OJK warns Indonesians about illegal online lenders

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Padang, West Sumatra (ANTARA) – The Financial Services Authority (OJK) has warned the public not to borrow from illegal financial technology firms because these firms can charge customers high interest rates and potentially harm them.

“The characteristics of illegal online lending services are characterized by high interest rates, unclear credit terms and very easy lending,” said Yusri, chief of the West Sumatra financial regulator, in Padang on Tuesday.

“Other characteristics of illegal online loans are unlimited interest or borrowing costs and the total return including unlimited interest,” he said.

They also fail to include the company’s address on the application or website, exclude contact numbers for complaints, and miscalculate fees, Yusri said.

In addition, the management of such companies also require access to contact lists on cell phones and other personal documents, he added.

“Usually they make offers via SMS, WhatsApp or private communication channels without permission,” he emphasized.

Yusri advised the public to borrow money from companies registered with the Financial Services Authority.

“Borrow according to (your) needs and ability only for productive interests,” he said.

He also stressed the need for the public to understand the benefits, costs, interest rates, terms, fines and risks involved in taking out a loan.

Related news: Ministry blocks 151 unlicensed fintech P2P lenders

Individuals who have already borrowed money from illegal online lenders must repay the loan immediately to avoid increasing the interest burden, he said.

You will also be asked to report such firms to the Investment Alert Task Force, he said. If you have limited repayment ability, your best bet is to apply for credit restructuring in the form of an interest cut, maturity extension and elimination of fines, he added.

He also urged people not to find new loans to pay off old debts if they are unable to pay off the original loan.

If the customers are threatened with unethical means, they must block all contact numbers from which threatening calls are made and notify all contacts on their phones to ignore messages related to the online credit, Yusri said.

As of October 6, 2021, the total number of fintech peer-to-peer lenders registered and licensed with financial services authorities is 106, Yusri said.

By August 2021, the number of lenders offering legal online lending services had reached 749,175, with the number of borrowers reaching 68,414,603, he added.

Total funds disbursed through legal online loan services have reached Rp 249.93 trillion (nearly $ 18 billion) with outstanding debt at Rp. 26.09 trillion (around $ 2 million).

Related news: Government has blocked access to 4,873 illegal fintech content since 2018

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