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OJK Improves Consumer Protection

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In an attempt to improve consumer protection and prevent misunderstanding, Indonesia’s Financial Services Authority (OJK) is prohibiting Financial Services Businesses (PUJK) in the capital market sector from marketing, promoting, or advertising financial products and services other than those that have been granted permission by the OJK, including securities issued abroad (offshore products) according to a recent press release from OJK.

The prohibition was issued by the OJK after watching the development of marketing, promotions, and advertising related to products and services using an integrated application platform (Super Apps) used in one business group.

OJK found many Super Apps that contain investment product offerings in the form of securities (stocks and bonds) issued by entities abroad (offshore products) which are outside the authority of OJK supervision.

Hoesen, the Chief Executive of OJK Capital Market Supervision emphasized the marketing of foreign securities in Indonesia is not allowed and as such poses a considerable risk to the public.

“Investment products offered to the public and supervised by OJK include securities issued by legal entities in Indonesia that have been declared effective. Meanwhile, other investment products such as securities issued by overseas entities, such as crypto assets, and gold are not licensed and supervised by the OJK,” said Hoesen.

OJK has carried out guidance and taken firm steps, especially for FSBs who violate the provisions in the practice of marketing, promotion or advertising of their products and services by requesting to:

  • Immediately stop services and/or product offerings outside the OJK’s permission and supervision through an integrated application (One Roof/ Super Apps) that includes the OJK logo or a statement that the product and the FSA are licensed and supervised by the OJK.
  • Separating the use of applications, platforms and websites for products and services that are not under the supervision of the OJK from those that are licensed and under the supervision of the OJK.

 

OJK Strengthens Consumer Protection

Previously, OJK issued OJK Regulation Number 6/POJK.07/2022 concerning Consumer and Community Protection in the Financial Services Sector (POJK Consumer Protection) which contained provisions regarding norms and procedures for FSBs in marketing, promotion, and advertising related products and services to the public. This provision is regulated in Article 16 of the POJK on Consumer Protection which confirms that FSBs are required to:

 

  • provide information about products and/ or services that are clear, accurate, correct, easily accessible, and do not have the potential to mislead consumers;

 

  • use simple terms, phrases, and/ or sentences in Indonesian and easily understood by consumers in every document regarding products and/ or service information;

 

  • use letters, writings, symbols, diagrams, and signs that can be read clearly;

 

  • provide explanations on terms, phrases, sentences and/ or symbols, diagrams and signs that are not yet understood by Consumers; and

 

  • use the Indonesian language and must be paired with foreign languages ​​in documents regarding products and/ or services, in the event that the products and/ or services will be used by potential Consumers and/ or Consumers of foreign countries.

 

Furthermore, so that the provisions and implementation regarding the provision of information on financial products and or services through the media (advertising) by the PUJK is in line with the advertising objectives, OJK has also conducted several outreach activities to the PUJK and cooperated with the Association of Indonesian Advertising Companies.

On July 7, 2022, OJK also held a meeting with all Financial Services Industry Leaders regarding strengthening the implementation of market conduct in order to improve consumer protection in the financial services sector.

Source: Otoritas Jasa Keuangan (OJK) – Press Releases

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