Is It Possible That We Don't Have To Pay Illegal Debts Like Mahfud Said? Hopefully It's Not Just Lip Service

JAKARTA - Coordinating Minister for Political, Legal and Security Affairs (Menkopolhukam) Mahfud MD said that people who owe debts to illegal loans do not have to pay their debts. Fresh air, of course. But is it possible? Don't let this just be lip service.

Mahfud said that the organizers of the illegal loans were threatened with punishment for acts of extortion, unpleasant acts, the ITE Law, and consumer protection. "To those who have already become victims, don't pay."

"If you don't pay, then someone doesn't accept it, is terrorized, reports it to the nearest police station. The police will provide protection," Mahfud said at a press conference at the Coordinating Ministry for Political, Legal and Security Affairs Office, Jakarta, Tuesday, October 19.

"We mentioned the possibility of using Article 368 of the Criminal Code, namely extortion. Then there is Article 335 of the Criminal Code on Unpleasant Acts that can be used. Then, the Consumer Protection Law, Article 29 of the ITE Law and Article 32 paragraphs 2 and 3."

Mahfud added that his suggestion only applies to illegal borrowing. The criminal and civil law action he is referring to does not apply to peer to peer lending financial technology (fintech) companies that already have a license from the Financial Services Authority (OJK).

"With this, we emphasize that we will only take firm action against illegal loans. Other legal, licensed and legal loans will develop. Because that's what we hope for."

Agreed by OJK

Coordinating Minister for Political, Legal and Security Affairs Mahfud MD (Source: Kemenkopolhukam Documentation)

Mahfud's statement was agreed by OJK. The head of the OJK Investment Alert Task Force, Tongam L. Tobing, explained that from a civil law review, loan debt did not meet the legal requirements of an agreement.

"They are illegal. Therefore, in a civil manner, it does not meet the conditions for the validity of the agreement. They also commit the crime of extortion,” said Tongam in the Main News program on Kompas TV, Wednesday, October 20.

The government hopes that illegal lending will be reduced by Mahfud and Tongam's call about the unpaid debts of the victims of illegal lending. After all, the public will not pay, that is the government's assumption.

"We hope that calls like this (not paying off illegal borrowing) will have an impact on reducing illegal borrowing, because the assumption is that people will not pay," Tongam.

Head of the OJK Investment Alert Task Force Tongam L. Tobing (Source: Antara)

In addition to expectations and assumptions, there are several other measures called Tongam. The government, he said, continues to strive to eradicate illegal lending by educating the public and blocking digital access to illegal lending.

Answering doubts about the authority of the illegal borrowing server, Tongam claims the blocking is still effective. The public's doubts about the blocking were based on the fact that 34 percent of the illegal borrowing servers were abroad and the whereabouts of the other 44 percent were unknown.

Tongam, further encourages people to take advantage of legal loans to borrow. According to OJK data, there are currently 106 legal loans that are licensed and registered with the OJK.

Maybe, but...

In principle, what Mahfud and Tongam said could be true. Economist of the Institute of Development of Economics and Finance (INDEF), Nailul Huda agrees with the legal logic that illegal lending has no legal force.

The problem is, the situation on the ground will not be that easy for the community. The government cannot close its eyes that this loan problem is not just borrowing money. There is a problem of controlling people's personal data which is vulnerable to misuse by illegal loan companies.

And if the concept of legal protection is only based on reports, it's not enough. The government must form a policy with a legal umbrella that can provide full protection to the community. Without it, Mahfud and Tongam's statement is just lip service.

"But it doesn't stop there. The company has complete personal data. We can even access photo galleries. So data security is threatened and lives are also going to happen. Unless Pak Mahfud issues a policy product that can protect the borrower, "said Huda to VOI, Thursday, October 21.

"For example, if there is physical terror by an illegal debt collector, then (the public) hides behind Mr. Mahfud's statement, can this statement protect the borrowed victims? It doesn't. That's why we have to look more carefully at the issue of paying for this illegal loan."

In addition, if you look at the loan business model, there are other impacts that may arise if the loan debt is really not paid at all. This could be a precedent that influences the community's paradigm of pinjol.

Basically the P2P lending business pattern is to bring together lending (owners of funds) with borrowers (debtors) through technological means. Between the two is a platform or application manager.

Imagine the fate of legal borrowing in the future if this mindset grows widely and takes root in the public's head? Didn't Mahfud and Tongam say they want legal loans to develop in the future?

"Legal borrowers will be affected. And the reason why you don't have to pay at this time is a precedent for naughty borrowers in the future. So OJK really has to be careful in responding to Pak Mahfud's statement," Huda.

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