There have been several disturbing stories highlighting highly unethical and downright criminal behavior by debt collectors working for unlicensed fintech firms in Indonesia over the last couple of years. The issue is catching the nation’s attention again following a police report filed by a woman who allegedly suffered an especially shocking experience.
According to reports, a woman from Solo, Central Java, who has been identified by her initials YI, has had a photo of herself spread on social media after she failed to pay back money she borrowed from an online lender called Incash. The photo came with the disturbing caption, “I am ready to be shared around to pay my debt to Incash. Satisfaction guaranteed”.
When filing her police report for defamation against Incash, YI confirmed to the media that she had borrowed money from the online lender.
“I borrowed IDR1,000,000 (US$71.50) but I received IDR680,000. In a week I had to pay back IDR1,054,000. I was late by two days and then they spread my photo,” she said, as quoted by Kompas.
The Solo Police say they have launched an investigation based on YI’s complaint, and will begin with questioning witnesses. It’s not yet clear who runs Incash or where the firm is based.
The Financial Services Authority (OJK) says that Incash is not a registered fintech firm with the regulatory body, and is therefore an illegal money lender.
The Solo Raya Legal Aid Foundation (LBH Solo Raya), who is giving YI legal aid for her case, says that YI downloaded Incash’s app from a link she received in a text message. Incash is not available on Google’s Play Store nor Apple’s App Store.
By November of last year, the Information and Communications Ministry (Kominfo) had blocked access to 341 peer-to-peer (P2P) lending apps that were not regulated by OJK in a bid to prevent unethical lending practices. Since only a handful of them are registered to OJK, there were still many unregistered and questionable P2P apps that allegedly employ unethical, and downright abusive, debt collecting methods.
The Jakarta Legal Aid Foundation (LBH Jakarta) said some of the reports they received about abusive debt collecting by P2P lenders include one in which collectors forced a woman to strip naked and dance on top of a train track to pay off her debt, as well as one case in which threats were made against a debtor’s life.
In February of this year, a taxi driver committed suicide and left a note blaming his death on online loan sharks.
As of May 2019, 113 P2P lenders (out of hundreds more that are available online) have been officially registered with the OJK, the list of which you can see here.
