INDONESIA Law and Practice Contributed by: Emir Nurmansyah, Monic N. Devina, D. Meitiara P. Bakrie and Ruth A. Mendrofa, ABNR Counsellors at Law
The definition of fraud provided by the regulation is as follows: “an act of deviation and/or omission that is delib- erately carried out to deceive, cheat, or manipu- late a financial service institution, consumers or other parties, which occurs in the environment of and/or facilities used by the financial services institution so that the financial services institu - tion, consumers, or other parties suffer losses and/or fraud perpetrators and/or other parties secure benefits directly or indirectly.” Furthermore, the OJK is currently preparing a regulation for the implementation of an anti-fraud strategy, which will apply to all financial service sectors, including fintech. However, there is no indication from public sources as to when the regulation will be issued. Predicting the timeline for the issuance of implementing regulations is challenging, given the observed inconsistency in practice. 12.2 Areas of Regulatory Focus In practice, regulators are likely to focus on any sort of fraud that is reported by the public. As the primary regulator of Indonesia’s financial servic - es sector, the OJK, through the EIFA Task Force, is increasingly more active in overseeing and
monitoring this sector. It also receives reports from the public on investments and updates on a regular basis, and will place these on a list of companies (including foreign companies) that allegedly offer “illegal” investments and which do not hold any required local licences and/or are deemed to be potentially fraudulent – this list is available to the public. 12.3 Responsibility for Losses According to OJK Reg, 27 and OJK Reg, 40, fintech service providers such as P2P lending companies and crypto-asset traders shall be responsible for preparation and implementation of the anti-fraud strategy in accordance with the fraud regulations in the financial services sector, such as OJK Reg, 12 and OJK CL 46. Neither OJK Reg, 12 nor OJK Circular Letter 46 specify the limitations on a fintech service provider’s liability for customer losses resulting from fraud. However, Article 22 of OJK Reg, 12 provides that a financial service institution may be held liable for losses to customers or other parties arising from errors and/or negligence of the board of directors, board of commissioners, employees, and/or third parties working for the interests of the financial service institution, pur - suant to the applicable laws and regulations.
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