Legal basis, key to data protection to crush unions of illegal lenders


“Need money fast?” Want a simple process? Want a low interest rate? “

This is how online loan companies often present themselves, offering hope to economically struggling families, especially amid the COVID-19 pandemic, which has hit many industries and forced employees to research alternatives to maintain their lives despite a drop in income.

Unfortunately, as Vaksincom’s cybersecurity expert Alfons Tanujaya points out, these schemes are a bait for victims to easily provide their personal data when applying for a loan, presenting a valuable asset to loan unions in illegal line to blackmail them if they are unable to repay the loan.

According to Tanujaya, most illegal online loan syndicates use two methods to pool personal data and engage with potential targets. The first method of message blast is to buy dozens of new SIM cards which are used to send SMS offering loans to thousands of target numbers; the second method involves exchanging personal data between union telemarketing teams, allowing them to access more users and offer new loans.

Easy access to phone numbers allows unions to persistently send text messages offering easy loans, and people in financial difficulty could be lured into texting and applying for a loan, he says.

However, once the borrowers have received the money, they have to put up with an astronomically high interest rate and intimidating messages asking for payment that escalate when the borrower shows even a slight indication of not being able to pay. repay the loan and the interest, he adds.

Root Causes of Illegal Online Loans Problem

Jakarta Legal Aid Institute (LBH) Director Arif Maulana says lax legal regulations protecting loan borrowers from abuse by online loan unions have been exploited by growing online loan unions. offer competitive loan deals to victims.

Maulana points out that the “easy” loan procedure without payment capacity assessment and the lack of protection of personal data further complicate the problem of illegal online loans, putting hundreds of borrowers in difficulty.

Articles 26 and 32 of the Information and Electronic Transactions Act (UU ITE) already provide a legal basis for victims of illegal online loan syndicates who see their personal data abused, explains the head of LBH.

Article 26 states that the use of personal data information must be done with the consent of the data subject and it allows data subjects to take legal action against those who abuse their data, while article 32 prohibits the dissemination of personal data or electronic information without authorization, he adds. .

Since 2018, the legal aid institute has started providing legal assistance, consultation and advocacy to victims of illegal online loan unions, a growing trend, he says. The institute has noticed that the application of the law against personal data breaches is often lax despite the existing legal basis, he adds.

Financial Services Authority (OJK) Regulation No.77 / POJK.01 / 2016 on Information Technology Based Financial Lending Service has been weak in the regulation of online lending system, points out- he does. The OJK regulation delegates many tasks to online lending services, while the OJK monitoring procedures regulation for online lending service is weak, he says.

“The legal basis provided by UU ITE must be used to enforce the law against abuse and leakage of personal data, including against illegal online loan syndicates,” says Maulana.

Parliament must swiftly pass the Personal Data Protection Bill, which the public urgently needs to provide a legal basis for protecting personal data from potential abuse by criminal syndicates, including by loan companies online illegal, he points out.

The lack of legal protection against the abuse of personal data, in addition to being economically disadvantageous, violates citizens’ rights to personal protection, he adds.

Low public awareness exploited by unions

Along with legal loopholes and lax enforcement, low public awareness of personal data protection is also exploited by online loan syndicates who are moving fast to trap more people.

A lecturer from the Department of Electrical Engineering and Information Technology at Gadjah Mada University, Lukito Edi Nugroho, urged the public not to post their personal data on social media in order to avoid potential abuse by criminals, especially illegal online loan syndicates.

When borrowing money becomes a necessity to meet the needs of the family, Nugroho suggests reviewing the history and legal status of the online loan company with OJK before proceeding to review the terms and conditions of the loan. to ensure that the agreement is legal and in accordance with the law. The public should also be aware of the data access requested by the online lender app on a home phone and beware if the app requests excessive access on the phone, he adds.

In agreement with Nugroho, Tanujaya also suggests several measures to protect personal data.

Phone number identification apps like Truecaller can identify unknown and unregistered phone numbers that try to call or text the phone, he says. The app also allows users to block unwanted phone numbers, including incoming calls offering loans, and mark a phone number as spam to warn other users.

Enabling Two-Factor Password Single Sign-On (OTP-TFA) also provides a second layer of protection when accessing social media, as OPT-TFA system authorization is required whenever the connection is made from a new device and, therefore, it prevents unauthorized access to social media accounts, he explains.

In conclusion, authorities must take swift action against illegal online loan syndicates that take advantage of unsuspecting victims, he said. Law enforcement, public awareness and public vigilance to protect personal data are necessary to address this problem, he adds.

The government should also review regulations regarding online lending systems to protect borrowers from abuse and educate the public about the risk of borrowing money from illegal online lenders, he says.

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