Victims of Illegal Online Lenders Need Psychological Therapy

Law enforcement, the blocking of applications and public education are not enough to resolve the problems caused by illegal online lenders. In addition to improving the online lending ecosystem, it is also necessary to pay attention to the mental recovery of the victims of the illegal online lenders.

SA (21), a student at a college in Bekasi city, was still afraid when she was contacted on Tuesday afternoon (19/10/2021). She did not answer any phone calls or messages if she did not know the people calling her. She started doing this after receiving a threat almost every day from online lending app operators. In total, she received 50 phone calls from different numbers per day.

SA became entangled when she defaulted on a loan payment to an online lender in June 2021. She received a fund transfer from an online lending app operator, even though she did not apply for the loan. She used the money which then became a disaster. She was forced to raise a new loan from another online lending app to pay off the debt because she did not have a regular income.

"I didn't know what else to do," said the resident of Teluk Pucung, Bekasi city.

Also read:

> Falling into Loan Sharks’ Traps

> Loan Sharks Hunt Prey in Digital Waters

Dee (42), a resident of Bekasi, and Rea (30), a resident of Palembang, South Sumatra, were also victims of online lending, and are currently undergoing psychological therapy at the Nenggala Alugoro Law Office to restore their mental health after receiving a series of threats from online lending app operators.

According to Dee, she could do nothing but lock herself in her home after an online lender broadcast the information about her inability to pay the debt to 500 contact numbers stored on her mobile phone. She was also worried about her safety because she also received death threats from the online lender. “They said they knew my family, my children. They threatened to kill my children,” said Dee.

KOMPAS/STEFANUS ATO

An online lender debt collector tracks the online loan debtor's house through the Google Maps application, on Thursday (14/10/2021).

She got the mental strength to get up and fight back against the threats of the online lenders after attending psychology counseling initiated by the Nenggala Alugoro Law Office. A number of victims of online lending from a number of regions in Indonesia took part in the counseling.

Rea also attended the counseling. She did not only get mental strength but was also a given a legal document from the Nenggala Alugoro Law Office which explained that she was a victim of online lending. She needed such a document so she could explain her actual debt problem to her superiors at her office, who had received bad information about her from the online lender.

Rea began using online lending services in 2018. By 2020, she had already raised loans from 20 online lending apps. She used the loans to pay her previous debts at other online lending apps. In mid-2020, she failed to make a payment. She then received a series of threats from the online lender. Information about her inability to pay the debt was also sent to the phone numbers of her friends and her superiors at her office.

Also read:

> Digital Banks and Future Direction

> Trapping Homebuyers with Easy Payment Offer

The Nenggala Alugoro Law Office through the Secret Financial Group since 2019 has focused on financial technology issues including victims of online lenders who often misused their personal data. The lending problem had also led to a breakup in the marriages of some victims. The group also prepared a number of educational videos for the victims.

“The group has a total of 100 members consisting of online lending victims from all over Indonesia. Through the group, they share and strengthen each other,” said Alin, an administrative staff member of the Secret Financial Group.

The law office, said Alin, provided various assistance to online lending victims such as diverting the lenders’ billings to the Aluguro State Law Office and helping to resolve the problem resulting from the spreading of the victims’ personal data by contacting their family, friends and co-workers.

According to data from the law office, there is an average of 800 complaints from online lending victims from all over Indonesia per month.

KOMPAS/STEFANUS ATO

The house of one of the online loan debtors in the Rorotan area, North Jakarta, on Thursday (14/10/2021). The debt collectors of online loan companies have to work extra hard to find the addresses of debtors which are often invalid.

Urgent to fix problem

According to the executive of the Indonesian Consumers Foundation (YLKI), Sudaryatmo, the growing number of illegal online lending cases indicates that there is a problem in the online lending business in Indonesia.

Based on the YLKI's records, the government must address several issues, including the transparency of financial services provided by the online lenders, information asymmetry and unfair contract terms.

"So, if I want to borrow money, there should be a simulation. For example, if I borrow Rp 1 million, I should know how much interest I should pay. [In practice] consumers usually only know after they have been billed,” said Sudaryatmo.

The OJK needs to form a crisis center.

Another factor that needs to be addressed by the government is the loan terms and conditions so that they will be fair to the borrowers. Unfair contracts are the source of the problem. Moreover, online lenders can freely access debtors’ personal data.

The Financial Services Authority (OJK) has confirmed that it will reorganize the online loan business ecosystem according to President Joko “Jokowi” Widodo's direction. According to OJK chairman Wimboh Santoso, one form of the new arrangement is that the online loan industry will be on par with conventional financial institutions so that people not only can easily access lending services but also receive a reasonable interest rate, and billing methods that do not violate the law.

Regarding the mental recovery of the victims, the YLKI said the government through the OJK should also pay attention to aspects of restoring the rights of victims. "The OJK needs to form a crisis center," said Sudaryatmo.

This article was translated by Hendarsyah Tarmizi.