Customer Losses Due To Fraudulent Investments Reached Rp117.5 Trillion: The Culture Of Questioning Needs To Be Grown More, That's The Task Of OJK

Illustration of investing through online. The public must seek as much detailed information as possible so as not to be trapped by fraudulent investments. (Photo: Unsplash)

JAKARTA - Cases of fraudulent investments through binary options platforms such as Binomo are currently viral on TikTok social media. Various parties claiming to be victims emerged and began to demand accountability, especially from affiliates involved in promoting the Binomo platform as a trading platform.

Whereas Binomo and the like are online casino tables. Victims of fraudulent investments Binomo et al also come from various groups regardless of age. Their fate was so sad that some even got involved in criminal acts.

Your money your responsibility. Have you ever heard that sentence? If translated, each individual must be responsible for every property entrusted to him.

Offers of various kinds of investment are increasingly widespread, both through the internet and social media. Not to forget, the invitation by word of mouth. There is an investment invitation that is true, not the least of which is misleading. There are still many fraudulent investments and people are deceived by the lure of big and fast profits. Moreover, in the development of the digital era, there are more and more irresponsible people who offer investment easily through social media platforms.

Bitcoin illustration. (Photo: Vitaly Mazur/Unsplash)

As reported by CNBC Indonesia, the number of illegal investment companies continues to grow every year by taking advantage of public ignorance. The total number of illegal peer to peer lending fintechs that have been handled by the Investment Alert Task Force from 2018 to June 2020 is 2591 entities. The Task Force also stopped 99 business activities suspected of carrying out business activities without permission from the competent authority and potentially harming the community.

On the other hand, more and more people are being deceived by fraudulent investments like this, which can signal three things. Low financial literacy, no awareness to find out before starting, and still trapped in the lure of instant results. Technological developments gave birth to new instruments in investment. The emergence of this instrument is not accompanied by the ability of investors to understand it properly.

The chairman of the Financial Services Authority (OJK) Investment Alert Task Force, Tongam L. Tobing, said the rise of fraudulent investments could be seen from two sides. First, from the supply side of fraudulent investments, due to technological advances, there are more and more easy ways to market this fraud in various forms, both social media, websites, applications. Second, the demand is still there in the community.

"There are still a lot of people who are tempted by high yields and immediately join, so when they are lured, they immediately participate, so it is necessary to increase the literacy of financial products in the community," Tongam explained.

Stupid investment is timeless

Stupid investment is timeless. From ancient times until today, fraudulent investments still haunt our society.

Quoted from the information center of the Financial Services Authority (OJK), a fraudulent investment case occurred in 1968. At that time there was a company that collected funds from 6,000 people with a total value of Rp. 900 million. Under the pretext that the money was used as the construction company's capital, the company's management promised customers 17.5 percent interest per year. Instead of getting it, the money was never given.

In 1992, a similar case also occurred. PT Suti Manajemen, a company that sells furniture and household appliances on credit, promises to pay 44.5 percent interest per year by saving money in the company. The lure managed to attract more than 4,000 customers with a total cash of Rp. 14 billion. But it happened again, the owner ran away stealing all the money.

Illustration of the arrest of a fraudulent investment fraud. (Photo: Antara)

Thirty years later, in the midst of the disruption and digitization of various aspects of life, it seems that fraudulent investments still maintain their existence. They just change shape. From what used to be a fraudulent conventional investment offer, now it has transformed itself in technology, supporting various investment instruments that sound up-to-date to the public. These are like binary options trading, illegal trading robots, and ponzi schemes under the guise of buying and selling crypto assets.

One of the binary options entities that has stolen the public's attention in recent years is Binomo. This is none other than because this offer ad uses sentences that clearly don't make sense and are very often milled about in interlude ads on various social media. Binomo has been designated as an illegal investment by the Investment Alert Task Force since 2019. They do not have a business license in Indonesia.

Losses Up to IDR 117 trillion

The Investment Alert Task Force recorded that the total customer losses due to fraudulent investments so far until mid-February 2022 reached IDR 117.5 trillion. Losses come from various modes of fraud, ranging from illegal online loans, fraudulent buying and selling of illegal crypto assets, fraudulent foreign currency trading, illegal multilevel marketing, to illegal pawning.

Based on data from the Investment Alert Task Force (Satgas), the highest fraudulent investment losses in the last 10 years occurred in 2012 amounting to IDR 7.92 trillion and 2020 amounting to IDR 5.9 trillion. For this year until February 17, customer losses were recorded at Rp149 billion.

The bogus investment entities that have been closed are also increasingly diverse, including illegal online loans that have been circulating and have been blocked since 2018 until now. Fraud modes have also developed, such as binary options investment, fraudulent multilevel marketing (MLM) or Ponzi illegal trading robots, and trading of crypto assets with Ponzi schemes.

"So, this fraud mode continues to develop by utilizing technological developments that have not been accompanied by public understanding and literacy of legal financial service products, as well as the intricacies of the benefits and risks," said Tongam L Tobing, Chairman of the Investment Alert Task Force at a press conference, Monday (21 /2/2022), in Jakarta.

Find Information Before Investing

Based on the national financial literacy survey conducted by OJK in 2019, the financial literacy index reached 38.03 percent and the financial inclusion index 76.19 percent.

This index indicates that the level of understanding, skills, and public trust in using financial products and services is still minimal, but they do use financial service products. In short, we do not fully understand the characteristics of our financial products.

Asking can be one of the most effective methods before starting an investment. Asking those who are experts in investment, of course, can also ask colleagues, or ask bank officials who have analyzed similar products.

Financial Services Authority (OJK) building. (Photo: Doc. OJK)

Ask about the benefits and risks of investment products. Usually we are only interested in the benefits of financial service products. We don't know about hidden costs or penalty fees if we stop investing before the end of the contract period.

Actually, the public has access to get answers to all questions related to investment product features. This is because every financial services industry has built information services for its customers. Financial industry players can also convey information about the company's products and activities to customers. OJK actively provides information services that can be used by the public to find out about financial investment products and seek information on the legality of investment companies.

OJK also has an Investment Alert List containing entities suspected of offering misleading investments. The public can ask questions directly to the OJK office or indirectly via telephone line 157, whatsapp service 081 157 157 157, social media Instagram @ Kontak157 and Facebook Contact OJK 15 and email [email protected],

So, an investment information service has been developed. Now, the culture of asking needs to be cultivated so as not to get lost in fraudulent investments.