Strengthening the Protection of Consumers in the Financial Sector Through Law Number

4 of 2023 on the Development and Strengthening of the Financial Sector

Through this opportunity, I will explain two things: (i) The role of Indonesia Financial
Service Authority (OJK) in Consumer and Society Protection under the Law Concerning OJK; and
(ii) The mandate of Law Number 4 of 2023 in Consumer Protection and OJK’s follow-up action.
 The role of Indonesia Financial Service Authority (OJK) in Consumer and Society
Protection under the Law Concerning OJK

First, if we look into the Law Number 21 of 2011 on OJK, there are three main parts of
duty and function of OJK which are regulating, supervising, and protecting. OJK regulates and
supervises the Financial Services Sector such as banks, insurance, etc, and protects the interest of
consumers and/or society. Note that not only the consumer who directly get the benefit from the
service but also society, in general, can file a complaint to OJK.
See articles 28 to 31 which consist of broad scope. Article 28 focuses on preventive action, article
29 focuses on Complaint Services, article 30 focuses on Legal Defense, and Article 31 focuses on
Regulation. The point of preventive actions is OJK is authorized to give information and education
to society. In terms of Complaint Services, it is related to preparing an adequate system and
infrastructure for complaint services so when there is a complaint from society to OJK, the system
and infrastructure are ready, OJK has APPK which stands for Aplikasi Portal Pelindungan
Konsumen (Application of Consumer Protection Portal) and Contact 157 (OJK dial number). Even
though the preventive actions are designed, if in case there is still Financial Sector Business
Actor(PUSK) who disobeys the rule, OJK is entitled to make a legal defense. For instance, OJK is
able to request the bank to do certain things such as finishing a complaint from the consumer, or
even OJK may file a civil lawsuit. All of the preventive action, handling complaints, and legal
defense are designed in a regulatory framework through OJK Regulation (POJK).

Above, the examples of legal products from OJK. There are 5 POJKs from 2018 to 2023 and there
are 10 OJK Circular Letters as a derivative documents from POJK.

The Mandate of Law Number 4 of 2023 in Consumer Protection and OJK’s Follow-up
Action.
There are 341 articles and 27 chapters in Law Number 4 of 2023, and it has a broader scope to
include the Market Conduct which emphasizes supervising the activities of the market and the
implementation of financial inclusion. There are five main frameworks in this Regulation, such
are Strengthening Provisions related to Consumer Protection, Financial Literacy, and Inclusion,
Supervision of PUSK Behavior, Handling Complaints, and Eradication of Investment Fraud.

Those are new provisions that are regulated in Law concerning OJK. First, article 5 which
states “providing protection to consumer and society”. OJK used to focus on financial sector
institutions, but now it shifts to consumers and society. Second, in article 228, there are principles
of consumer protection. Third, articles 285 and 306 both regulated administrative(written warning
to revocation of business license) and criminal (with imprisonment and 20-25 billion rupiahs fine)
sanctions. Fourth, articles 4 and 6, it is stated a new scope of the duty of OJK including carbon
market and cryptocurrency. Fifth, the strengthening of provisions concerning rights and
obligations of consumers and rights, obligations, and prohibition of PUSK are included in articles
235 to 236. Sixth, in article 238, Standard Agreement and its criminal sanctions are emphasized.
Seventh, strengthening of information system security, cyber resilience, and data/information
transfer are stated in articles 239 to 242. Eight, article 244 emphasizes OJK’s authority to give
order/any other certain action to PUSK.
 There are four main duties of OJK, namely: Financial Literacy and Inclusion, Supervision
of PUSK Behavior, Handling Complaints, and Eradication of Investment Fraud. In relation to
Financial Literacy and Inclusion, as stated in article 226, PUSK PUSK must implement activities
in order to improve Financial Literacy and Financial Inclusion for Consumers and the public. Not
only PUSK, but the obligation is also for the Government, Bank Indonesia, and the Financial
Service Authority who shall coordinate to improve Financial Literacy and Financial Inclusion in
order to achieve inclusive economic development as stated in article 225. Under the provision of
article 226, the Government shall establish a national committee that coordinates the improvement
of Financial Literacy and Financial Inclusion.
 In relation to the Supervision of PUSK Behavior (Market Conduct), there are few articles
that regulated it, but the point is the Object of Market Conduct is based on Product Life Cycle.
Firstly, OJK has to (re)design the product and provide the product information. Then, the product
information is delivered and t offered. After that, a product agreement is arranged and product
service is given. Lastly, handling complaints and product dispute resolution.

In relation to Handling Complaints, in article 245 paragraph (1), it is stated that PUSK must
possess and implement a mechanism for the handling of complaints submitted by Consumers.
Paragraph (2) of the same article stated that In the event that there is no agreement on the results
of the handling of complaints conducted by the PUSK as referred to in paragraph (1), Consumers
may (a) submit complaints to the financial sector authorities for the handling of complaints in
accordance with their respective authorities; or (b)file a dispute to a dispute resolution institution
or agency which is approved by the financial sector authorities or to a court. Indonesia has LAPS-
SJK (stands for Lembaga Alternatif Penyelesaian Sengketa Sektor Jasa Keuangan) or Institution
for Alternative Dispute Resolution in Financial Sector.
 In relation to the Eradication of Investment Fraud. OJK with 11 ministers and institutions
formed SWI (Satuan Tugas Waspada Investasi) or Investment Alert Task Force. In Article 247 it
is stated that In order to protect the interests of the public, the Financial Services Authority jointly
with the relevant authorities/ministries/institutions shall establish a task force for the handling of
unlicensed business activities within the financial sector and it shall be in charge of preventing and
handling unlicensed business activities within the financial sector. The follow-up to the
implementation of duties as referred to in paragraph (2) shall be carried out by the relevant
authorities/ministries/institutions in accordance with their respective authorities.

This is actually the mandate from Law Number 4 of 2023 especially to OJK to draft POJK, and
within six months, OJK initially should draft 251 POJKs to regulate specific terms. But with the
omnibus method, it is simplified into 53 POJKs only. In relation to consumer protection, as
mentioned on the slide above there are 10 POJKs concerning that point. Just what had been
highlighted with the same color, POJK numbers 1, 2, 3, 4, 5, 7, and 10 will be combined into 1
POJK using the omnibus method.

POLICY DIRECTION
Financial Literacy Supervision to Handling Complaint Eradication of
and Inclusion PUSK Behavior Investment Fraud
• Online education • Strengthening the • Responsice, • Strengthening
through: supervision of Effective, and preventive action
• Strengthening Market Conduct Solutive consumer • Education
local OJK based on product services. and
Social Media. life cycle • Empowerment of socialization
• Insification of • Law enforcement LAPS-SJK • Task force
LMS usage on Consumer and • Strengthening • Cyber patrol
• Offline Education Society civil lawsuit on • Increasing the
through: Protection consumer effectivity of
• SiMOLEK protection Handling
Edutainment • Regulation complaints
protection based
 • Desaku Cakap on Law Number 4 • Opening
Keuangan of 2023 complaint
• Local channel
Empowerment • Accelerate
through response
strengthening • Strengthening
TPAKD law enforcement
• Inclisive financial • Stop and
ecosystem and block the
strengthening activity
small-medium • Announce
business legal and
• Acceleration child illegal list
saving • Revoke the
• Syariah financial license
literacy and • Sanctions
inclusion enforcement
• Strengthening
regulation to help
small-medium
business to access
financial service
• Accleration on
establishing the
National
Committee