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Fintech companies need strict law to protect consumers, ensure fair business
A strict law is needed to cover wider aspects of the online lending business, such as capital and the mechanism by which investors channel their funds.
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An employee checks the identity card of a customer at peer-to-peer lending start-up PinjamDuit in Gading Serpong, Tangerang, Banten.
(The Jakarta Post/R. Berto Wedhatama)
I
ndonesia’s growing financial technology (fintech) companies have called on the government and legislators to issue a new law to ensure fair business for and better protection of both the industry and consumers.
The Indonesian Fintech Lenders Association (AFPI) said that fintech companies, especially those involved in peer-to-peer (P2P) lending or online lending, needed a stricter regulation to ensure that all the stakeholders, such as borrowers and investors, would receive better protection.
“Fintech law should, among other things, cover personal data protection and set limits and boundaries during an appraisal of someone’s credit worthiness. A meticulous assessment should minimize default loans,” AFPI’s spokesperson, Tumbur Pardede, said during an AFPI event in Kebayoran Baru, South Jakarta on Oct. 15.
According to him, now is the right moment for the government to step in and monitor the rapidly growing online lending business amid the increasing number of illegal fintech companies that have used unethical methods to extort payment.
“There are laws for banking, insurance and the stock market. I think it’s time to create one for fintech lending as millions of people have been investing,” said Tumbur.
Previously, Legal Aid Institute (YLBHI) branches on Java received hundreds of complaints from borrowers who had their personal data breached by P2P companies that were not registered with the Financial Services Authority (OJK).
According to some female borrowers, their personal data and pictures were shown in pop-up advertisements online claiming to offer sexual favors in exchange for money to pay off their debts.
