The Indonesian government continues its efforts to combat the increasingly sophisticated and prevalent digital financial crimes.
The advancement of information technology has led to innovation and the growth of digital-based economies. This technological revolution has impacted Indonesia and nations worldwide.
However, the rise of digital-based economies has not only brought positive impacts but also led to the proliferation of digital crimes.
The story of Tri Sutriawan, a retired employee of a private bank in Jakarta, serves as a lesson for the public, urging caution against various forms of digital financial fraud.
Tri, a retired bank employee, received a pension of Rp500 million ($34,000) in January 2023. To ensure its safety, he distributed the pension across multiple accounts.
The issue arose when Tri was on a bus in Jakarta and received a WhatsApp message from an unknown number. Without careful examination, he immediately opened the message and read its contents.
In the message, Tri was instructed to respond with either agreement or disagreement regarding changes in transaction fees. Assuming it was related to his bank funds, he answered the provided questions without much consideration.
Unfortunately, answering those questions opened a Pandora’s box. His personal information scattered across the digital realm, allowing the scammer to gain access to Tri’s bank account.
In a matter of seconds, a significant portion of his pension funds, valued at Rp150 million ($10,000), vanished without a trace. Tri was left to realize his mistake as the result of a momentary lapse in judgment. The money earned through decades of hard work disappeared within seconds.
Even his last effort to contact the bank where he stored his funds proved futile. “Please be cautious of scamming methods,” warned a customer service representative from the bank.
Responding to this case, Frederica Widyasari Dewi, the Executive Head of the Center for Education and Consumer Protection at the Financial Services Authority (PEPK OJK), emphasized that victims of such digital financial crimes are numerous. “Digital crimes are becoming more rampant,” she said during the Forum Merdeka Barat 9 event on August 21, 2023, which discussed ‘Fighting Digital-Based Financial Crimes.’
Frederica Widyasari Dewi, often referred to as Kiki, explained that through the Financial Alert Task Force (Satgas Waspada Investasi), the Indonesian government has halted 6,895 entities involved in illegal investments, illegal online lending, and illegal pawn activities since 2017 until August 3, 2023.
The extraordinary losses incurred by society due to these illegal investment entities reached Rp139.03 trillion ($9.5 billion) during the same period. What are the consequences for those engaging in such activities and causing harm to the public? The Law on Strengthening the Financial Sector (UU P2SK) has set the penalties. Article 305 of UU P2SK stipulates a prison sentence of five to ten years.
In addition to imprisonment, the offenders also face fines ranging from Rp1 billion to a maximum of Rp1 trillion. If the offender is a corporate entity, the business itself is subject to penalties, along with its leadership.
Next question: why does the public still fall for illegal financial activities? In order to understand this, the Financial Services Authority (OJK) conducted a national survey in 2022.
The OJK survey focused not only on law enforcement but also on financial literacy and public education.
OJK data indicates that financial literacy in society has reached approximately 49.6%. However, financial literacy related to digital finance is only around 3.5 out of 5.
From the survey, it was evident that the gap between financial literacy and financial inclusion remains significant. In 2013, the gap between those only financially literate and those financially inclusive reached 37.9%. After nine years, in 2023, the gap remains at 39.4%.
Government Determination
The Indonesian government, through the Ministry of Communication and Information Technology (Kominfo), is determined to continue tackling the rise of sophisticated digital financial crimes, from illegal online lending to online scams causing harm to the public.
“Security issues in the digital financial industry are not just concerns in Indonesia; digital security has become a global issue,” said the Minister of Communication and Information Technology (Menkominfo), Budi Arie Setiadi.
Therefore, Menkominfo highlights the importance of digital financial literacy and inclusion to safeguard society from digital financial crimes. “Security challenges within the digital ecosystem are becoming increasingly complex. Various forms of digital crimes, ranging from online fraud to illegal online lending, are evolving and employing more sophisticated techniques,” Budi explained.
He emphasized that educating the public and raising awareness about the risks and actions of digital fraud would be key to mitigating the negative impacts of digital financial crimes. Menkominfo urges the public to use digital technology wisely, understand its risks, and report suspicious activities that occur in the digital realm.
Budi stressed the importance of cross-ministerial and cross-institutional collaboration in combating advancing digital crimes. One tangible step taken by the Ministry of Communication and Information Technology is the launch of CekRekening.id, a portal allowing the public to report account numbers used for scams.
“Since its launch, the portal has received 486,000 reports from individuals who fell victim to illegal financial scams,” he mentioned.
During the same forum, Friderica Widyasari Dewi, the Executive Head of PEPK OJK, highlighted the serious impact of illegal investments that have harmed society. “Many illegal entities pose as legitimate, deceiving many and causing significant losses. For example, cases of fraud through phone calls or WhatsApp messages pretending to be representatives of reputable banks,” she said, similar to the experience of a bank customer named Tri Sutriawan.
She emphasized that the Financial Alert Task Force (SWI) has collaborated with 12 related ministries and institutions to continuously combat various forms of financial crimes. Despite ongoing efforts, challenges persist, and illegal activities continue to evolve.
In response to this situation, Brigadier General Iwan Kurniawan, the Head of the Investigator Supervisory Bureau (Karowassidik) at the Indonesian National Police Criminal Investigation Department (Bareskrim Polri), explained that many illegal entities seek support from abroad, making the handling of cases more complicated. “Uncovering cases involving transnational elements requires cooperation with relevant countries. Even if laws between two countries may differ, collaborative efforts are made to address transnational crimes,” he explained.
On the other hand, Friderica highlighted that the issuance of Law No. 4 of 2023 on the Development and Strengthening of the Financial Sector has brought hope, introducing stronger penalties for illegal financial activities, including fines of up to Rp1 trillion and prison sentences of 5 to 10 years.
She also stressed that the role of OJK is not only to regulate and oversee the financial services sector but also to protect consumer and public interests. Therefore, financial literacy, market conduct supervision, consumer complaint services, and the handling of illegal investments are crucial components of this protection mission.