of General Insurance Companies (AAUI) spokesman Julian Noor welcomed the regulation, saying that with the new regulation, consumer protection would be more effective because it would be carried out by the OJK all under one roof.
“In order to make it more applicable, the OJK should issue clear-cut guidelines on its implementation,” he said. Obligations such as internal controls, he said, were already in place in general insurance companies, albeit under different names.
Meanwhile, Benny Waworuntu of the Indonesian Life Insurance Association (AAJI) said that the regulation would enable customers to understand their rights and obligations relating to any financial product they might purchase.
“During the transition period, adjustments should be under way, but I believe most companies already implement most of the provisions in the regulation, such as on internal controls as well as systems for
customer complaints,” he said.