OJK Boosts Efforts to Combat Fraudulent Investments Amidst Record Losses

MAKASSAR, RAKYAT NEWS— The Indonesian Financial Services Authority (OJK) has urged the public to exercise caution and remain vigilant against illegal investment schemes that pose substantial financial risks.

Losses from illegal investments in Indonesia have surged to IDR 139.67 trillion from 2017 to 2023.

In 2023 alone, the OJK reported a staggering IDR 603.9 billion in losses from fraudulent investment schemes.

In response to tackle the problem, OJK held an outreach and educational event titled “Financial Literacy: Smart Investment Strategies and Avoiding Illegal Schemes” in Makassar on August 8, 2024.

“Investing is not a game or gamble but requires a solid understanding of financial principles and strategies. Avoid being lured by unrealistic promises of high returns on social media,” warned Irhamsyah, Executive Analyst at OJK, during the event

He highlighted the critical need for vigilance against illegal online lending (pinjol) operations, noting that 8,271 such entities have been blocked, with only 98 having official licenses.

In addition to illegal online lending, OJK has identified 1,367 cases of fraudulent investments and 251 cases of illegal pawnshops from 2017 to July 2024.

To combat these illicit activities, OJK has executed 2,577 blocks up in July 2024, targeting applications, bank accounts, and related contacts.

Jeffrey Hendrik, Director of Development at the Indonesia Stock Exchange (IDX), reported that Indonesia now has 13.2 million investors with a total investment value of IDR 12,300 trillion. Daily transaction values on the exchange reach IDR 12 trillion. The IDX remains committed to protecting investors through enhanced financial literacy efforts.

OJK is also preparing 20 new regulations under the Financial Sector Development and Strengthening Law (UU P2SK) for 2024. A draft Government Regulation (RPP) on Demutualization of the Stock Exchange, being developed by the Ministry of Finance, is expected to be issued this year, aiming to strengthen the financial regulatory framework in Indonesia.

This situation underscores the growing need for stricter education and oversight in the investment sector to protect the public from harmful illegal schemes.

To prevent falling victim to illegal investments, the public must recognize the common characteristics and tactics of these schemes. Red flags include dubious legality, promises of high returns in a short period, claims of risk-free investments, and recruitment models like “member-get-member.” These schemes often leverage the influence of public figures, community leaders, or religious authorities.

Illegal investment schemes frequently employ Ponzi structures, forge business licenses in OJK’s name, and duplicate registered company names.

Anthonius Hari Prasetyo Moerdianyo, Head of the Capital Market Regulation and Development Department of OJK, reported a steady rise in stock market investors, with millennials and Gen Z (those under 30) making up 55 percent of the total. This growth is driven by rapid advances in technology, with younger generations using user-friendly tech and social media to seek and share investment information.

He cautioned that easy access to information has also led to a proliferation of misinformation and hoaxes in the investment space. He emphasized the need for careful evaluation of investment offers.

“OJK is actively enhancing its outreach and educational efforts to boost financial literacy and inclusion, aiming to protect the public from illegal investments,” Anthonius said

OJK has recorded 9,889 cases of illegal activities from 2017 to July 2024, including 1,367 illegal investment schemes, 8,271 illegal online lending operations, and 251 illegal pawnshops.

To address the growing trend of illegal investments, OJK plans to intensify its monitoring efforts and collaborate more closely with law enforcement agencies to combat fraudulent activities. The authority also stresses the importance of community vigilance, urging individuals to report suspicious investment offers to OJK for verification.

OJK’s ongoing focus on education aims to equip younger generations with the tools to distinguish between legitimate and fraudulent investment opportunities. By increasing financial awareness and understanding, OJK hopes to reduce the number of victims of these schemes. (Uki Ruknuddin)