Losses to the Public from Illegal Investments Reach Rp126 Trillion, Significantly Increasing in 2022

Losses experienced by the Indonesian public due to illegal investments from 2018 to 2022 have reached Rp126 trillion (approximately US$8.5 billion). This figure was compiled by the Financial Services Authority (OJK).

The breakdown of losses is as follows: Rp1.4 trillion in 2018; Rp4 trillion in 2019; Rp5.9 trillion in 2020; Rp2.54 trillion in 2021; and Rp112.2 trillion in 2022.

Sarjito, Deputy Commissioner for Supervision of the Conduct of Financial Services Business Actors and Consumer Protection at OJK, stated that the actual figure is likely higher, as there are likely many unreported cases or "silent victims."

The proliferation of illegal investments in Indonesia is driven by several factors on the perpetrator's side: the ease of creating applications, websites, and using social media for promotions, as well as the use of overseas servers to deceive investors.

On the victim's side, the main reasons are the lure of high interest rates and a lack of investment knowledge.

Sarjito explained five characteristics of illegal investments:

1. Promising unreasonably high returns in a short period.
2. Offering bonuses for recruiting new members ("member get member" schemes).
3. Utilizing community leaders, religious figures, or public figures to attract investors.
4. Claiming to be risk-free.
5. Lack of clear legality, such as not possessing a business license or institutional permit.

In some cases, perpetrators obtain institutional permits (such as PT, Koperasi, CV, Yayasan, etc.), but lack business licenses. They may also have both institutional and business permits but operate outside the scope of their licenses.

"Therefore, the public must be discerning, as this is not just a matter of literacy. If a peer-to-peer lending (P2P) platform or investment doesn't have OJK approval, just leave it alone," said Sarjito during the National Webinar Series-2 entitled "Consumer Protection against Digital Financial Crime" in Jakarta on Monday, June 12, 2023.