Online trading is a minefield. Recruited by international trading companies such as Binomo or Quotex, finance personalities like Dony Salmanan and Indra Kenz entice people to make yes-or-no bets on asset prices. They refer to this as high-risk investing. In fact, it is closely akin to gambling, a de facto illegal activity in Indonesia.

As in gambling, only “the house” is guaranteed a win; many victims lose significantly. The Financial Services Authority (OJK) has responded by clamping down on what it calls online trading fraud.

That is a limited response to a major social and cultural challenge. For good reason, Indonesia’s digitalized, high-risk financial gambles are greeted by its victims as salvation for the poor and the aspiring. National leaders have long touted digital transformation as both inevitable and destined to solve everything from corruption and poverty to natural disasters.

This is what technology scholar David Nye called the “technological sublime,” an imagined world where technology carries within itself a kind of irresistible physical, moral and intellectual power. It cannot go wrong.

Technological reality, however, is more complex. On the one hand, digital technology represents objectivity and fairness. The fact that it works through a series of binary codes and numbers gives people the sense that it is precise and truthful. On the other hand, sophisticated algorithms and aggregate processing at super speed means that the technology is steadily moving beyond our capabilities to really understand it. There is constant oscillation between how dynamically compelling and how inscrutable digital data is.

This dual reality shows us where victims of online trading scams live—on the line between reason and faith. Authoritative voices invite and expect Indonesians to trust a digital world that includes a rapidly changing financial infrastructure featuring such novelties as e-money, online banking, crypto and PayLater.

That infrastructure, however, is increasingly complex and it supports an ecosystem of companies subject to minimal regulation. Enter online trading scams misperceived as investing in utopian possibility.

Under the sway of the technological sublime, Indonesians from all walks of life reject authorities’ warnings about financial risks and instead embrace promises of exciting market disruptions and social mobility. This ignores just about everything we are discovering about our increasingly complicated global financial system.

Online trading fraud brings to the surface the critical question of who must or, indeed, who can bear the transaction costs of the digital utopia when it fails. That calls for social and cultural, as much as economic analysis.

The OJK’s 2021 survey shows the majority of Indonesians do not understand basic financial principles, a condition that it refers to as financial illiteracy. Financial literacy is defined as the knowledge, skills and confidence in making better financial decisions to obtain prosperity. This association of prosperity with reading-related skills is important because it suggests that individuals can learn their way into wealth or out of population-wide financial failure.

Unfortunately, the specialized vocabulary, narrow skill set and necessary preexisting knowledge laid out by financial experts are not very inclusive of the very people that are in need of financial literacy. Combine that with the algorithmic revolution in fintech, comprehensive understanding about personal finance becomes even more unattainable.

Knowledge about how the digital financial system works is a black box even for software engineers and financial professionals, let alone the general public. Yet, as experts point out how illegible the system is becoming, policy makers continue pushing literacy as the ultimate key to unlocking better personal financial outcomes.

The fact of the matter is that there is very little that even extremely financially literate individuals can do to protect themselves against massively orchestrated international fraud. Even the major financial minds of Indonesia were powerless in the face of the Jiwasraya insurance fraud scandal, the largest state losses in the country’s history, which showed that Indonesia’s capital market is still not a safe place for local and international investors.

Furthermore, the opacity of financial networks and systems is intensified by the status of internet service providers’ (ISP) terms of service or acceptable use policies. Laying out conditions for user access to the internet, these contract-like agreements are becoming de facto law for internet communication in Indonesia. They stand awkwardly at an uncertain intersection between contract, criminal and civil law.

Their bottom-line message is that users have liability regardless of their intentions, while ISPs have no liability. Many people, including policymakers, believe that ISP agreements may disregard constitutional standards for freedom of expression, privacy and exploitative and abusive treatment. Even I, a media studies scholar with a PhD, do not fully comprehend the rights and liabilities of my basic digital financial technologies.

To many Indonesian users like myself, clicking “yes” on an ISP’s terms of service, means potentially foregoing our rights to any litigation against the ISP, regardless of the legality of their practices.

If the state is to continue encouraging people to conduct financial transactions with ease using digital technology, it has to provide robust legal and financial protections. Literacy is indeed important but it should not be the public’s only defense against financial devastation.

The government should focus its resources on implementing a more robust monitoring, audit, warning, as well as enforcement, system in place against these potentially fraudulent fintech practices.

And when the use of a new digital fintech leads to an event of catastrophic financial failure, the state should guarantee a certain amount of asset recovery to be easily accessible to victims in need.

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The writer is digital policy manager at Remotivi. The views expressed are her own.